Land Acquisition in India 10-June-2010

Background on land acquisition in India Very limited unused land in India. Most of India's population is dependent on land for their livelihood and do not have skills to work in other areas of the economy. (72% of Indians live in rural areas). Land acquisition act,1894 o Was initially brought about to acquire land for public purpose. o Includes entire India, except for Jammu and Kashmir o Both central and state governments can legislate on matter relating to land acquisition. o 1962 amendment allows the government to acquire land for commercial purpose. State may acquire and deliver land to private industries for industrial & infrastructural projects.

Land acquisition in India (continued) Definition of public purpose is too vague. o Sufficient for state to declare that the land is being acquired for "public purpose". o Acquisition for public purpose - Companies are not required to use market route to acquire land. Land Records - o Governed by registration act of  Act serves as a public record of transactions.  Registrar's office is not required to check authenticity of title. Registrar does not have access to land records or maps to do so.  As a result, outdated and inaccurate records leads to litigation. 

Land acquisition in India (continued) Transaction costs o Stamp duty (tax 9 -10% of land value). o Results in under reporting on transaction values. o Results in problems with determining land value. Non agricultural use clearance (NAC) o Used to reclassify agricultural land as non-agricultural land. o Purpose of act was to benefit farmer who wished to use his land for non-agricultural purpose, such as building a home etc. o What happens (sometimes): State acquires land for industrial projects. Farmer is compensated for value of agricultural land. NAC is issued and the land value increases substantially.

Land acquisition in India (Continued) o It is possible that entrepreneur is motivated to bid for project to acquire land rather than to see the infrastructure project through. o Discuss: How should NAC work? How to access fair market value of land? Process related to land acquisition o Discretionary powers available to state governments - Scope for delay in land acquisition. o Procedure for acquisition of land for private sector is more cumbersome than that for public sector. National policy of resettlement and rehabilitation for project affected families o Problems - Not enough community participation in projects o Does not provide equitable benefit sharing between

Land acquisition in India (Continued) displaced community and project owners. o recognizes only land ownership rights and not land o usage rights. o livelihood dependent on land that they do not own - grazing, gathering grass. o Rights of land squatters ???