Demystifying The Land Acquisition Ordinance: Social Impact

Demystifying the Land Acquisition Ordinance

 Part One: Social Impact

Modi is right to hang tough on the Land Ordinance despite the Opposition hullabaloo.  The greatest injustice done to land owners since the year dot was the compulsory acquisition for a pittance.  It was always a paltry sum, with no reference to the land’s productive or market value, determined unilaterally by the Government. This, happily is no longer the case, even though farming nowadays is far from lucrative.

The Modi Government’s Land Acquisition Ordinance in force has made the enhanced compensation formula, enacted in the 2013 law, applicable across the board to ALL land acquisition by the Government, without exception. This, by implication, also establishes the valuation, in any given area, for the private sector too.

The compensation rates applicable under the Ordinance are twice the going rate for urban agricultural land, and four times that obtaining in rural areas. The intention is to render the pay-out roughly the same in both cases.

The grey area is how this is going to be calculated. Not much has actually been transacted since 2013 when the Land Act was first passed by the UPA Government. India Inc. thinks the high compensation is unworkable, no matter how it is reckoned, and has been making do with earlier land banks while waiting for clarity on how it works in practice.

Some say the price will be a multiple of the last highest registered amount for a land transaction in the area; others say it is multiples of the declared circle rates.  The idea is to approximate market rates as far as possible.

But will the money be paid out at one go? Will it be paid partly by cheque or draft and partly in kind, say by the allocation of an urban ‘developed’ plot? What if several people own the same bit of land? We don’t know all this, as yet. In urban Gurgaon, Haryana, there is talk of a 350 sq.yd. plot for each acre acquired, plus the cheque amount. In any event, that this compensation formula is very much fairer than the old arbitrary method is undeniable.

The 2013 law sounded good, but was a hollow thing, except for that enhanced compensation clause. This has been retained unchanged by Modi’s Ordinance. The Rahul Gandhi/UPA sponsored law however had exemptions as long as your arm!

The farmers had to quietly hand over their fields and accept  that old-style whatever compensation, and  in any sequence of dribbles and drabbles,  if  it was land  the Government said it needed for any or all of the following: coal mining, highways, other kind of mines, atomic energy, tramways, railways, ancient monuments and archeological remains, petroleum pipelines, dams/ resultant lakes, electricity, metro railways; or it just took the Government’s fancy under the Requisition or Acquisition of Immovable Property Act, implying buildings thereon.

One might not be blamed for asking what was left out for the compensating? Perhaps the original idea was to have ONLY the private sector pay out the higher compensation to the beloved farmer!  

For: The Quint

(498 words)

February 25, 2015

Gautam Mukherjee

Gautam Mukherjee is a plugged-in commentator and instant analyser.