Land Acquisition

Nearly 35% of all issues raised under 50th PRAGATI Meet relate to land acquisition, making it the single largest cause of project delays.

Land Acquisition 

• Land acquisition refers to the process by which the government acquires privately owned land for a “public purpose” under statutory authority, with payment of compensation and provision of rehabilitation and resettlement.
• Public Purpose under LARR Act, 2013 includes:
  • Infrastructure projects (roads, railways, irrigation, ports)
  • Defence and national security projects
  • Housing and social infrastructure
  • Industrial corridors and government-controlled projects

Legal Framework for Land Acquisition in India

• Pre 2013-  Land Acquisition Act, 1894:
  • The Land Acquisition Act, 1894 empowered the State to acquire land with minimal compensation and without consent, which led to widespread displacement and social unrest in post-independence India.
• Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (LARR Act)
  • The Act replaced the colonial-era Land Acquisition Act of 1894.
  • It aimed to make the acquisition process more humane, transparent, and participatory.
  • Key Features of the LARR Act
    • Mandatory Social Impact Assessment (SIA)
    • Consent requirements for private sector and PPP projects
    • Compensation linked to prevailing market value
    • Higher compensation multipliers in rural areas
    • Statutory provisions for rehabilitation and resettlement (R&R)

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Why Land Acquisition Remains the Biggest Source of Delays in Large Infrastructure Projects?

• Fragmented Land Ownership and Unclear Titles: Land ownership in India is highly fragmented, and land records often suffer from outdated entries and unclear titles, which makes the identification of legitimate owners time-consuming and litigation-prone.
• Livelihood Dependence on Land: Land in India is not merely a productive asset but the primary source of livelihood for farmers, tribals, and informal workers, which leads to strong resistance when acquisition threatens economic security.
• Trust Deficit Between the State and Local Communities: Historical misuse of land acquisition laws for private and corporate interests has created a trust deficit, resulting in protests, social movements, and political mobilisation against infrastructure projects.
• Federal Nature of Land Governance: Land is a State subject under the Seventh Schedule, and large infrastructure projects require coordination between the Centre and States, often leading to delays due to differing political priorities and administrative capacities.
• Judicial Scrutiny and Legal Challenges: Courts in India closely examine procedural compliance, public purpose, and rehabilitation measures, and even minor lapses in the acquisition process frequently result in stay orders.
• Mandatory Social Impact Assessment (SIA): The Act mandates a Social Impact Assessment to evaluate economic, social, and cultural impacts, which improves transparency but significantly extends project timelines.
• Consent Requirements for PPP and Private Projects: The requirement of obtaining consent from 70% of affected families in PPP projects and 80% in private projects often delays acquisitions due to collective bargaining and local opposition.
• Increased Fiscal Burden Due to Higher Compensation: The provision of compensation up to four times the market value in rural areas increases financial stress on State governments, slowing project approvals and execution.

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