In growth report, Niti red-flags land acquisition rules

The land acquisition law was put in place in 2013 by the United Progressive Alliance government following protests from farmer groups and the then opposition parties led by Bharatiya Janata Party (BJP). It has, however, continued to be a sensitive issue with interests of farmers clashing with those of industries.

The current land acquisition law has made building roads costlier and more time-consuming, the Union government’s think tank Niti Aayog has said in a document that discusses measures to ‘re-accelerate’ economic growth.

The current land acquisition law has made building roads costlier and more time-consuming, the Union government’s think tank Niti Aayog has said. (Yogendra Kumar/HT PHOTO)

The land acquisition law was put in place in 2013 by the United Progressive Alliance government following protests from farmer groups and the then opposition parties led by Bharatiya Janata Party (BJP). It has, however, continued to be a sensitive issue with interests of farmers clashing with those of industries.

The share of cost of acquiring land has gone from 23% of the total cost for a road development project to 40%, and the new process on average takes 4.5 years to complete, the Aayog said in the document. Next year, the cost of acquisition is estimated to reach ₹3.3 crore per hectare, the report added.

The stand was criticised by Congress leader Jairam Ramesh, who was the rural development minister when the law came into force.

“Is Niti Aayog objecting to higher compensation for farmers whose lands are taken away in the name of so-called development? If it is, it deserves to be wound up,” he said.

“This was one provision (compensation) of the law which Arun Jaitley, Sushma Swaraj and Rajnath Singh wholeheartedly backed. In fact, they wanted even higher compensation,” Ramesh added.

The 2013 law defines compensation as “in addition to the market value of the land provided under section 26, the Collector shall, in every case, award an amount calculated at the rate of 12% per annum on such market value for the period commencing on and from the date of the publication of the notification of the Social Impact Assessment study under sub-section (2) of section 4, in respect of such land, till the date of the award of the Collector or the date of taking possession of the land, whichever is earlier.”

The UPA government’s land law, which came into force from January 1, 2014, said consent of 80% of land owners are needed for private projects and 70% are needed to sign off on the acquisition for projects in the Public-Private Partnership model. It also said no consent is required for government projects.

The Modi government in 2015 removed the consent clause for five types of projects: defence, rural infrastructure, affordable housing, industrial corridors, and infrastructure including social infrastructure. But it widened the scope of compensation.

An institutional equities research paper of the Kotak Bank, published on September 12, has pegged cost of land acquisition for roads at ₹3 crore per hectare. But it also said: “We note stagnating cost of land acquisition for NHAI (per hectare) over the past two years. The (approx) 3X increase in such cost was anticipated based on change in formula and thus the current ~30 mn/hectare rates may not go up meaningfully. The quantum of land acquisition has also been moderating and may come down further.”