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Land acquisition legislation: Amid Central logjam, states move forward

With the Bihar verdict not going in the BJP-led NDA’s favour, the road for the much delayed legislation only gets tougher from here.

Written by Shruti Srivastava |
November 10, 2015 2:15:24 am
land acquisition, Bihar election result, land acquisition bill, center land acquisition bill, states land acquisition bill, NITI aayog, separate land acquisition bill, india news, latest news Most states which amended the land acquisition law have set the compensation offered in the 2013 Act as benchmark and are paying land owners over and above this.

While finance minister Arun Jaitley has exuded hope that the NDA government would be able to build fresh consensus on amending the controversial Land Acquisition legislation and introducing it again in Parliament, the loss of Bihar Assembly election for the BJP indicates that any such move by the government could be an uphill task, at least in the upcoming Winter session.

However, states, it seems, are not willing to wait for the amendments in the Central legislation of 2013 — touted as the biggest hindrance in acquiring land for developmental purposes — anymore. States such as Madhya Pradesh, Andhra Pradesh, and Tamil Nadu have started acquiring land successfully by either amending the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act (RFCTLARR), 2013, or tweaking the rules accompanying it. This has given rise to a set of land acquisition models which are innovative and at the same time ensure easier acquisition of land.

Earlier in August, the Centre had urged states to go ahead with their own land acquisition laws for boosting infrastructure development. Land acquisition or acquisition of property is a List-III, Entry 42 subject provided for in the Concurrent List, Seventh Schedule. According to the provisions of Article 254(2), state governments can bring a law on a Concurrent List item which conflicts with the Central law by getting Presidential assent. Experts say that the states taking the lead is the way forward to ensure smooth acquisition of land though a Central legislation would provide the broad contours of the states’ land laws.


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“Most of the land acquisition takes place at the state level. Centre only gets involved for national highways. We need to have models where land can be acquired without social strife and with states taking the initiative and coming up with their own policies, this shows the way forward for a new discourse,” Madan Sabnavis, chief economist, Care Ratings, told The Indian Express. He said that the problem mainly arises in acquisition of agricultural land and now with states offering alternative lands, “they are showing astuteness in their willingness to deal fairly with the land owners”.

Most of these states which have amended the land acquisition law have set the compensation offered in the 2013 Act as the benchmark and are compensating the land owners over and above this. The 2013 Act said that while rural areas would get a minimum compensation between two to four times the market value of land along with the value of the assets on that land, urban areas would be compensated two times the market value of land along with the value of the assets on that land. The Indian Express has learnt that even Congress-ruled states like Karnataka and Assam are also considering bringing in amendments in the Land Act to attract investment. A look at the new models developed by the states, which are likely to pave the way for similar models across the country:


The AIADMK-led state is the first and perhaps the only state so far to receive Presidential assent for amendments in the RFCTLARR. The state sought exemption of land acquisition done under the Tamil Nadu Highways Act, 2001; Tamil Nadu Acquisition of Land for Industrial Purposes Act, 1997; and the Tamil Nadu Acquisition of Land for Harijan Welfare Schemes Act, 1978; from the purview of the consent clause and social impact assessment clause of the RFCTLARR. This was because, according to an official, the state acquired more than half of its land under these three Acts. These amendments were passed by the state Assembly in December last year though the compensation, rehabilitation and resettlement modalities of the Central Act were retained.


The land-pooling mechanism used for acquisition of 32,000 acres of land from farmers by the state government to build the state’s new capital — Amaravati — is a model to replicate. The state has committed to pay an annuity of Rs 50,000 per acre for 10 years to the 18,000 farmers from whom the land has been acquired. It will also give back 1,250 square yards of residential plot and 200 square yard of commercial plot in the new city for every acre. Furthermore, the state has also exempted the original owners from capital gains tax and stamp duty on the first sale.

The package being given to land owners depends on the kind of land. For instance, owners of dry land having clear title documents will get 1,000 square yards of residential and 200 square yards of commercial plots for every acre surrendered. Similarly, owners of wet or irrigated land with clear titles will get 1,450 square yards of residential and 450 square yards of commercial plots while those with assigned lands will get 1,250 square yards residential and 450 square yards of commercial plot.


The state government invoked the Entry 18 of the State List, Seventh Schedule, to frame its land purchase policy. According to the Entry 18, “land, that is to say, rights in or over land, land tenures including the relation of landlord and tenant, and the collection of rents; transfer and alienation of agricultural land; land improvement and agricultural loans; colonisation.”

A senior state government official told The Indian Express that the state has framed the “comprehensive consent land purchase policy only for the government projects by paying the current value of the farmer’s land along with the current value of the properties attached to the land. In addition to this, the equivalent amount shall also be paid to the farmers as the Rehabilitation Grant with a view of alienation from his land.”

This would ensure that the farmer gets at least 200 per cent of the market price. Also, for government projects, the state will first explore the option of availability of the government land and only after that will purchase of private land be explored, the official added.

“If some farmers are not giving their consent for purchase of their land for government projects, only then the provision of Land Acquisition Act will be applied for acquiring the land,” the official said.


The financial hub of the country, which has mega-projects worth Rs 50,000 crore in various phases of implementation across the state, has facilitated the highest compensation, almost four times more than the land price, to win over those protesting against land acquisition. Further, it issued a notification allowing direct purchase of land by private players from land owners, thereby ensuring that there is no interference from the government.

The government has permitted a compensation of four times the land value in rural areas without any gradation while a compensation of 3.2 times the land value has been fixed for semi-urban areas. The compensation in urban areas is fixed at two times the land value.

The state claims that the move will help irrigation, infrastructure projects, national highway work, coastal road, Mumbai Trans Harbour Link, railway expansion projects complete with elevated corridors, metros, western water ways, and Mumbai-Nagpur Superfast Highways.


While the Rajasthan government had started working on its own land law last year as a way around the Centre’s Land Act, it put its exercise on hold following the Central government’s promulgation of an Ordinance. However the Ordinance was introduced thrice after which it was ultimately dropped due to lack of support in the Rajya Sabha.

“Now the state is considering revisiting the state law to make it investment friendly,” a senior government official said.

A senior official from Assam said that though the state government has framed and notified rules for RFCTLARR and continues to follow the 1964 Act of the state, “the Chief Minister has already said that the state may introduce its own version of the land acquisition Bill that may allow companies to lease the land instead of acquiring it outright and also allow land owners to become shareholders so that they can benefit from the companies’ growth.”

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