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ECONOMICS ASSIGNMENT

TOPIC:- LAND ACQUISITION BILL

SUBMITTED BY :- SUBMITTED TO :-

NAME :- AVINASH KUMAR MISHRA(10) Dr. SAFIA MEHNDI

:- FAIZ ALAM (13)

:- VAIBHAV BALIYAN (35)

COURSE : - B.A.LL.B (HONS)(1ST YEAR)

SEMESTER :- 2nd

SECTION :- A
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ACKNOWLEDGEMENT

I am using this opportunity to express my gratitude to everyone

who supported me throughout the course of this ECONOMICS
ASSIGNMENT . I am thankful for their aspiring guidance, invaluably
constructive criticism and friendy advice during the project work. I am
sincerely grateful to them for sharing their truthful and illuminating views on
a number of issues related to the project.

I express my warm thanks to my economics mam Dr. safia for his

exemplary guidance.
I also take this opportunity to thank the staff of JAMIA MILIA ISLAMIA
who supported me very much in making of this project specially the
LIBRARY members who guided me in searching and providing the right
book.

Lastly I want to thank my friends and family who are with me and
supported me whenever I needed to complete this project,and without
whose help this assignment might not be so fruitful .

Thank you,
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CONTENTS :-

 ECONOMICS
 LAND ACQUISITION BILL:--AN INTRODUCTION

 DIFFERENT ISSUES REGARDING NEW LAND

ACQUISITION BILL

 AMENDMENTS MADE
 PROS AND CONS OF NEW LAND ACQUISITION
BILL

 CONCEQUENCES
 ALTERNATIVES
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Economics

Economics is the social science studying the production,

distribution and consumption of goods and services. Economics is the study of
how we work together to transform scarce resources into goods and services to
satisfy the most pressing of our infinite wants and how we distribute these goods
and services among ourselves. The term ‘ECONOMICS’ owes its origin to
Greek word ‘OIKONOMIA’ meaning ‘HOUSEHOLD’.
ECONOMICS is ……
 Science of wealth.
 Science of material well-being.
 Science of choice making.
 Science of dynamic growth and development.

LAND ACQUISITION BILL

INTRODUCTION :-
Land Acquisition in India refers to the process of land acquisition by
the central or state government of India for various infrastructure and
economic growth initiatives. Several controversies have arisen with
claims that land owners have not been adequately compensated.

Land acquisition in India is governed by The Right to Fair

Compensation and Transparency in Land Acquisition, Rehabilitation
and Resettlement Act, 2013, which came into force from 1 January
2014. Till 2013, land acquisition in India was governed by Land
Acquisition Act of 1894. On 31 December 2014, the new government in
India passed an ordinance with an official mandate to "meet the twin
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objectives of farmer welfare; along with expeditiously meeting the

strategic and developmental needs of the country".
The Land Acquisition Act of 1894 allowed the government to acquire
private lands. It is the only legislation pertaining to land acquisition
which, though amended several times, has failed to serve its purpose.
Under the 1894 Act, displaced people were only liable for monetary
compensation linked with market value of the land in question, which
was still quite minimal considering circle rates are often misleading .

DIFFERENT ISSUES REGARDING NEW LAND ACQUISITION BILL

India’s new land acquisition Bill, praised in some quarters and reviled in others, is
a complex piece of legislation. It was passed by the Lok Sabha and will likely be
passed by the Rajya Sabha shortly as well. The government has issued a document
explaining the tenets of the Bill that offers a comprehensive explanation of a law
that will change how land is acquired and owners are compensated in India.

Why is there a need for a new Bill?

There is unanimity of opinion across the social and political spectrum that the
current Law (The Land Acquisition Act 1894) suffers from various shortcomings.
Some of these include:
• Forced acquisitions: Under the 1894 legislation once the acquiring authority has
formed the intention to acquire a particular plot of land, it can carry out the
acquisition regardless of how the person whose land is sought to be acquired is
affected.
• No safeguards: There is no real appeal mechanism to stop the process of the
acquisition. A hearing (under section 5A) is prescribed but this is not a discussion
or negotiation. The views expressed are not required to be taken on board by the
officer conducting the hearing.
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• Silent on resettlement and rehabilitation of those displaced: There are

absolutely no provisions in the 1894 law relating to the resettlement and
rehabilitation of those displaced by the acquisition.
• Urgency clause: This is the most criticised section of the Law. The
clause never truly defines what constitutes an urgent need and leaves it
to the discretion of the acquiring authority. As a result almost all
acquisitions under the Act invoke the urgency clause. This results in the
complete dispossession of the land without even the token satisfaction of
the processes listed under the Act.
• Low rates of compensation: The rates paid for the land acquired are the
prevailing circle rates in the area which are notorious for being outdated
and hence not even remotely indicative of the actual rates prevailing in
the area.
• Litigation: Even where acquisition has been carried out the same has
been challenged in litigations on the grounds mentioned above. This
results in the stalling of legitimate infrastructure projects.

Why does the government need to acquire land for private

companies as well as public-private partnership projects?

• Land Records in most parts of the country are fragmented and

disorganised. In most cases they haven’t been updated for decades. The
new law overcomes that by ensuring the Collector updates the land
records and also pays up to four times the value to correct any
inaccuracies.
• If land is purchased then there are no benefits for livelihood losers who
are usually far greater in number than the land owners. This Bill ensures
that they are taken care of and not simply displaced.
• The inequality in terms of bargaining power between large-scale
corporations and small farmers and other marginalised groups increases
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the likelihood of unfair agreements. Contracts tend to be signed in

favour of the party negotiating from a greater position of strength. That
is why government is required to bridge the gap and bring balance to this
relationship.
• A legitimate need for acquisition by the state itself (to build public
goods such as roads, schools and hospitals) can be undermined and
stalled by groups with vested interests. If there is no sovereign power to
compel these groups, a single individual or group of individuals can hold
a process hostage merely by refusing to part with land. Further, in times
of crisis such as war, famine and floods, coupled with absence of
legislation clarifying and guiding the state’s exercise of ‘eminent
domain’, situations can emerge jeopardising human lives.
What are the highlights of the new Bill?
• Compensation: Given the inaccurate nature of circle rates, the Bill
proposes the payment of compensations that are up to four times the
market value in rural areas and twice the market value in urban areas.
• R&R: This is the very first law that links land acquisition and the
accompanying obligations for resettlement and rehabilitation. Over five
chapters and two entire Schedules have been dedicated to outlining
elaborate processes (and entitlements) for resettlement and
rehabilitation. The Second Schedule in particular outlines the benefits
(such as land for land, housing, employment and annuities) that shall
accrue in addition to the one-time cash payments.
• Retrospective operation: To address historical injustice the Bill applies
retrospectively to cases where no land acquisition award has been made.
Also in cases where the land was acquired five years ago but no
compensation has been paid or no possession has taken place then the
land acquisition process will be started afresh in accordance with the
provisions of this act.
• Multiple checks and balances: A ‘comprehensive, participative and
meaningful’ process (involving the participation of local Panchayati Raj
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institutions) has been put in place prior to the start of any acquisition
proceeding. Monitoring committees at the national and state levels to
ensure that R&R obligations are met have also been established.
• Special safeguards for tribal communities and other disadvantaged
groups: No law can be acquired in scheduled areas without the consent
of the Gram Sabhas. The law also ensures that all rights guaranteed
under such legislation as the Panchayat (Extension to Scheduled Areas)
Act 1996 and the Forest Rights Act 2006 are taken care of. It has special
enhanced benefits (outlined in a dedicated chapter) for those belonging
to Scheduled Castes and Scheduled Tribes.
• Safeguards against displacement: The law provides that no one shall be
dispossessed until and unless all payments are made and alternative sites
for the resettlement and rehabilitation have been prepared. The Third
Schedule even lists the infrastructural amenities that have to be provided
to those that have been displaced.
• Compensation for livelihood losers: In addition to those losing land,
the Bill provides compensation to those who are dependent on the land
being acquired for their livelihood.
• Consent: Removal of ‘consent’ clause: As per the previous law, land
could be acquired only with approval of 70% of land owners for PPP
(Public Private Partnership) projects and 80% for private entities
• Caps on acquisition of multi-crop and agricultural land: To safeguard
food security and to prevent arbitrary acquisition, the Bill directs states
to impose limits on the area under agricultural cultivation that can be
acquired.
• Return of unutilized land: In case land remains unutilized after
acquisition, the new Bill empowers states to return the land either to the
owner or to the State Land Bank.
• Exemption from income tax and stamp duty: No income tax shall be
levied and no stamp duty shall be charged on any amount that accrues to
an individual as a result of the provisions of the new law.
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• Share in appreciated land value: Where the acquired land is sold to a

third party for a higher price, 40% of the appreciated land value (or
profit) will be shared with the original owners.
How are interests and concerns of farmers protected?
• Retrospective effect: Where awards are made but no compensation has
been paid or possession has not been taken, compensation shall be paid
at the rate prescribed under the new Act. Where the Award has not been
made the entire process shall be considered to have lapsed. Also where
acquisition has taken place five years prior to the commencement of the
new law but no compensation/ possession has taken place the
proceedings shall be deemed to have lapsed.
• Consent: Prior-consent shall be required from 70% of land losers and
those working on government assigned lands only in the case of public-
private partnership projects and 80% in the case of private companies.
This consent also includes consent to the amount of compensation that
shall be paid.
• Return of unutilized land: Land not used can now be returned to the
original owners if the state so decides.
• Share in sale of acquired land increased: The share that has to be
distributed among farmers in the increased land value (when the
acquired land is sold off to another party) has been set at 40%.
• Income-tax Exemption: All amounts accruing under this act have been
exempted from income tax and from stamp duty.
• Strict restrictions on multi-crop acquisition: The acquisition of
agricultural land and multi-crop land has to be carried out as a last
resort. There will be definite restrictions on the extent of acquisition of
such land in every state to be determined by the States concerned.
• Safeguards to ensure fair price: Given the way in which market value
is to be calculated and the imposition of a solatium of 100% over and
above the amount, the farmers are guaranteed a fair price for their land.
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• Acquisition only if necessary: The Collector has to make sure that no

other unutilized lands are available before he moves to acquire farm
land.
• Damage to crops to be included in price: The final award has to include
damage to any standing crops which might have been harmed due to the
process of acquisition (including the preliminary inspection).
• Share in developed land: In case their land is acquired for urbanization
purposes 20% of the developed land will be reserved and offered to
these farmers in proportion to the area of their land acquired and at a
price equal to the cost of acquisition and the cost of development.
• Fishing rights: In the case of irrigation or hydel projects, affected
families may be allowed fishing rights in the reservoirs.
• Additional R&R benefits: Farmers are also entitled to the various
rehabilitation and resettlement benefits which are enumerated in
response to question 2.
• Time-bound social impact assessment: The Bill mandates a social
impact assessment of every project which must be completed within a
period of six months.
Will , Rehabilitation and Resettlement Actually Happen Alongside
Land Acquisition?
The claim to fame is the idea that land acquisition and R&R will be
"integrated."
But this is also far from the truth. In particular, note that:
 Both the presentation and the Bill state that the R&R package will
not even be drafted until after the acquisition process is set
underway. People are expected to assess the impact of the project
(social impact assessment), give objections to the impact
assessment, object or accept the supposed public purpose being
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served, etc. - all without knowing what kind of rehabilitation is to

be done. Would this not be the first question asked of them?
 Can land be taken before R&R is complete? Presentation and
section 29(3) say no; section 53 says land can be taken before
compensation is paid, so long as interest is added. Even s. 29
leaves it to the Collector to decide when rehab is complete.

Can People Actually Enforce the Positive Provisions of this Law?

Having provided this confused mass of loopholes and complex
provisions, the law finally lets people down on the question of
enforcement. Witness the following:
 Anyone with a dispute cannot approach a civil court; they have to
go to a Dispute Settlement Authority in the State capital, or, in case
of Central projects, in Delhi. Is this feasible for most project
affected people?
 Moreover, no one can approach the authority directly; they have to
get a reference from the Collector (s. 38), the very person against
whom they are most likely complaining.
 The dispute settlement authority is only given the power to award
compensation, as noted above, and not to direct any authority to do
anything or to change the R&R package.
 A government official who violates any provision of the Act is at
most punishable by disciplinary action (s.58(3)), which is already
the case, and which is entirely controlled by the concerned
government.
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What are the safeguards in the law to ensure food security?

• Special provisions have been inserted in the Law to ensure that multi-
crop land is acquired only as a last resort.
• States are also required to impose limits on the area of agricultural/
multi-crop land that can be acquired in a State. No acquisition of such
lands in excess of that limit can take place.
• When acquiring agricultural land, the state has to cultivate an
equivalent area of land elsewhere as agricultural land. If they cannot do
this then they must deposit an amount equivalent to its value in an
account to be used for the purposes of enhancing food security.

Amendments made:

1. Removal of ‘consent’ clause: As per the previous law, land could be

acquired only with approval of 70% of land owners for PPP (Public
Private Partnership) projects and 80% for private entities. However, the
amendment, brought in by the new government removed this provision
of ‘consent’ for acquiring lands for five purposes –
I. Industrial corridors
II. Public Private Partnership projects
III. Rural Infrastructure
IV. Affordable housing
V. Defence
This has drawn much of the criticism not only from political circle but
also from activists like who launched a mass protest against the bill.
2. Return of unutilized land: According to the Act 2013, if the land
remains unutilised for five years, then it needs to be returned to the
owner. But according to the ordinance promulgated by the NDA
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government, the period after which unutilised land needs to be returned

will be five years, or any period specified at the time of setting up the
project.
3. According to the 2013 Act, land can be acquired by any private
company. But according the recent ordinance, land can be acquired by
any private entity.
4. As per the new law, if any government official commits an offence
during the process of acquisition, he/she cannot be prosecuted without
prior sanction from the government.
5. The amendments propose to include 13 legislations that are currently
exempted under the purview of the Act in the compensation,
rehabilitation and resettlement provisions. This is, however, seen as a
pro-farmer move as there was no uniform central policy of rehabilitation
and resettlement.

PROS AND CONS OF NEW LAND ACQUISITION

BILL:-
In the 2015 pre-Budget session of the Parliament
on February 24, the Narendra Modi government introduced the
controversial Land Acquisition Amendment Bill in the Lok Sabha amid
vociferous protest by almost all opposition parties. While the opposition
is branding changes in the current ordinance as ‘anti-farmer’, the
government claims that the new amendments will benefit farmers. The
Land Acquisition Act was passed by the Manmohan Singh-led UPA
government in 2013, and now the Modi government has introduced
Right to Fair Compensation and Transparency in Land Acquisition,
Rehabilitation and Resettlement (Amendment) Bill, 2015 to make
changes in the current Act.
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Here are positive and negative clauses of the new Land Acquisition
Amendment Bill:

Pros:

1- The existing Act kept 13 most frequently used acts for Land
Acquisition for Central Government Projects out of the purview.
These acts are applicable for national highways, metro rail,
atomic energy projects, electricity related projects, etc. The
present amendments bring all those exempted from the 13 acts
under the purview of this Act for the purpose of compensation,
rehabilitation and resettlement. Therefore, the amendment
benefits farmers and affected families.

2- The proposed changes in the Land Acquisition Act would allow

a fast track process for defence and defence production, rural
infrastructure including electrification, affordable housing,
industrial corridors and infrastructure projects including projects
taken up under Public Private Partnership mode where
ownership of the land continues to be vested with the
government.

3- As per the changes brought in the Ordinance, multi-crop

irrigated land can also be acquired for purposes like national
security, defence, rural infrastructure including electrification,
industrial corridors and building social infrastructure.

4- Profiteering by private interests taking advantage of government

acquisition (e.g. NOIDA, Bhatta Parsaul);

5- Non-existent or inadequate rehabilitation and compensation for

displaced people;
6- Affected people have no recourse for enforcing their rights,
which are often ignored both during land takeover (e.g.
POSCO) and during rehabilitation;
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7- As the central cause for all of the above, a decision-making

process that is totally controlled by government officials, with
no democratic or public involvement.

Cons:
1- The original Land Acquisition Act, 2013 had a consent clause
for acquiring land – industrial corridors, Public Private
Partnership projects, rural infrastructure, affordable housing
and defence. But after the central government changed, it
exempted these five categories from the rule of acquitting land
in the Bill tabled on February 24.

2- Social assessment which was mandatory before acquitting land

has also been exempted in the Bill tabled in the Lok Sabha.

3- As per the existing law, land will be given back to the farmer if
it remains unused for five years. The proposed amendment says
the land will be returned only if the specified project on the
land fails to complete the deadline.

4- Bureaucrats will be punished if found guilty of violating any

clause of the existing Land Act. However, the new clause
makes government sanction necessary to prosecute civil
servants.

5- The Land Acquisition Amendment Act, 2015 is currently

creating a lot of hassle in Parliament with the Lok Sabha
session being adjourned for the same on February 24. With
both opposition and ruling parties equally holding their leashes
tight on the Land Bill, only time will tell if the amendments in
the Land Acquisition Act will be passed or not and whether
they will be truly beneficial.
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Consequences

The consequences of land acquisition in India are manifold.The

empirical and theoretical studies on displacement through the acquisition
of land by the government for development projects have so far focussed
on the direct and immediate adverse consequences of land acquisition.
Most of the analytical as well as the descriptive accounts
of the immediate consequences of land acquisition for development
projects draws heavily from Michael Cernea’s ‘impoverishment risk
model’, which broadly enumerated eight ‘risks’ or ‘dimensions’ of
development-induced displacement. These eight risks are very much
direct and basic in nature which are (i) landlessness, (ii) joblessness, (iii)
marginalization, (iv) loss of access to common property resources, (v)
increased morbidity and morality, (vi) food insecurity, (vii)
homelessness and (viii) social disarticulation . Recently L.K. Mahapatra
has added ‘loss of education’ as another impoverishment risk in
situations of displacement .
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Alternatives:-

One of the alternative proposals to land

acquisition is leasing the land from landowners for a certain lease
period. Proponents cite how land acquisition policies by Governments
unwittingly encourage rampant land speculation making the projects
expensive since huge portion of investment would be need to be
allocated for land acquisition costs. According to them, policies of land
acquisition gave way to political cronyism where land is acquired
cheaply by securing favors from local governments and sold to
industries at steep markup prices.
Leasing land, may also support sustainable project
development since the lands need to be returned to the landowners at the
end of the lease period in a condition similar to its original form with out
considerable environmental degradation. When the land is leased then
anybody who has to otherwise give up land or livelihood will be
compensated for its growing valuation over time. In this model, the
landowner lends her land to the government for a steadily-increasing
rent, or through an annuity-based system as currently practiced in
Haryana and Uttar Pradesh.
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BIBLIOGRAPHY : -

BOOKS REFERRED..
1. Indian polity (M. LAXMIKANT)

2. THE INSTITUE OF C.A. OF INDIA (GENERAL ECONOMICS)

WEBSITE : -
1. http://www.google.com

2. http://www.wikipedia.org

3. http://www.lawindia.com

4. http://www.economicstimes.com