New Land Acquisition Act 2013: Ensuring inclusive growth in India

D K Ojha

Ushering in of new land acquisition norms have opened up new vistas of growth. Its time that government and public sector entities put together their perspective development planning detailing their long-term strategies for future infrastruture growth.

Rapid industrialisation is critical for maintaining the growth of any economy. However, in recent times it has been observed that land acquisition has become a limiting factor in India’s industrialisation. Land Acquisition for major economic projects has shot to national attention lately capturing media space and invading the language of informed discourse. Hence, it became imperative that a new land acquisition act was ushered in in-order to streamline the land acquisition mechanism in India in a manner that balances the interests of affected families with the need of the infrastructure industry. In a country like India, the stakeholder management is a never ending task of balancing and integrating multiple relationships and multiple objectives. A strategy focussing on management of stakeholders is critical for the success of big infrastructure projects in India. It is important to understand concerns of stakeholders and come up with an innovative approach to resolve issues involving them.

It points out to the essentiality of inclusive growth model, that India cannot leave Bharat (Indian villagers) far behind without risking major conflict. To address historical injustice, the Act applies retrospectively to cases where no land acquisition award has been made.

Ever since its enactment, the “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 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 of India, 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 industrialise have put land acquisition at the heart of the debate in India. In view of above, it requires fresh application and interpretation in the light of the dynamic context of an emerging economy and a nation in transition.

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

This is the very first law in India, that links land acquisition and the accompanying obligations for resettlement and rehabilitation in to a single Act. It mandates a Social Impact Assessment (SIA) of the proposed acquisition by an independent body comprising the representatives from Gram Sabha (village council), Panchayats (Local level self-government) and Municipal Corporations and will carry out the assessment on the suitability of the purpose, minimal acquisition, families to be displaced etc. within six months of its commencement.

For projects undertaken by private companies or through public-private partnerships, the Act requires the consent of 80 per cent of the affected people, which will put a check on forcible acquisitions. The Act guarantees higher compensation to the land losers and adopts the market value method to compute compensation. 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. Central to this Act is the identification of the public policy and the role of the executive, industry, judiciary and civil society in achieving the fine balance between equity and efficiency in infrastructure development in India. In the soul of the new Act are fair compensation, thorough resettlement and rehabilitation of those affected, adequate safeguards for their well-being and complete transparency in the process of land acquisition.

Given the inaccurate nature of circle rates, the Act provides the payment of compensations that are up to four times the market value in rural areas and twice the market value in urban areas and thereby rule out problems of unwarranted claims and issues of inadequate compensation. It points out to the essentiality of inclusive growth model, that India cannot leave Bharat (Indian villagers) far behind without risking major conflict. To address historical injustice, the Act 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.

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. In case land remains unutilised after acquisition, the new Act empowers states to return the land either to the owner or to the state land bank. Where the acquired land is sold to a third party for a higher price, 40 per cent of the appreciated land value (or profit) will be shared with the original owners.


A comprehensive, participative, inclusive and meaningful process has been put in place under new land acquisition Act prior to the start of any acquisition proceeding. 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 in India. 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 Project Implementing Authorities must reformulate their policies regarding need of land for their upcoming projects. Optimal use of land should become a top priority and the process for land acquisition and rehabilitation and resettlement needs to start much earlier. This would lead to balanced and inclusive growth of social, political, economical and infrastructure development by better stakeholder’s participation. Governments and the Public Sector Enterprises need to put in place the perspective development planning that details their long term strategies by fixing milestones and timeframes for accomplishing goals in respect to their anticipated land requirements for future infrastructure growth of India.

D K Ojha is Director (IPMD), Ministry of Statistics and Programme Implementation.
The views expressed here are solely those of the author in his private capacity and do not in any way represent the views of Ministry of Statistics and Programme Implementation or any other entity of Government of India.

(The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of INCLUSION. Comments are welcome at

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