1. Land Acquisition Market Structure and Regulation of Infrastructure Sector MBA II Year Elective Ist Term 2010-11 Dr. A. B. Rastogi NMIMS

2. Land – A Critical Resource for Infrastructure

3. Slide 3 ABR Class ppt-MSRIS-Land Acq 13-2010-11 Cause of Infrastructure Project Delays 70% of 190 delayed projects ( Mint 18 th March 2009 ) IR – 60 projects NHAI – 40 projects Power projects – 28 projects CII survey 81% respondents – land acquisition is the most important impediment Land Limited supply Eminent domain powers –The state can acquire land for public purposes without the landholders’ consent Urban land constraints – Plagued by numerous regulations

4. Slide 4 ABR Class ppt-MSRIS-Land Acq 13-2010-11 Land Markets in India Characteristics of land –Unique physical features of each piece –Absence of mobility –Widespread emotional attachment Needs appropriate legal and regulatory framework –So far, limited to computerization of revenue records –Improvement of registration records and proccesses Reforms required in land registration, record keeping and land rights

5. Slide 5 ABR Class ppt-MSRIS-Land Acq 13-2010-11 Land Acquisition : Policy and Processes Land Acquisition Act 1894 –To acquire land for public purposes Amended in 1962 to allow acquisition for companies Public purpose is not well defined Impact on PAPs Post 1991 worsened as govt. acquired land for the private sector –Eminent domain vs undermining of private property rights Land Acquisition in concurrent list –Many states have their own procedural laws –NHs have separate law

6. Slide 6 ABR Class ppt-MSRIS-Land Acq 13-2010-11 Compensation and R&R Compensation for –the loss of land and associated assets –loss of livelihoods of PAPs –expeditious settlement of the rehabilitation process LAA 1894 is silent on R&R National Policy of Rehabilitation and Resettlement 2007

7. Slide 7 ABR Class ppt-MSRIS-Land Acq 13-2010-11 The Land Acquisition (Amendment) Bill 2007 Redefines ‘public purpose’ –Only strategic defence purposes, infrastructure and contiguity purposes included >70% for a publically useful project is included ‘Person’ includes any company, body or association of individuals The bill was introduced in the parliament in February 2009, but failed

8. Slide 8 ABR Class ppt-MSRIS-Land Acq 13-2010-11 Land Acquisition Experiences Main issue –diversion of forest land for developmental activities –Land-for-land is a contentious issue Experience of DIAL –GMR provided assistance for transportation facilities and jobs –Group’s CSR arm played a key role provided medical facilities and basic amenities

9. Slide 9 ABR Class ppt-MSRIS-Land Acq 13-2010-11 Land Acquisition in Urban Planning Supply constrained due to excessive regulatory requirements –gave enormous power to state to intervene in urban land market –cause of haphazard sprawl –opportunity for rent seeking Urban Land (Ceiling and Regulation) Act 1976 and Rent Control Act reforms (JNNURM) –Gujarat model – Development Plan – Town Planning Scheme (DP-TP mechanism) http://www.gisdevelopment.net/application/urban/products/mi03215b.htm http://www.gisdevelopment.net/application/urban/products/mi03215b.htm

10. Slide 10 ABR Class ppt-MSRIS-Land Acq 13-2010-11 Leveraging Land for Development Betterment levy Impact fee Experience of IRs –1/4 th of 4.3 lakh hectares land owned by railways is lying vacant –RLDA – afforestation etc…. Experience of China Experience of HK

11. Land Acquisition for NHs Legal framework Reasons for delay Role of PIU/ Project Managers

12. Slide 12 ABR Class ppt-MSRIS-Land Acq 13-2010-11 Characteristics of Highway Projects Linear land acquisition, displacement Cuts community, land and property Involves multiple States and agencies Displaces squatters Affected groups heterogeneous –Vendors, shopkeepers most affected –Agricultural PAPs partially impacted (especially in widening or rehab work) Strong positive association

13. Slide 13 ABR Class ppt-MSRIS-Land Acq 13-2010-11 Land Acquisition- Legal Framework Governed by NH Act, 1956 Key steps as per NH Act, 1956 –Preliminary survey to identify land –Notification- Intention to acquire land –Appointment of competent authority –Receipt and hearing of objections –Compensation determination –Payment

14. Slide 14 ABR Class ppt-MSRIS-Land Acq 13-2010-11 Land Acquisition- Timeframe About 12-18 months Delays depending on –State of land records –Analysis of alternatives –Competent authority (CA) support –Land disputes –Land consolidation –Pace of civil courts settling disputes –Complex disbursement procedures –Arbitration process

15. Slide 15 ABR Class ppt-MSRIS-Land Acq 13-2010-11 Role of PIU/ Project Managers Collaborate with DPR consultants Draft notifications as per NH Act Coordinate with various authorities Submit monthly acquisition data in format Report status to HQ Ensure settlement of compensation claims and declaration of award Complete mutation Facilitate private negotiations

16. Slide 16 ABR Class ppt-MSRIS-Land Acq 13-2010-11 What to consider? All alternatives at feasibility stage Land, R&R requirement for each alternative Match of acquisition plan with ground reality Appointment of arbitrators Challenging arbitrator awards, if needed Extra land acquisition to return later?

17. Slide 17 ABR Class ppt-MSRIS-Land Acq 13-2010-11 Thank you

18. Slide 18 ABR Class ppt-MSRIS-Land Acq 13-2010-11 Avoid political grandstanding We Need a Humane Land Acquisition Act The Economic times (10-Aug-09) FINANCE minister Pranab Mukherjee was justified in charging UPA ally, Trinamool Congress (TC), with political grandstanding as the latter needlessly went to the media seeking more safeguards in the amendment to the Land Acquisition Act that the government had sought to introduce in Parliament last week. In competitive politics, leaders often speak to each other through the media. However, on this occasion, the Congress leaders had conceded

19. Slide 19 ABR Class ppt-MSRIS-Land Acq 13-2010-11 Avoid political grandstanding (cont..) that further amendments could be effected once the Bill was introduced and referred to a Standing Committee of Parliament. TC should have accepted this reasonable offer. But it chose to create some political drama by insisting the Bill should not be introduced at all before certain amendments were made. The Bill had gone through a lot of discussion in UPA’s previous tenure and was introduced in the last Lok Sabha. The Bill has to be reintroduced in

20. Slide 20 ABR Class ppt-MSRIS-Land Acq 13-2010-11 Avoid political grandstanding (cont..) the current Lok Sabha as it could not be passed in the previous one. The resettlement and rehabilitation legislation is also being introduced simultaneously with the land acquisition Bill. The TC wants major amendments in the land acquisition Bill. It wants a fresh provision enabling the land owners to have a legal right to buy back their land if the proposed industry does not take off within a stipulated period of time. It says there should be no government

21. Slide 21 ABR Class ppt-MSRIS-Land Acq 13-2010-11 Avoid political grandstanding (cont..) involvement in land acquisition. The current Bill allows the government to acquire up to 30% of the land to enable contiguity. Mamata Banerjee also wants no industry to be allowed in fertile agriculture land. If all these amendments are taken together, no acquisition will be possible. It would be impossible to acquire land with no government involvement at all. The bulk of the land acquisition can be through direct negotiation with the farmers. But some

22. Slide 22 ABR Class ppt-MSRIS-Land Acq 13-2010-11 Avoid political grandstanding (cont..) government role will be necessary to deal with contiguity issues. Also, a proposed industry may get delayed for reasons beyond the promoter’s control. In that event, is it practical to legally mandate return of the land to the farmers At the political level, these amendments will now be discussed with Congress president Sonia Gandhi. We need a humane land acquisition Act which does not throw the baby out with the bath water.