The Land Acquisition and Rehabilitation Resettlements (LARR) Bill 2011: Civil Services Mentor Magazine December 2012

The Land Acquisition and Rehabilitation Resettlements (LARR) Bill 2011

The Indian economy has traditionally been an agrarian economy, where 70% of the population is dependent on agriculture as their primary source of livelihood. Significantly, land is also the most essential asset for the development and growth of any nation, particularly in the infrastructure sector. To fulfill this said objective, the Government has to acquire land under the Land Acquisition Act, 1894 and 18 other special Acts, which are applicable to various other sectors including Highways, Railways and Ports.

Land acquisition and compensation have always been an emotional and highly contentious issue between the Government and landowners. Recent agitations and protests by farmers and land owners against the Government for unfair compensation and forcible acquisition of land in Singur and Nandigram (W.Bengal), Jaitapur (Maharashtra) and Greater Noida (U.P) have been witnessed by the world.

After three rounds of vigorous debate, a Group of Ministers has approved the controversial Land Acquisition Bill, with few changes from the version presented to the Union Cabinet last month. This paves the way for the Bill to be introduced in Parliament in the winter session. Land acquisition is the process by which the government forcibly acquires private property for public purpose without the consent of the land-owner. It is thus different from a land purchase, in which the sale is made by a willing seller. Though land is a state subject, “acquisition and requisitioning of property” is in the concurrent list. Both Parliament and state legislatures can make laws on this subject. The government had introduced a Bill to amend this Act in 2007. That Bill lapsed in 2009 at the time of the general elections. The government enacted a new bill in 2011.

In a history spanning 117 years of pre and post Independence India, for the first time an honest attempt has been made by the Government of India to outline an enactment for rehabilitation and resettlement of the landowners and farmers, whose land is to be acquired under the new draft bill ‘The Land Acquisition and Rehabilitation Resettlements (LARR) Bill 2011’. The said bill seeks to strike a fine balance between the need for facilitating land acquisition for various public purposes, including infrastructure development, industrialization and urbanization, while at the same time eloquently addressing the apprehensions and fears of the landowners and farmers and those whose livelihoods are dependent on the land being acquired, by providing a transparent and legal framework aimed at adequately compensating people for the loss of their land as well as ensuring the suitable rehabilitation of those who have been displaced.

The preamble to the Bill says ‘A Draft Bill to balance the need for facilitating land acquisition for industrialisation, development of essential infrastructure facilities and urbanisation, while at the same time to meaningfully address the concerns of farmers and those whose livelihoods are dependent on the land being acquired’. While the ultimate end of land use here is specified as a matter of public purpose the present function of the land as meeting the public purpose of food security is diluted to highlight it merely as a social concern of the farmers. The issue is dealt as a case that can be solved through monetary compensation. Only the social security aspect of the farmers is focused here, though not completely, while the ecological and food security aspects remain in the dark.

The preamble also claims that the draft bill aims to mitigate the adverse impacts on habitats and is sensitive to the natural resource base. But the claim is not reflected in the clauses that follow. It also speaks about ensuring a humane, participatory, informed, consultative and transparent process of land acquisition and the realization of a stage in which the affected persons become partners in development. It is true that the draft policy does have indications of being more humane, participatory, consultative and transparent compared to the existing law.

The issues raised here is to highlight how much more humane, participatory, consultative and transparent it can aspire to be.

While appreciating the concept of partnership in development, the note also attempts to highlight the nature of development envisaged by the policy makers and the extent of partnership offered to the stakeholders concerned.


Despite sharp divisions over the consent requirements, sources at the GoM indicated that the final draft says only two-thirds of landowners will have to agree before land can be acquired for private sector projects as well as joint private-public partnerships. The original Bill had called for 80 per cent consent from both landowners as well as those who stood to lose their livelihood. Industry lobbyists had pushed for this requirement to be diluted. It is not clear what has been decided on the other controversial issue of retrospective effect. The original Bill had stipulated that its compensation and rehabilitation provisions would apply retrospectively to ongoing acquisitions which had not yet completed the process of land transfer under the old Land Acquisition Act, 1894. Sources say this clause has been removed and instead, a cut-off date — to be decided later — will be set for the new Act’s provisions to come into force. “The Bill is finalised. We have finalised the draft,” Agriculture Minister Sharad Pawar, who chaired the GoM, told journalists after the meeting. “On each and every issue where there were different views, we succeeded in bringing [about] some understanding.” The Bill, now named The Right to Fair Compensation, Resettlement, Rehabilitation and Transparency in Land Acquisition Bill, was originally introduced in Parliament in September 2011. Thereafter, it was referred to a Standing Committee. The Cabinet, which considered a revised draft last month, referred the Bill to the GoM after several Ministers objected to provisions that were seen as hurdles to infrastructure development and investor sentiment.

Some Revolutionary Features of this Bill Impacting Urban and Rural Areas:

  • It mandates that the awarded compensation amount is not less than twice that of the market value determined, whereas in the rural areas it will be not less than six times the original market value.
  • It also proposes that the consent of 80% of the project-affected families will be mandatory, if the Government proposes to acquire land for the use by private companies for stated public purpose or PPP projects other than that for national highways.

  • The draft bill further suggests that under no circumstances should multi-cropped, irrigated land be acquired and most of such land lies in the Indo-Genetic plains covering Punjab, Haryana, Uttar Pradesh, West Bengal and Bihar.

  • The draft bill also gives some relief to the landowners by creating a provision that it will not be acquiring land for private companies for their ‘private purpose’.