This could be the right impetus for growth
With its focus on social inclusiveness, Union Minister for Rural Development Jairam Ramesh’s newly drafted National Land Acquisition and Rehabilitation and Resettlement Bill which was approved by the Cabinet on Monday night and is likely to be tabled in Parliament on Wednesday is much welcome. The new Bill, when enacted, will replace India’s current 117-year-old land acquisition law that was framed by this country’s colonial masters and understandably no longer reflects 21st century popular aspirations. For way too long now, antiquated laws from the British period have hindered growth and development in India, particularly with regard to land acquisition which is intrinsically linked to industrialisation and modernisation. The lack of effective legislation has led to bitter disputes between land-owners and investors with the Government caught between the proverbial rock and a hard place. Even today several major projects across the country remain stalled — the mega Posco steel project as well as Vedanta Resources’ bauxite mine project are glaring examples — as warring parties struggle to come to a mutually beneficial understanding in the absence of a pre-defined roadmap to resolve prickly issues involved in the land acquisition process. As the opening statement of the draft Bill says, “Land markets in India are imperfect. There is asymmetry of power between those wanting to acquire land and those whose lands are being acquired.” Consequently, precious land has often been acquired at throw-away prices from vulnerable land-owners, leading to much dissent and public protest. In this context, two of the most contentious issues in the land acquisition process are first, what constitutes as fair compensation and, second, the terms and conditions of the rehabilitation and resettlement package that is due to affected land-owners. Mr Ramesh has made a laudable attempt to tackle both these problems by laying down some basic guidelines: With regard to the sale price, his Bill recommends that companies pay twice the market price in urban areas and four times in rural areas; as for the R&R package, companies will have to pay Rs 5 lakh to displaced individuals, a subsistence allowance of Rs 3,000 per family per month for a year and an annuity of Rs 2,000 per family per month for 20 years. Moreover, employment has to be offered to one member of each affected family or Rs 200,000 in lieu of a job.
While the exact terms and conditions of the package are open to debate in Parliament, the fact that R&R has been made an integral part of the new Land Acquisition Bill is in itself a praiseworthy initiative. For, as the foreword says, “R&R must always follow upon acquisition of land... Not combining R&R with land acquisition one risks the neglect of R&R (and hence, public resentment).” Clearly, the Bill aims to infuse greater social equity in the contentious process of land acquisition. Towards that end, the Bill also mandates that the sale of land can only take place if at least 80 per cent of the affected families give their consent. While some at India Inc are already crying hoarse about how the Bill will send land prices shooting, the fact remains that if implemented in the right spirit it should actually jumpstart industrialisation which is crucial to India’s growth story.
With its focus on social inclusiveness, Union Minister for Rural Development Jairam Ramesh’s newly drafted National Land Acquisition and Rehabilitation and Resettlement Bill which was approved by the Cabinet on Monday night and is likely to be tabled in Parliament on Wednesday is much welcome. The new Bill, when enacted, will replace India’s current 117-year-old land acquisition law that was framed by this country’s colonial masters and understandably no longer reflects 21st century popular aspirations. For way too long now, antiquated laws from the British period have hindered growth and development in India, particularly with regard to land acquisition which is intrinsically linked to industrialisation and modernisation. The lack of effective legislation has led to bitter disputes between land-owners and investors with the Government caught between the proverbial rock and a hard place. Even today several major projects across the country remain stalled — the mega Posco steel project as well as Vedanta Resources’ bauxite mine project are glaring examples — as warring parties struggle to come to a mutually beneficial understanding in the absence of a pre-defined roadmap to resolve prickly issues involved in the land acquisition process. As the opening statement of the draft Bill says, “Land markets in India are imperfect. There is asymmetry of power between those wanting to acquire land and those whose lands are being acquired.” Consequently, precious land has often been acquired at throw-away prices from vulnerable land-owners, leading to much dissent and public protest. In this context, two of the most contentious issues in the land acquisition process are first, what constitutes as fair compensation and, second, the terms and conditions of the rehabilitation and resettlement package that is due to affected land-owners. Mr Ramesh has made a laudable attempt to tackle both these problems by laying down some basic guidelines: With regard to the sale price, his Bill recommends that companies pay twice the market price in urban areas and four times in rural areas; as for the R&R package, companies will have to pay Rs 5 lakh to displaced individuals, a subsistence allowance of Rs 3,000 per family per month for a year and an annuity of Rs 2,000 per family per month for 20 years. Moreover, employment has to be offered to one member of each affected family or Rs 200,000 in lieu of a job.
While the exact terms and conditions of the package are open to debate in Parliament, the fact that R&R has been made an integral part of the new Land Acquisition Bill is in itself a praiseworthy initiative. For, as the foreword says, “R&R must always follow upon acquisition of land... Not combining R&R with land acquisition one risks the neglect of R&R (and hence, public resentment).” Clearly, the Bill aims to infuse greater social equity in the contentious process of land acquisition. Towards that end, the Bill also mandates that the sale of land can only take place if at least 80 per cent of the affected families give their consent. While some at India Inc are already crying hoarse about how the Bill will send land prices shooting, the fact remains that if implemented in the right spirit it should actually jumpstart industrialisation which is crucial to India’s growth story.
