Sunday, Oct 02, 2022

In The States’ Court

States, more experienced on land acquisition, must be allowed their own laws

UPA law, Niti Aayog, UPA government, Central legislation, Bihar elections, NDA government, UP legislation, iecolumnist, dhanmanjiri sathe, Indian Express In the case of one particular piece of land in Maharashtra, six times the market rate was paid for acquisition.

For anyone who has been following the land acquisition debate, the recent suggestion that the states be allowed to bring their own legislation to amend the UPA law does not come as a surprise. Earlier, Bibek Debroy, member of the Niti Aayog, had suggested something similar.

To set the record straight, prior to the 2013 act, the Central legislation of 1894 was in force. However, over a period of time, almost all states had passed their own laws and the 1894 act was hardly ever used. It was the state that was responsible for acquiring land, even for projects such as an airport, over which the Centre has control. Thus, the Central government hardly acquires any land and hasn’t been able to accumulate expertise or experience on the matter.

However, before the 2014 elections, the UPA got the new act passed with cross-party support. That the colonial law was repealed was made into a big issue, unmindful of the fact that it was hardly being used. What the 2013 act suspended, de facto, were the various state laws.


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Now that the amendments to the 2013 act seem to be in trouble, the NDA government is in an unenviable position. It is not clear whether the government has the appetite to call a joint session of Parliament to get the amendments passed. Or, perhaps, the impending Bihar elections have caused a change in priorities. What is being proposed now is a throwback to the earlier situation. That is, the 2013 act could stay as is. Section 107 of the 2013 law says that the states are free to enact their own legislation to enhance or add to the compensation package, as well as the rehabilitation and resettlement measures. Ordinarily, the state governments could pass their own laws only as long as they did not contradict the Union legislation. But under Article 254(2) of the Constitution, for concurrent list subjects, the states can pass laws repugnant to the Central legislation with the approval of the president.

This may not be a bad idea. As has been argued before, there are many problems with the 2013 act. Many states had better laws in place.

For example, in the case of one particular piece of land in Maharashtra, six times the market rate was paid for acquisition. The convincing reason for this was that it was land in which a large Indian multinational corporation was interested and though it was in a rural location, it was quite close to an already developed area. In contrast, the 2013 law mandates that only four times the market price be paid for acquiring land in rural areas. As far as social impact assessments (SIAs) are concerned, the 2013 law says that the government has the right to reject the expert group’s recommendations. The only caveat is that it has to give in writing the reasons for doing so. Much of the SIA’s righteous sheen would be lost if only its supporters factored in this provision. Further, the 2013 legislation does not make consent necessary for land acquisition for government projects. In contrast, many state laws have strict consent clauses. The issue of irrigated land has been unnecessarily jinxed. Suffice it to say that the governments of Haryana and Punjab (the most irrigated states) have asked for an exemption on this clause. Their argument is that if this clause is applied to their states, no further industrialisation would be possible. India’s food security has to be ensured by increasing productivity, not by keeping more land under agriculture.

However, the real area of dispute will be the five categories of projects that have been exempted from consent and SIA requirements by the ordinance. It will be interesting to see what the states do on this front.


The manner in which the 2013 act was passed was alarming. Right before elections, everyone wants to be perceived as pro-poor, which is why the legislation was cleared without substantial deliberation. World over, including India, there is a tendency to go for expansionary budgets before elections. However, what we have here is a law, an entirely different ballgame, that was passed in view of electoral considerations. Hopefully, this does not set a precedent for future.

The writer is professor of economics at Savitribai Phule Pune University

First published on: 24-07-2015 at 12:00:00 am
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