LA Act 1894 & LA and RR Act 2013
- A Comparative Analysis
Rapid industrialization is critical for maintaining the growth of our economy. However, in recent time it has been observed that land acquisition has become a limiting factor in India’s industrialization. Hence, it had become imperative that a new land acquisition act was ushered in in-order to streamline the land acquisition mechanism in the country in a manner that balances the interests of affected families with the need of the Infrastructure Industry.

Land Acquisition Act, 1894
Ever since its enactment, the ”Land Acquisition Act, 1894” has been subject to controversies and fierce debate. Notwithstanding rounds of amendments, including the 1984 changes, it has failed to address some important issues associated with land acquisition particularly forcible acquisitions, definition of "public purpose" , widespread misuse the of "urgency clause", compensation, lack of transparency in the acquisition process, participation of communities whose land is being acquired and virtually no rehabilitation and resettlement package. Further weak implementation and ineffective administration at the ground level has increased the suffering and anguish of the people. Due to a lack of clear definition of "public purpose", there has been considerable difference of opinion among various judgments of the Supreme Court, finally resulting into granting very broad discretionary powers to the State in terms of deciding the contours of "public purpose" under particular circumstances. All these factors coupled with the urgent need to industrialize have put land acquisition at the heart of the debate in India.
The need for a new Act
The Land Acuisition Act 1894 has proved to be deficient in many respects. Some of shortcoming of the LA Act 1894 includes:
• Forced acquisitions: Under the 1894 legislation once the acquiring authority has formed the intention to acquire a particular plot of land, it can carry out the acquisition regardless of how the person whose land is sought to be acquired is affected.
• No safeguards: There is no real appeal mechanism to stop the process of the acquisition. A hearing (under section 5A) is prescribed but this is not a discussion or negotiation. The views expressed are not required to be taken on board by the officer conducting the hearing.
• Silent on resettlement and rehabilitation of those displaced: There are absolutely no provisions in the 1894 law relating to the resettlement and rehabilitation of those displaced by the acquisition.
• Urgency clause: The clause never truly defines what constitutes an urgent need and leaves it to the discretion of the acquiring authority. As a result almost all acquisitions under the Act invoke the urgency clause. These results in the complete dispossession of the land without even the token satisfaction of the processes listed under the Act.
• Low rates of compensation: The rates paid for the land acquired are the prevailing circle rates in the area which are notorious for being outdated and hence not even remotely indicative of the actual rates prevailing in the area.
• Litigation: Even where acquisition has been carried out the same has been challenged in litigations on the grounds mentioned above. This results in the stalling of legitimate infrastructure projects.

Despite being amended from time to time the Land Acquisition Act, 1894 had outlived its utility. It was in this background that the Government enacted a new law for land acquisition namely “Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013”.

Right to fair compensation and transparency in land acquisition, rehabilitation and resettlement Act 2013
The “right to fair compensation and transparency in land acquisition, rehabilitation and resettlement Act 2013” has introduced a number of changes over and above the existing 1894 law on land acquisition. As the acquisition and rehabilitation & resettlement are interrelated - acquisition, compensation, rehabilitation and resettlement has been combined into one single Act. It mandates a Social Impact Assessment (SIA) of the proposed acquisition by an independent body for all acquisitions. For projects undertaken by private companies or through public-private partnerships, the Act requires the consent of 80% of the affected people which will put a check on forcible acquisitions. It guarantees higher compensation to the land losers and adopts the market value method to compute compensation. The possibility of abuse of the "urgency clause" has been considerably reduced by limiting its application to the requirement "for the defence of India or national security or for any emergencies arising out of natural calamities." The claim for compensation of "affected family" has been endorsed by providing a broad definition to the term which includes sharecroppers, agricultural labourers, tenants whose primary source of livelihood stands affected. The Act also recognizes the role of self-government institutions and Gram Sabhas and provides for consultation with the same at the time of preparing the SIA and at the time of issuing the preliminary notification for acquisition.
The title of the old law conveyed that its primary purpose was to expedite the acquisition of land. However, the principle objective of the new Act is fair compensation, thorough resettlement and rehabilitation of those affected, adequate safeguards for their well-being and complete transparency in the process of land acquisition. The title has been amended to reflect this.
Scope of the New Law
LA and R&R Provisions of the new Law is application 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 * Government acquires land for Public Private Partnership

Salient features of the new law
• Compensation: Given the inaccurate nature of circle rates, the Bill proposes the payment of compensations that are up to four times the market value in rural areas and twice the market value in urban areas.
• R&R: This is the very first law that links land acquisition and the accompanying obligations for resettlement and rehabilitation. It clearly outlines the benefits (such as land for land, housing, employment and annuities) that shall accrue in addition to the one-time cash payments.
• Retrospective operation: To address historical injustice the Bill applies retrospectively to cases where no land acquisition award has been made. Also in cases where the land was acquired five years ago but no compensation has been paid or no possession has taken place then the land acquisition process will be started afresh in accordance with the provisions of this act.
• Multiple checks and balances: A ‘comprehensive, participative and meaningful’ process (involving the participation of local Panchayati Raj institutions) has been put in place prior to the start of any acquisition proceeding. Monitoring committees at the national and state levels to ensure that R&R obligations are met have also been established.
• Special safeguards for tribal communities and other disadvantaged groups: No land can be acquired in scheduled areas without the consent of the Gram Sabhas. The law also ensures that all rights guaranteed under such legislation as the Panchayat (Extension to Scheduled Areas) Act 1996 and the Forest Rights Act 2006 are taken care of. It has special enhanced benefits for those belonging to Scheduled Castes and Scheduled Tribes.
• Safeguards against displacement: The law provides that no one shall be dispossessed until and unless all payments are made and alternative sites for the resettlement and rehabilitation have been prepared. It also lists the infrastructural amenities that have to be provided to those that have been displaced.
• Compensation for livelihood losers: In addition to those losing land, the Act provides compensation to those who are dependent on the land being acquired for their livelihood.
• Consent: In cases where PPP projects are involved or acquisition is taking place for private companies, the Act requires the consent of no less than 70% and 80% respectively (in both cases) of those whose land is sought to be acquired. This ensures that no forcible acquisition can take place.
• Caps on acquisition of multi-crop and agricultural land: To safeguard food security and to prevent arbitrary acquisition, the Act directs states to impose limits on the area under agricultural cultivation that can be acquired.
• Return of unutilized land: In case land remains unutilized after acquisition, the new Act empowers states to return the land either to the owner or to the State Land Bank.
• Exemption from income tax and stamp duty: No income tax shall be levied and no stamp duty shall be charged on any amount that accrues to an individual as a result of the provisions of the new law.
• Share in appreciated land value: Where the acquired land is sold to a third party for a higher price, 40% of the appreciated land value (or profit) will be shared with the original owners.
Major Distinctions Issue | 1894 Act | New Act | Public Purpose | lack of clear definition | Streamlined and well-defined in-order to remove ambiguities | Urgency Clause | No clear definition | Restricted to –1. National defense and security purposes2. Resettlement & Rehabilitation needs in the event of natural calamities such as floods orearthquakes | Consent of Affected People | No Requirement | Consent of 80% of displaced people required in case of acquisition for private companies and 70% in case of public-private companies. | SIA | No Provision | SIA has to be undertaken in case of every acquisition | Compensation | Based on the market value | Market value doubled in rural areas and not in urban areas | Market Value | Based on the current use of land. Explicitly prohibits using the intended use of land while computing market value. | Higher of (a) value specified for stamp duty, and (b) average of the top 50% by recorded price of sale of land in the vicinity. | Solatium | 30% | 100% | Resale of land | No provision | Prior permission of the Government required. | R&R | No provision of R&R | R&R necessary for all affected families. Minimum R&R entitlements to be provided to each affected family specified. |

Conclusion
The new land acquisition Act takes care of the various shortcomings and anomalies present in the Land Acquisition Act of 1894 from the point of view of the people who own the land or whose livelihood is dependent on it. However, the impact of the new Act on the Industry and economy as a whole also needs to be taken into account. Based on the propositions of required quantum of consent and Social Impact Assessment, it can be inferred that the process of land acquisition under the new law will be much slower. Further, because of propositions of R&R, higher rates and compensation even for livelihood losers land acquisition is set to become much more expensive. Thus the financial viability of the projects is likely to be affected due to anticipated delays and substantial rise in the cost of the land. In light of this, the PSUs in need of land for their upcoming projects, must reformulate their policies. Optimal use of land should become a top priority and the process for land acquisition needs to start much earlier. PSUs need to put in place perspective plan that details their long term strategies by fixing milestones and timeframes for accomplishing goals in respect to their anticipated land requirements for future growth.