When Finance Minister Arun Jaitley announced that the provisions of the national law governing land acquisition would be amended through an ordinance, it did not come as a surprise. Murmurs over a possible and looming series of changes to the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (RFCLARR), 2013 had begun almost immediately after the new BJP government came into power in mid-2014.

The Ministry of Rural Development, Nitin Gadkari called for a meeting with state and union territory governments in June 2014 where nineteen amendments were proposed to the RFCLARR legislation.

What was different in the RFCLARR Act, 2013?

The RFCLARR legislation had been one of the flagship laws promulgated in the earlier United Progressive Alliance’s (UPA) regime. Several social movements had welcomed the provisions of social impact assessments (SIA), consent-seeking and higher compensation rates, while criticising the applicability of the law when land is being acquired for a stated private purpose.

The earlier 1894 land acquisition law allowed governments to acquire land using its eminent domain powers only if it was for public purpose. The 2013 law had expanded the possibility of governments directly acquiring land for projects in partnership with the private sector, or of the entire land being handed over to the private sector. This included acquisition for industrial corridors, mining projects, infrastructure projects and so on.

The Act had, however, added provisions such as the SIA and made it imperative to seek the consent of 70 percent of affected people in case of public private partnership projects and 80 percent of people when it came to projects entirely owned and managed by the private sector. Land acquisition could not take place unless such consent was sought and an SIA process was duly carried out.

What the 2013 law had also done was to ensure that no irrigated multi-cropped land would be acquired under the RFCLARR. It did not restrict private developers from purchasing such land directly from the private owners, but restricted the government to acquire such land for any purpose. The latter would be allowed only “under exceptional circumstances”, and in case of linear projects such as those relating to railways, highways, major district roads, irrigation canals, power lines etc.

The 2013 law elaborated on the definition of an “affected person” as one whose consent must be sought and who would need to be compensated when land is being acquired. It included all people who owned the land and whose livelihoods would be lost if the land was acquired, including sharecroppers, land tenants and so on.

It also included all people whose rights had been recognised under the Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006.

Finally, it included all those people whose livelihoods were dependent on the forest land or water bodies, three years prior to the acquisition of land, and which would be lost in the land acquisition process. An elaborate process of determining the market value of the land and determining compensation by the District Collector was laid out in the RFCLARR, 2013.

Another important element of this law was a clause, which relates to the return of land where an award for land acquisition had been recorded but neither had physical possession of land been done, nor compensation paid for five years. In such cases, under the 2013 legislation, the land had to be returned to the owners and if the government felt necessary, the proceedings of land acquisition could be initiated afresh.

This broad backdrop is important to understand the nature of changes, which have been put forward by the RFCLARR Ordinance dated 31 December 2014.

Rice fields in North Karanpura Valley in Jharkhand. Pic: Kanchi Kohli

Exemptions from SIA and the consent clause

One of the main changes effected by the ordinance results in exemption of a whole range of projects from the SIA and the consent clauses prescribed in the 2013 legislation. While these projects will still need to comply with the compensation-related provisions, they will no longer be required to seek consent of 70-80 percent of the people, even when a project is entirely promoted by the private sector or in partnership with the government.

The new ordinance adds an entirely new section to the RCFLARR Act (Section 10 A under Chapter IIIA), which lists a set of projects exempt from the SIA and consent clauses of the parent legislation. These include sectors such as defence, rural infrastructure, affordable housing for poor people, all industrial corridors and all infrastructure projects under public private partnership where government continues to own land.

All the projects listed in the new Section 10A will also be allowed to acquire multi-cropped farmlands without going through any SIA or having to seek consent. The RFCLARR had brought in this restriction under Chapter III under the broad purpose of “safeguarding food security”, by disallowing the acquisition of multi-cropped farm lands unless under exceptional circumstances or for linear projects as described earlier.

However, the RFCLARR never really laid out a set of criteria to decide what could be held as an exceptional circumstance, thereby leaving it to the discretion of the government in question to apply it where convenient.

The recent set of changes have been pushed through by an ordinance, presumably because with the RFCLARR 2013 in place, many private sector outfits had begun complaining that carrying out SIAs and consents would delay land acquisition and thereby, the launch or construction of industrial or infrastructure projects.

This move has already been opposed by several constituencies, including political outfits such as those affiliated to regional political parties holding sway in Rajasthan, Haryana and West Bengal.

Return of land not under physical possession

Another important change that the new ordinance has brought about relates to Section 24 of the RFCLARR Act governing the return of acquired land when no physical possession or compensation related proceedings have been carried out for five years, even after acquisition notices have been issued and awards of compensation to the affected have been passed.

What the 2014 ordinance does is that it gives partial relief to those projects, where the physical possession of land or payment of compensation has not been possible due to a court injunction or an order. For instance, if an affected community has gone to court against the land acquisition proceedings and the court has granted relief in the form of an interim stay on acquisition or possession, this clause (Section 24) of return of land will be applicable.

The ordinance states: “…any period or periods during which the proceedings for acquisition of the land were held up on account of any stay or injunction” shall be excluded while computing the period of five years when a project authority could either not take physical possession of the land or pay compensation.

Applicability of beneficial provisions of RFCLARR to other laws

A third set of changes relates to Section 105 of the RFCLARR, 2013. This section sought the issuance of a fresh notification, which would enable application of the “beneficial” provisions of rehabilitation and compensation in case of other laws being used to carry out land acquisition through their own processes.

For instance, the Railways Act, 1989 or the Coal Bearing Areas Acquisition and Development Act, 1957 have their own processes through which land acquisition may take place. The RFCLARR Act would not apply to these instances. However, the makers of RFCLARR felt that the provisions of consent or higher compensation rates could also be added to these legislations if they were perceived to be more beneficial.

A notification for this purpose was required to be issued and also cleared by the Parliament before this could take effect. However, the land ordinance completely does away with the requirement of this notification. Instead what it says is that the provisions of the RFCLARR Act related to rehabilitation, resettlement as well as provision of infrastructure amenities like roads, drinking water, fair price shops, burial and cremation grounds will apply to all enactments listed in the Fourth Schedule of the RFCLARR, starting from 1 January 2015.

What this implies is that even when land is acquired for coal mining, railways, nuclear power installations, highways etc in future, it would be acquired under the RFCLARR Act and not the other existing legislations.

A comparative analysis of the provisions of the thirteen laws listed in the Fourth Schedule of the Act will be needed to understand whether this is good or bad news for affected communities.

The road ahead 

The present ordinance might be the first of the many changes that this government seeks to bring to the land acquisition processes. However, news reports indicate that President Pranab Mukherjee has questioned the government on the need to go ahead with these changes through an Ordinance, rather than through due amendment of the law. The latter would require going through both houses of the Parliament and convincing the legislature of the justification of these amendments and exemptions.

However, Jaitley, who is considered to be the main architect of this ordinance, has defended it and also challenged the state governments opposing it. He is quoted to have said that, “History will judge how these states will lose out in the era of competitive federalism.”

Even as we await the final promulgation of these amendments, its design has sent out clear signals that the present government does not wish to involve affected people in decision-making around land use change for industrial purpose. Such processes are not just socially critical for a country like India, but also necessary to showcase good governance.

Riding roughshod over people’s livelihoods, inclusive planning and informed decision-making will only create more conflicts than resolve them.  These principles are often paid lip-service by governments, but forgotten whenever they require slow and tedious negotiations with citizens. Instead, legal changes like the current ordinance are brought in, challenging the very pillars of the democracy that the country is constitutionally committed to.


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