1. Towards a Pragmatic Land
Acquisition Policy for Industrial Use
TOPIC C6
ANAND PATIL (16/128)
MOHAMED ANAS (16/150)
PRABHU P (16/155)
RAM KUMAR V (16/159)
SHYAM PRASATH B (16/171)

2. Value Land
of Acquisition LARRB Land
Land Act, 1894 2011 Valuation
Land Case Global Solutions
Acquisition of Scenario
Posco

3. Land Ownership Confers..
Tangible Intangible
Shelter Security
Standing in
Livelihood society

4. Land Acquisition in India
 The process of land acquisition by the central or state government of
India for various infrastructure and economic growth initiatives
Reason for Acquisition:
Definition of Public Purpose
i. Strategic purposes
ii. Industry & Infrastructure
iii.Land acquired for R&R purposes
iv. Planned development - residential purpose for poor, educational & health
schemes
v. Land for private companies for public purpose
vi. Needs that arise from natural calamity

5. LAND ACQUISITION ACT,1894
Law that allows government to acquire land from the land owners after
paying a fixed government compensation in lieu of their losses
Acquisition Process
Investigation & *From Chapter 7 of the ACT
Notification
Objection &
Confirmation
Claim & Reward
Reference to Court
Apportionment

6. LAND ACQUISITION
• First Step –
• Objections from
Investigation of • The collector • Any person • Each of the
the persons
land by the offers a fair interested to claimants are
interested
authority who price to an whom the entitled to the
within 30 days
is need of land owner award is not value of his
subject to
& application • The market satisfactory can interest, which
conditions
has to be filed value of the submit a he has lost, by
• Collector to written compulsory
• Preliminary land is
hear the application to acquisition
notice must be determined at
objections & the court
published in the date of • Thus it is
submit the
official gazette notification. • This application required to
report to
& 2 daily • Award has to should be made value a variety
government
newspapers be given within within six of interest,
• After weeks from the rights and
• After a period of 2
notification the date of claims in the
notification, the years from the
collector declaration of land in terms of
land owner is date of
proceeds with the award money
prohibited to notification
the claim
sell his land

7. Compensation and Valuation
 The current Act requires  The 2007 Bill requires payment of the
market value to be paid for highest of three items:
the land and any other  the minimum value specified for stamp
property on it as well as duty
expenses for compelling  the average of the top 50 % by price of
the person change place of land sale in the vicinity
residence or business  the average of the top 50 % of the land
purchased for the project from willing
sellers
 For computing recent land sale, the
intended land use is to be used. Thus,
agricultural land being acquired for an
industrial project will be paid the price of
industrial land

8. Impacts – Controversies & Criticisms
Development Related Displacement
Displacement of public due to large scale projects like dams, canals,
thermal plants, sanctuaries, industries & Mining etc..,
Statistical reports indicated 1 in 10 Indian tribals is a displaced person
 Compensation offered was fairly low with regard to the current prices
 The displaced people failed to get better jobs due to low Human Capital
 Majority of the displaced people are from the weakest sections of the
society & they are unable to raise their voice
Ignorance of stakeholders in the share of the property
 This provides an added benefit to many entrepreneurs and promoters of
the company

10. Law is Weak
Lands are acquired
Procedure is costly with NO public
& cumbersome, purpose attached in
Law is Harsh
delayed the name of the ACT
Valuation Compensation offered
techniques are is lower than market
flawed prices
Land owners get to The matter of
peg a higher value Relocation &
than the real value Rehabilitation of land
Additional payment owners displace was
of solatium over the not covered in the
property value framework current
law

11. Impediments for Industries
Acquisition cost
increase by 3 –
3.5 times No clear
PPP is not
definition of
defined in ‘public
“Affected
purpose’
families”
Agglomeration of
land (numerous 80% of the land
sources, land from willing
records and land sellers
holdings)
Industries not Return of land if
under public Impediments not utilized for a
purpose certain period

12. Land Acquisition Issue: POSCO Case
 $12 billion investment
 Biggest FDI project in India
 Signed MoU with Orissa state
Govt in 2005
 Project implementation
required 2900 acres of land

13. Land Acquisition Issue: POSCO Case
Issue
1. Current status- acquired 2,100 acres of
land and transferred 546 acres to
POSCO India
2. Land to be given to POSCO plant is
classified as forest land
3. Hundreds of tribal families using the
forest land for betel cultivation
Forest Rights Act: “Many of the people of the area are eligible for right over this land,
especially the lands they are cultivating, as they have been living in the area for more
than 75 years”
NC Saxena committee: all land acquisition and transfer for Posco India
project is violation of Forest Rights Act and need to be stopped
Posco has not set up any health clinics schools in the region

14. WHAT IS THE REMEDY ?

15. Land Acquisition Rehabilitation and
Resettlement Bill 2011
• Heightened public concern on Land
Acquisition issues
Public Concern • Absence of a national law to provide for the
resettlement, rehabilitation and
compensation for loss of livelihoods
• While multiple amendments have been
made to the Original Act, the principal law
Outdated law continues to be the same i.e. The Land
Acquisition Act of 1894
• Addressing concerns of farmers and those
whose livelihoods are dependent on the
land being acquired
Need for Balance
• While facilitating land acquisition for
industrialisation, infrastructure and
urbanisation

16. Land Acquisition Rehabilitation and
Resettlement Bill 2011
Purpose of the Bill
LARR 2011 seeks to repeal and replace India's Land Acquisition Act, 1894. The Bill seeks
to enact a law that will apply when
 Government acquires land for its own use, hold and control.
 Government acquires land with the ultimate purpose to transfer it for the use of
private companies for stated public purpose.
 The purpose of LARR 2011 includes public-private-partnership projects, but excludes
land acquired for state or national highway projects.
 Government acquires land for immediate and declared use by private companies for
public purpose
LARR Bill 2011 aims to establish the law on land acquisition, as well as the rehabilitation
and resettlement of those directly affected by the land acquisition in India
Need for the Bill
• fair compensation when private land is acquired for public use
• fair rehabilitation of land owners and those directly affected from loss of livelihoods

17. Definition of ‘Public purpose’ under LARR, 2011
The following categories are considered as • Village or urban sites: planned
Public purpose development -
• Strategic purposes: e.g., armed forces, residential purpose for the poor and
national security educational and health schemes
• Infrastructure and Industry: where • Government administered schemes
benefits largely accrue to the general public or institutions
• Railways, roads and ports built by • Needs arising from natural
government and public sector enterprises calamities

18. Definition of ‘Affected Families’
Land Owners
• Family whose land/other immovable properties have been
acquired
• Those who are assigned land by the Governments under
various schemes
• Right holders under the Forest Rights Act, 2006
Livelihood Losers
• A family whose livelihood is primarily dependent on the land
being acquired
• May or may not own property Land
Owners
Affected
Families
Liveliho
od
Losers

21. Major Changes brought by LARR Bill 2011
•Consent
80% consent for acquisition for private projects,
70% consent for public-private partnership (PPP) projects
No consent for infrastructure projects fully owned and executed by the
government
Consent from affected parties in addition to land owners
•Return of Un-used land
Land acquired and if no development in 5 years, it should be returned to Land
bank or Original land owner
• Share in Appreciation
Return of
The
Land revised Bill stipulates the original land owners a 40% share in the
appreciated land value
• Fertile, irrigated, multi-crop land out of bounds for compulsory acquisition

22. R & R in LARR Bill, 2011
 Acquisition of more than 100 acres, R&R Committee shall be established to
monitor the implementation of the scheme at the project level and National
Monitoring Committee is appointed at the central level
 The definition of ‘affected family’ has been enlarged to include landless families of
agriculture labourer or artisans dependent on such land for their primary source
of livelihood along with the land owners
 Every resettled area is to be provided with certain infrastructural facilities. These
facilities include roads, drainage, provision for drinking water, grazing land, banks,
post offices, public distribution outlets, etc
 Potential escalation in land price after acquisition to be shared for ten years
 R&R entitlements
•land for a house as per the Indira AwasYojana in rural areas or a constructed
house of at least 50 square metres plinth area in urban areas
• a one-time allowance of Rs 50,000 for affected families
• the option of choosing either mandatory employment in projects where jobs
are being created or a one-time payment of Rs 5 lakhs or an inflation adjusted
annuity of Rs 2,000 per month per family

23. Comparative Evaluation of Land Acquisition and
Compensation Processes across the World

24. Land Acquisition – Three Axes
Method of compensation
Process of Land Acquisition
Principle of Land Acquisition

25. Land Acquisition Principles – Public Purpose
• Power and the terms under which it can be exercised is either directly vested in
the constitution (US, Australia and China), or, is specified in enacted legislation
(Hong Kong, Malaysia and Singapore)
National Infrastructure Public benefit Purposes that Planning and
UK
China
Mexico
Australia
Singapore
defence, development, or public the public
transport, conservation of interest
history or
Parliament purposes if it
water projects has the is suitable for,
culture, national
conservancy, security or power to and required
government public benefit define by for
agencies and projects, and legislation development
so on projects that
preserve the
ecological
balance and
natural
resources

26. Land Acquisition – Three Axes
Method of compensation
Process of Land Acquisition
Principle of Land Acquisition

27. Process of Land Acquisition
Forcible • Mostly used in public purpose projects and
procurement where the state don’t have enough option
• Implementable when the land is not
required for public purpose and if the
Procurement through developing agency has more than one
negotiation with option on which land parcel to acquire
stakeholders • negotiation often leads to an economically
efficient and socially optimal solutions
• Cases where land acquisition is critical and for public purpose, countries such as
Japan advocate the use of negotiation techniques in order to decide upon the
compensation to be provide to stakeholders
• In Singapore and Philippines first negotiations are carried out, if it fails then
compulsory acquisition is done

28. Land Acquisition – Three Axes
Method of compensation
Process of Land Acquisition
Principle of Land Acquisition

29. Land Valuation Methods
Evaluation of market value of the Evaluation of the net value of
land income from the land
Valuation
Methods
Determining original land use value Arriving at land values through
as set by the state negotiation

30. Land Valuation Methods
Evaluation of market value of the land Evaluation of the net value of income from the
• Malaysia, China, the US and India advocate land
following the comparable sales method •This method is used where market for land is not
• Sales data on comparable tracts of land may developed or is not reliable
not be available • The value of the property is taken to be the value of
• The registered value of the sale is kept the expected economic income that could be earned
artificially low for tax purposes through the ownership of the property
• An open, reliable, fair market environment • Tanzania is one country where this method is used,
might not be available primarily because the market is assumed to be
inefficient
Determining original land use value as Arriving at land values through negotiation
set by the state • Compensation is fixed purely on the basis of
• The Land Act of China does not permit free discussions with stakeholders
transfer of rural land, the original use of land • Peru follows a policy of compensation based
is used for compensation purposes with strictly on negotiation with the affected parties
valuation mechanisms set by the state • Singapore and Japan are other countries that
• Problem in defining “Original use”
endorse this approach
• Assumption is that agricultural use is the
highest and best use of all rural land but rural
land may have other more profitable uses,
such as residential, commercial or industrial
development

31. Issues in Indian Context
Very little meaningful negotiation is undertaken
The methods by which compensation is fixed are
subjective and suboptimal
No autonomy for officials to take independent
productive decisions
Delay in overall process leading to difficulty in many
other aspects
Corruption – The full compensations doesn’t reach
the beneficiaries and delay in payment

32. Recommendations
Acquire Surplus Land and Reallocate the Excess to Displaced People Post Development
• Combats the resentment due to increase in the value of the land post-acquisition and
development
• Allows land owners to benefit from increase in land values
• Example: Jaipur urban development and housing department
Distribute Stocks and/or Options of Development Venture to Landowners
• Includes displaced parties in the benefits accruing as a result of the venture
• Provides additional income over fixed compensation
• Example: Magarpatta City in Pune
• Pitfall- shares do not provide instant relief to project affected parties
Establish a Liberal, Competitive Framework to Reflect Market Realities
• Identifies potential parcels of land
• Negotiates with landowners to acquire some of these parcels
• If a landowners wishes to retain the landholdings, move to the next parcel
• Reduces transaction cost

33. Recommendations
Uttar Pradesh’s Pragmatic Move
• Government will act only as a facilitator if the developer is Private
• Compensation + annuity of Rs.23,000 for 33 years, the right to 16 per cent of the developed
land and shares in the project
• Also job schemes for members of dispossessed families
• Farmers have welcomed this policy
Issue Government Orders to Circumvent Bottlenecks in the Land Acquisition Process
• Imbibes public officials to sanction greater amount of compensation
• Streamlines a consultative and equitable land acquisition process
• Example: TNUDP projects in Tamil Nadu

34.  Land Acquisition Act, 1894
 Can Posco cross the Indian Border ?, Forbes India, August 10, 2011
 Bill for Land gives the true Value, The Hindu dated September 13, 2012
 Ashwin Mahalingam, Aditi Vyas(2011): “ Comparative Evaluation of Land Acquisition and
Compensation Processes across the World”, Economic & Political Weekly, August 6, 2011,
Vol XLVI Nos 32
 Morris, Pande (2007): “Towards Reform of Land Acquisition Framework in India”,
Economic & Political Weekly, June 2, 2007, pp 2083-90
 Desai, Mihir(2011): “Land Acquisition law and the Proposed Changes”, Economic &
Political Weekly, June 25, 2011, Vol XLVI, Nos 26 &27
 Levien, Michael(2011):”Rationalising dispossession: The Land Acquisition and
Resettlement Bills”, Economic & Political Weekly, March 12, 2011, Vol XLVI, No 11
 Sau, Ranjit(2007):”Second Industrialization in India: Land and the State”, Economic &
Political Weekly, February 17, 2007
 Taming the waters by Satyajit Singh
 http://www.indiawaterportal.org
 http://www.dnaindia.com
 http://en.wikipedia.org/wiki
 http://www.deccanherald.com

36. A Successful Case of Land Acquisition: TNUDP Phase III Project
Tamil Nadu Urban Development Phase III Project was funded by World Bank &
coordinated by CMDA & DOHRW – Construction of 5 roads
 Project needed to acquire 40.12 acres affecting 2073 people
Special
NO COURT CASES deputy
Acquisition Process collector
 Proper notification
 Base line survey
 Identification of affected people
 Issue of photo ID cards Local Negotiations Project
Representati implementat
Compensation ves committee ion Er.
 142-150% of land value
 Building allowance : 25% of land of lane value
 Subsistence allowance: 1800/month*6 months
Deputy Er.,
 Shifting allowance: 1000/person Highways of
 Replacements Sub projects
 Delayed Payments: 12% Interest rate on the due

37. World Bank Mandate:
Minimum of 150% of Compensation
 The project officials argued that the other projects were offered
lower compensation and it would be unfair to increase only for
this project
 The minimal value did not exceed beyond 150%
Price of land < true market value the property
Reason:
The Tendency of landowners to record lower value of their sale of lands to
save stamp duty
The question arises here is
Whether the true value to the owner was not provided due to the their lower record value ??
Yes but, the project-affected parties did not protest against the award since
the process of award was open and transparent, and due to the
apprehension that compensation awarded through the Land acquisition Act
would be lower and would take longer to arrive
The constitution of an independent negotiating committee, was helpful in solving
issues and providing compensation for indirect losses as well as delayed payments