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The way forward

india Updated: Jun 16, 2011 21:58 IST
Ram Singh
Ram Singh
None
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Harsh Mander, in his article Let’s have a fair deal (June 15) discusses some recommendations of the draft bills on land acquisition and resettlement & rehabilitation as effective safeguards for farmers, landless workers and forest-dwellers.

Three of the recommendations are noteworthy. One, if the entity benefiting from acquisition resells the land, the owners should get a share in the profit. Two, the compensation should be increased to six times the registered value of the land. Three, 100% compulsory acquisition of land should be allowed only for defence, infrastructure and ‘social-service’ projects. Moreover, states should regulate the direct purchases of land by companies.

The proposed measures betray the ignorance of the ministry of rural development and the national advisory council (NAC) about the fundamental causes behind the protests against land acquisition, the inadequacy of compensation and the resulting litigation.

For instance, registered values don’t exist for a large portion of agricultural and forest lands. Ownership and land records are incorrect, outdated or simply absent. Under such conditions, affected people can’t be ensured adequate compensation by simply choosing a high multiplier for the non-existing registered-value.

In contrast, there is market value in the parcels located near urban areas. While the acquired property may not have a registered price here, it’s possible to find other properties with registered rates and claim them to be ‘similar’. The question is: which available rate should serve as the basis for determining compensation?

The initial compensation is awarded by the land acquisition collector (LAC) on the basis of the ‘floor-rate’, which is perpetually outdated and below the market value. In contrast, courts generally use relatively high-valued sale deeds as the basis. So court awards are substantially higher, a claim which Mander corroborates. For example, in 96% of the judgements delivered by the Punjab and Haryana high court in 2009-10, the average judicial awards were 342% higher than the LAC awards. Understandably, affected people have a strong incentive to go in for litigation.

But litigation is a socially inefficient and regressive way of granting compensation, as under the existing law the onus of proving the market value is on the owner, notwithstanding the fact that the government possesses the relevant information. Therefore, a dedicated state-level body, with representation from all stakeholders, should decide on compensation. It should also be responsible for determining and updating floor-rates and compensating even the landless.

The abuse of the eminent domain power can’t be stopped by restricting compulsory acquisition to certain categories of projects. On the contrary, diluting the distinction between public and private objectives could further facilitate the misuse of the law. The apparent objective of public-private partnerships is to tap private funds for infrastructure, education, healthcare services, etc. As its share, the government acquires land, which is way more than it really needs. The project company uses excess land to serve its private interests. With an increasing reliance on private funding of public goods, such practices will increase and become subtler. Unfortunately, the proposed measures can’t stop them.

The amended law should allow compulsory acquisition for companies only if the activity yields direct benefit to the general public, like roads, airports and ports. Even then, companies should get only the usage rights and not the land’s ownership. Also, the project should not have real-estate or other commercial components. For social projects, which require small land and are flexible in terms of location, like schools and hospitals, companies must buy land directly from the owners.

When a company is using acquired land, the department concerned must publish project details beforehand, like the purpose and duration of the project, the area to be acquired, how the public will benefit from the project, who will own the acquired land and who will bear the cost of acquisition. To give bite to these provisions, the proposed legislation should provide for an independent ‘land acquisition and compensation regulatory authority’. Approval from this authority should be a prerequisite, whenever a company uses the acquired land.

Ram Singh teaches at Delhi School of Economics, University of Delhi. The views expressed by the author are personal.