The Proposed Land Acquisition Bill: Putting livelihoods first | Eminent Domain

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This paper provides a coherent policy response to the tough social questions raised by compulsory land acquisition in India. With conflicts escalating and governments failing to enact a law protecting the livelihoods of affected people, the proposed Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Bill 2011 is a major step forward. This paper identifies some of the loopholes in the Bill which need to be addressed in order to respond adequately to the sensitive nature of India’s land situation. The Bill as it stands can make conflict more intractable by covering unchanged practices in a new law.
  Oxfam India Policy Brief  Demanding Rights for All Summary The proposed Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Bill sets out to reconcile two agendas that have so far clashed: 1  it aims to secure the land requirements of the government’s development agenda, while addressing the mounting resistance of people whose land is acquired. The bill is a major step forward because it links land acquisition with rehabilitation and resettlement (R&R). By doing so, it brings to the forefront questions that have long since been at the heart of con fl icts around land acquisition: When can the government legitimately exercise its powers of ‘eminent domain’, that is to forcibly acquire land in exchange for compensation of previous owners and users? 2  In other words, how narrowly should the notion of public purpose be de fi ned? How should compensation and R&R procedures be designed to counter the negative impacts on displaced people? These questions are arguably harder to answer in India than in most other countries. Land is both scarce and unequally distributed. Fragmentation of small plots has prevailed over redistribution of larger ones, pushing an increasing number of households into landlessness.  Alternative opportunities rarely exist for farmers who lack the skills required for other avenues of income generation. These systemic constraints result in dysfunctional and opaque land-markets, where sales are few and often unreported.While the draft bill is an important step forward, it falls short of expectations in some crucial aspects: it opens the door to abuses by adopting an excessively broad de fi nition of public purpose, and its progressive safeguard clause needs to be strengthened. Oxfam India urges policymakers to address these weaknesses by adopting the following recommendations: Recommendations  Compulsory land acquisition should be limited to a few strictly-de fi ned government purposes. For private projects, the government’s role should be to regulate purchases. Social safeguards should be strengthened by giving binding powers to the expert committee’s recommendations. Provisions for R&R should be revised to ensure that people’s livelihoods are restored. Special laws that regulate a broad range of acquisition should effectively be aligned with the proposed bill.Beyond these aspects, the draft bill raises a number of questions. Given the complexity of the issue, much-needed public debates risk focusing on secondary issues, while letting some of the crucial and more problematic aspects unquestioned. Two such aspects are: What should the respective roles of centre and state governments be in de fi ning compensation norms? How can civil society be ef  fi cient in holding the government accountable? No. 2, October 2012 The proposed Land Acquisition Bill Putting Livelihoods First  A coherent policy response to the tough social questions raised by compulsory land acquisition is long overdue. Con fl  icts have escalated, while successive governments failed to enact a law protecting the livelihoods of affected people. The proposed Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Bill 2011 is a major step forward in this regard. However, a number of loopholes in the bill need to be addressed. Otherwise, it will not respond adequately to the sensitive nature of India’s land situation and instead, make the con fl  ict more intractable by covering unchanged practices under a new law.  Oxfam India   Policy Brief   No. 2 | October 2012 Context The government does not keep of  fi cial fi gures on how much land was acquired, and how many people were displaced as a consequence, but the most reliable estimates suggest that about 60 million people were displaced between 1947 and 2004. 3  The overwhelming majority of acquisitions has historically been carried out by the government for its own uses. However, the policy of economic liberalisation is progressively changing this picture: many public enterprises have been partially or entirely privatised, and the emphasis on PPP advocated in the 12th Five Year Plan further blurs the distinction between public and private interests. Acquisitions, often carried out without proper compensation and R&R measures, have been met with growing resistance. Struggles such as those of the Narmada Bachao Andolan in Gujarat nearly thirty years ago, of Nandigram and Singur in West Bengal or Greater Noida in Uttar Pradesh have drawn public attention to the claims of those affected. The case of Singur, where the Left Front had intended to expropriate 1000 acres of land for a Tata car production site, exempli fi es this trend. The con fl ict acquired political tone after courts failed to settle the issue. In fact, the Trinamool Congress’s promise to reverse the land acquisition in Singur was one of the factors that led to its victory in the state elections. 4 The growing con fl ict around land acquisition takes place in a context where demographic and economic pressure on land has increased tremendously. Sizes of landholdings in rural India are amongst the smallest in the world, with averages as low as 0.57 acres in Kerala and less than 10 acres in states such as Punjab, where land properties are large by Indian standards. Landholdings are smaller in countries like China (0.5 acres) and Bangladesh (0.6), but India’s average remains amongst the lowest if compared to regions like Europe (32.3), South America (111.7) and the US (178.4). 5  Inequality in land distribution is huge and rapidly increasing: the GINI coef  fi cient of landholding sizes is as high as 0.7 according to conservative estimates; 6  in comparison, GINI coef  fi cients for consumption and income indicate a more equal distribution at 0.32 and 0.53 respectively. 7 Demographic growth and low urbanisation rates further fragment landholdings: mere or complete landlessness is estimated to have increased by as much as 6 per cent between 1992 and 2003. 8  To complicate matters, there is no ready alternative to the land-dependant livelihoods of most rural inhabitants: economic opportunities are limited across rural India, and even where new projects generate alternative sources of income, local populations generally lack the required skills. This complex pressure on land results in dysfunctional land-markets, where voluntary land sales are few and reported transactions are generally under-valued to avoid taxation. The underlying systems of ownership also vary widely from region to region: while land rights are reasonably formalised in certain areas, customary rights are often not recognised of  fi cially, notably in many Scheduled Areas where forest dwellers are yet to be awarded land titles under the Forest Rights Act. History of the Bill The draft bill will replace the colonial-era 1894 Land  Acquisition Act. Amendments by successive governments did not address the controversial aspects of the Act, despite decade-long civil society calls for adequate R&R measures; instead, governments pursued land acquisitions without addressing tough social issues resulting from forced displacement. Never before had any central law guaranteed R&R in cases of compulsory land acquisition: a number of state governments had introduced R&R policies in response to increasing resistance, but a single legal framework is still missing. In the late eighties, the Narmada Bachao Andolan opened discussions around a coherent R&R policy. This was followed by a number of propositions, by both civil society organisations and successive governments. However, none of them were made into law. Finally, in 2011, the National Advisory Council (NAC) called for a law linking land acquisition and R&R. The Ministry of Rural Development prepared a draft bill, and opened a short window for comments before referring the draft to a Standing Committee. The latter proceeded with thorough public consultations. Its report highlights major weaknesses in the bill. These include the broad de fi nition of public purpose; the limited scope of the bill given the fact that a majority of compulsory land acquisitions fall under special laws; the centralised de fi nition of compensations and rehabilitation packages. 9  Despite these weaknesses, the bill is a meaningful step forward: it provides for safeguards against acquisitions whose impact on people and food security are deemed unacceptable; it establishes the precedence of special laws for Scheduled Areas, such as the Forest Right Act (FRA) and the Panchayat Extension to Scheduled Areas  Act (PESA); it entitles all affected people to a diversi fi ed R&R package and sets generous standards to calculate compensations for landholders. 10  The range of positions that have been taken on the bill re fl ects the complexity of the issue it addresses. Defenders of a broad de fi nition of public purpose justify government acquisitions for private use on grounds of long-term economic development: in the absence of a functioning market, government facilitation is required to unlock these opportunities. However, others within the corporate sector fear the hurdles caused by government interventions and prefer to rely on markets. Most civil society organisations agree on the need to de fi ne public purpose narrowly: potential economic bene fi ts have to be weighed against the impacts for affected populations, they claim. Beyond this, questions remain on numerous aspects of the bill.  Oxfam India   Policy Brief   No. 2 | October 2012 Oxfam India associates itself with the Standing Committee Report and recommends the following amendments: Recommendations:  Compulsory land acquisition should be limited to a few strictly-de fi  ned government purposes. For private projects, the government’s role should be to regulate purchases.  The causal link between compulsory land acquisition and impoverishment is well documented in India and abroad. 11  The guiding principles of the bill should therefore be to minimize such acquisitions.  Accordingly, the scope of public purpose should be narrowed down to a few strictly de fi ned government purposes such as schools, hospitals, infrastructure and defence. Purchases for PPPs or private projects should rely on market mechanisms. In such cases, the government has an important role to play in avoiding information asymmetries and preventing abuses, but it should not exercise its power of eminent domain. Instead of this clear distinction between public and private, the bill allows acquisition for private purposes where “their bene fi ts largely accrue to the general public”. 12  This could include any PPP and most private projects, thus opening the door to widespread compulsory acquisitions. The 2011 version of the bill seeks to balance such risks by making it mandatory to secure the consent of 80 per cent of affected people. But fl awed consultations, where signatures are faked and people pressured into consent, are too numerous to rely on this safeguard. Moreover, the government now appears to further weaken this safeguard by limiting the consent clause to a smaller percentage of landowners only. Social safeguards should be strengthened by giving binding powers to the expert committee’s recommendation.  The Social Impact Assessment study and its review by an independent group of expert is the main social safeguard provided by the bill. The study draws on consultations with Gram Sabha members to assess: the nature of public interest involved in the project and its potential bene fi ts compared to social and environmental costs; the number of affected families and the socio-economic impact on adjoining areas; whether the extent of land proposed for acquisition is the bare-minimum required, and whether acquisition at an alternate place is not feasible. 13  The assessment is then reviewed by a group of fi ve external experts, who may “make a recommendation that the project shall be abandoned” if its impacts are deemed unacceptable. 14  Ambiguities in this sentence undermine the reliability of the social safeguard. The binding nature of the recommendation needs to be spelt out in a way that leaves no room for future interpretations. Provisions for R&R should be amended to ensure that people are not worse off after displacement.  The dangers of monetary compensations handed out without planned efforts to “resettle people productively on land and in jobs” are well documented. 15  Another dark side of land acquisitions is that compensations have traditionally been given to landholders alone, leaving out scores of tenants, agricultural labourers, share croppers and forest dwellers. The proposed bill takes one major step forward by providing R&R entitlements to all affected people, in addition to the generous monetary compensation for landholders. However, this will prove meaningful only if R&R measures are strengthened—land should be compensated by land of similar value wherever possible; in other cases, R&R measures should restore the livelihoods of affected people. The guarantee of employment provided in the current bill is of little help in that regard, because it holds for only one person in the household and is not associated to clear conditions for termination. R&R measures in the current bill also fail to adequately protect women’s livelihoods. The attribution of a single job and money to an entire household will concentrate economic power around the male head of the family. For Scheduled Tribes notably, studies have established how displaced women lose their traditional economic roles, based on forest and agricultural resources. 16  Special laws that regulate a broad range of acquisitions should be effectively aligned with the proposed bill.  The signi fi cance of the bill will remain limited if 13 special laws that cover a broad range of acquisitions are not effectively aligned with it. Acquisitions for atomic energy, metro, railways, highways and mines fall under special regulations. These purposes, in fact, constitute the majority of government acquisitions. The requirement to align social safeguards and R&R measures under the 13 special laws within a two-year timeframe therefore is positive and should be maintained. Questions for Debate Beyond these aspects, the draft bill raises a number of dif  fi cult questions. Two such questions are:  What should the respective role of central and state governments be in de fi  ning compensation norms? Various stakeholders have highlighted the challenges of outlining a one-size- fi ts-all rule to calculate the compensation in a context where land-markets are highly differentiated and transactions are few and rarely reported adequately. Similarly, packages for R&R cannot ignore the speci fi c features of a population and their economic and social context.   Frequent cases of compulsory acquisitions by governments from various states show that the Union Government has a crucial role to play in setting minimum countrywide standards of compensation and R&R. However, these standards need to be fl exible enough to accommodate best practices from speci fi c states. More thinking is needed to outline a normative framework that is strong enough to ensure these minimum standards, but fl exible enough to accommodate local variations.  How can civil society be ef  fi  cient in holding the government accountable?  The real challenge for civil society will start after the bill is passed. How can the government be held accountable to its responsibilities towards those it displaces? Will the application of the provisions in the fi nal bill really minimize compulsory displacement? Will the livelihoods of the displaced be restored? As the bill is soon to be introduced in Parliament, the time has come to think about new ways to keep an effective check on the government. International accountability frameworks such as the Extractive Industry Transparency Initiative may be a source of inspiration: civil society organisations have campaigned for governments worldwide to voluntarily sign up to a set of minimum standards, and used the latter to hold them accountable. Can this tool help hold the government accountable by making its action visible, and ensure that the bill is more than a new framework sanctioning unchanged, socially disrupting practices? Notes 1 Government of India (2011), ‛ The Land Acquisition, Rehabilitation and Resettlement Bill ′  , Delhi: Ministry of Rural Development; for a summary also see: P. Bedi and S. Gangwani (2012) ‛ The Land Acquisition, Rehabilitation and Resettlement Bill, 2011 ′  , Legislative Brief, Delhi: PRS Legislative Research.2 Government of India (2012) ‛ The Land Acquisition and Resettlement Bill 2011 ′  , Standing Committee Report 31, Delhi: Ministry of Rural Development (,%20Rehabilitation%20and%20Resettlement%20Bill%202011%20-%20SC(RD)’s%2031st%20Report.pdf; last accessed August 2012).3 W. Fernandes (2004) ‛ Rehabilitation Policy for the Displaced ′  , Economic & Political Weekly, 39(12), p. 1191.4 K.B. Nielsen (2011) ‛ Land, Law and Resistance ′  , Economic & Political Weekly, XLVI(41). For analysis of how Narmada Bachao Andolan, contributed to making international law more sensitive to resistances in developing countries, see also: B. Rajagopal (2003) International Law from Below: Development, Social Movements, and Third World Resistance, Cambridge: Cambridge University Press.5 L. Wegner, G. Zwart (2011) ‛ Who Will Feed the World ′  , Oxford: Oxfam International.6 S. Chakravorty (2012) ‛ The Price of Land: Acquisition, Con fl ict, Consequence ′  , World Bank New Delhi Seminar, 30 July.7 The GINI coef  fi cient measures the extent to which distribution deviates from perfect equality: zero is perfect equality and one perfect inequality. P. Lanjouw and R. Murgai (2011) Perspectives on Poverty in India, Washington DC: The World Bank, p. 24.8 V. Rawal (2008) ‛ Ownership Holdings of Land in Rural India: Putting the Record Straight ′  , Economic & Political Weekly, 8 March, pp. 43-47.9 Government of India (2012) ‛ The Land Acquisition and Resettlement Bill 2011 ′  , Standing Committee Report 31, op. cit.10 Four times the market value in rural areas and two times its value in urban areas. Government of India (2011), ‛ The Land  Acquisition, Rehabilitation and Resettlement Bill ′  , op. cit, First Schedule, p. 33.11 Independent Evaluation Group (2012) ‛ Recent Experience with Involuntary Resettlement: India - upper Krishna (Karnataka and Maharashtra) ′  , Washington DC: The World Bank; M.M. Cernea (1996) ‛ Resettlement and Development ′  , Environment Department Papers (32), Washington DC: The World Bank.12 Government of India (2011), ‛ The Land Acquisition, Rehabilitation and Resettlement Bill ′  , op. cit., clause 2, za, vi, p. 6.13 Government of India (2011), ‛ The Land Acquisition, Rehabilitation and Resettlement Bill ′  , op. cit., Chapter II, A, 4, p. 7.14 Ibid, Chapter II, B, 4, p. 8.15 M.M. Cernea (1996) ‛ Resettlement and Development ′  , Environment Department Papers (32), Washington DC: The World Bank, p. 109.16 M. Barathi (2012) ‛ Tribal Women’s Perspective on the Land  Acquisition Bill ′  , Economic & Political Weekly, XLVII(20). © Oxfam India October 2012 This Policy Brief was written by Lucy Dubochet, Research Manager, Oxfam India, with contributions from Sharmistha Bose, Programme Coordinator – Natural Resource Management, Rebecca David, Programme Of  fi cer - Economic Justice, and N. Sudhakar, Programme Of  fi cer - Livelihoods. Oxfam India also thanks Videh Upadhyay for his valuable comments.This publication is copyright but the text may be used free of charge for the purposes of advocacy, campaigning, education, and research, provided that the source is acknowledged in full. The copyright holder requests that all such use be registered with them for impact assessment purposes. For copying in any other circumstances, permission must be secured. E-mail: by Oxfam India: 2 nd  Floor, 1 Community Centre, New Friends Colony, New Delhi-110025, India.OXFAM INDIAOxfam India, a fully independent Indian organization, is a member of an international confederation of 17 organisations. The Oxfams are rights-based organizations, which fi ght poverty and injustice by linking grassroots interventions, to local, national, and global policy developments. Oxfam India, Plot No. 1, Community Centre, 2nd Floor (Above Sujan Mahinder Hospital), New Friends Colony, New Delhi - 110 025Ph: 91 11 4653 8000; For comments and questions, please write to:; for further information, visit our website:
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