By: Ravi Sinha
Track2Realty Exclusive: Not that Hitender Tyagi of Noida was a prosperous landlord, yet he felt like the one with his small piece of 12 acre of agricultural land. Today this ailing farmer feels like a pauper who was forced to do away with his source of bread and butter as his land was forcibly acquired by the Noida Authority.
The compensation was too meagre to give him any long-term financial security. With no other option of future livelihood this 58-year-old man soon realised that he is too old for any other job. As a result, the compensation money was soon spent and the family went broke.
“My son bought a car with the compensation given to me and is now working as a driver. My daughter-in-law works as a domestic help in the nearby apartment where till yesterday I had my right over the land. It makes me cry my heart out but I am not alone to suffer this kind of cruel injustice by the government. Now when I am told about the new law coming that can make any farmer lose his right over the land as and when rich people want it and the government being a party to it, I feel a collective suicide is better for us than to see our children working as servants on our very own land,” says a dejected Tyagi.
Contentious issue
Land acquisition in India has always been a contentious issue and the urban planners for long were calling for a need to amend the Land Acquisition Act of 1894. Following some violent protests and legal logjam post the land acquisition in many parts of the country, the government in 2007 and 2011 tried to address the issue but could finally came up with the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act in 2013 that laid down the process for land acquisition that removed the urgency clause on part of the State and prescribed Social Impact Assessment Survey, Preliminary Notification stating the Intent for Acquisition, a Declaration of Acquisition and Compensation to be Given by a Certain Time. All acquisitions required rehabilitation and resettlement to be provided to the people affected by the acquisition.
However, the industry in general and real estate in particular termed the 2o013 Act unreasonable that could make land acquisition a very cumbersome process for the industry. The grouse was that it was proving to be a major bottleneck for reviving infrastructure development and green field investment.
The BJP Government in December, 2014 hence amended Section 10(A) of the Act to expand sectors where assessment and consent was not required. For five sectors, the consent clause was removed. Now the government or the private developers no longer needed mandatory consent of 80 per cent of land owners for acquiring land in those five sectors. The mandatory ‘Consent’ clause and ‘Social Impact Assessment’ was not to be applicable if the land was acquired for national security, defence, rural infrastructure including electrification, industrial corridors and affordable housing including PPP where ownership of land continues to be vested with the government.
Industry welcomes amendments
As expected, the industry and real estate sector cheered the new provisions. Analysts within the built environment even expressed that the dream of ‘Make in India’ could become reality only with enabling provisions for industrial corridors and defence purposes. The sector even welcomed the Ordinance ‘way to go’ for the feasibility of government’s ambitious plan of ‘Housing for All by 2022’. There was a general feeling that exempting industrial corridors from the consent clause would boost the commercial activity as well along such corridors.
Anshuman Magazine, CMD of CBRE South Asia maintains that the amendments will have a positive impact on the infrastructure and real estate sector. Feeling hopeful of the new norms to ease off the inordinate delays seen so far in the land acquisition process for large scale infrastructure and affordable housing projects, he says the infra industry, in particular, is expected to gain much from these new changes, as will housing for the poor.
“I hope this is just the first steps in amending the Land Acquisition Act, as much more amendments are required to ease land acquisition procedures in India. It could perhaps bring in more segments of organised real estate within the ambit of such faster processing norms, which would be beneficial for construction activity across the country,” says Magazine.
Niranjan Hiranandani, CMD, Hiranandani Group says the Indian Government has taken a welcome step on the issue of land acquisition norms, having approved certain amendments in the land acquisition. These seek to fast-track the purchase process of land, while bringing more projects under the provisions of rehabilitation and compensation of land owners.
“While the amendment has the potential to give a boost to affordable housing, it will also facilitate a scenario where infrastructure projects will be fast-tracked. For ‘Affordable Housing’ to become a reality, it will need time bound land acquisition and creation of infrastructure, which the amendment will facilitate. What is most important is that the amendment does not impact the compensation to farmers, while it ensures time-bound acquisition, it remains ‘Socially Correct’ while also being ‘Business Friendly’,” says Niranjan Hiranandani.
Welcoming the Ordinance Rohit Raj Modi, President, CREDAI NCR says it is expected to boost much needed infrastructure development and housing construction in the country. This shows a serious commitment from the government towards bolstering economic reforms.
“The likely changes in the Act that includes removal of consent clause for land acquisition for affordable housing, rural infrastructure and industrial corridors would prove to be a game changer. The Act is likely to benefit affordable housing segment the most and would help achieve the government’s ambitious plan of ‘Housing for all by 2022’”, says Modi
Home buyers not impressed
Such optimism of the real estate developers, however, fails to impress the home buyers either who feel the free-for-all land acquisition law would only help the developers. Sandeep Acharya, a home buyer from New Chandigarh points out that the government may be giving a feeler that more compensation & rehabilitation offered to the farmers would escalate the home prices, it is not well founded. He reminds how in several cases the financial burden on the developers post the additional compensation to farmers due to judicial intervention was nullified with extra FSI/FAR granted to the developers.
“Even when the developers were given extra FSI/FAR to compensate their business profitability after the court order to grant additional money to the farmers, the developers still raised the cost of the flat. I feel this fair justice and compensation to farmers is an alibi not for the home buyers’ interests but to safeguard the interests of the big industries who want cheap land,” says Acharya.
As per rough estimates, restrictions on buying land are among the barriers holding up projects worth almost US$ 300 billion in various sectors. However, before the issue of whether the amendment and the Ordinance would kick-start hundreds of billions of dollars in stalled projects could be answered, the government found itself in tough waters as there is a growing discontent across the country over the ordinance and the debate has spilled over from Parliament to the streets with various political parties, pressure groups, farmers and activists taking to streets against what they call a draconian law to snatch the farmers’ land.
Under pressure from opposition, civil society and even within the ruling alliance, the government is now giving feelers that it is ready to consider suggestions on the Land Acquisition Bill, but there hardly seems to be any consensus emerging to address the issue with the consent of all the stake holders, including the farmers, industries, developers, socio-political groups and home buyers.
Major differences between 2013 Act & 2014 Ordinance
- Exclusion of SIA in RFCTLARR Act: As per the 2013 Act Social Impact Assessment (SIA) was part of the Right to Fair Compensation and Transparency in Land Acquisition Rehabilitation and Resettlement but the new law does not make SIA mandatory.
- Removal of consent clause in five areas: The Ordinance removes the consent clause for acquiring land for five areas – industrial corridors, public private partnership projects, rural infrastructure, affordable housing and defence. Nearly all government acquisitions happen under these 5 clauses.
- Irrigated multi-cropped land: Now there is no limit to acquire irrigated multi-cropped land and other agricultural land, which earlier could not be acquired beyond a certain limit.
- Return of unutilised land: As per the Act 2013, if the land remains unutilised for five years, then it needs to be returned to the owner. But according to the Ordinance the period after which unutilised land needs to be returned will be five years, or any period specified at the time of setting up the project, whichever is later.
- Word ‘private company’ replaced with ‘private entity’: While the Act 2013 says that the land can be acquired for private companies, the Ordinance replaced it with private entity. A private entity is an entity other than a government entity, and could include a proprietorship, partnership, company, corporation, non-profit organisation, or other entity under any other law.
- Offence by government officials: As per the Ordinance if an offence is committed by a government official or the head of the department, then one cannot be prosecuted without the prior sanction of the government.
