Situating the Land Acquisition Act and Its Amendment Ordinance

C.N. Subramaniam

The Declaration of Rights of Man & Citizen of the French Revolution (1789) which, embodied the basic principles of the modern bourgeois state, considered it important to insert the following clause:

“17. Since property is an inviolable and sacred right, no one shall be deprived thereof except where public necessity, legally determined, shall clearly demand it, and then only on condition that the owner shall have been previously and equitably indemnified.”

This clause became a bone of contention during the Jacobin phase of the revolution, when the lower middle and proletarian sections of the society pressed for control over prices and fair distribution of grain and regulation of wages by the state. The abovementioned clause was a response to the feudal / absolutist state’s claim to the doctrine of ‘Eminent Domain’ by which the Sovereign could lay claim to any property and acquire it with or without compensation. Even the Mughal state for example claimed the right to forfeit the wealth of its nobles and even merchants at the will of the emperor. This clause of the Declaration of Rights was to protect the properties of the citizens from arbitrary expropriation while at the same time asserting the right of the state to appropriate private properties for ‘public purposes’ after due compensation.

When the anti-feudal struggles extended to abolition of serfdom and distribution of feudal estates to peasant tillers especially in the eastern Europe, it became evident that the meaning of ‘public purposes’ could be widely interpreted. The Great October Revolution in 1917, ended private ownership of land and followed it with the Land Law of 1918 which stated:

Article 1. All private ownership of land, minerals, waters, forests, and natural resources within the boundaries of the Russian Federated Soviet Republic is abolished forever.

“Article 2. Henceforth all the land is handed over without compensation (open or secret) to the toiling masses for their use.

“Article 3. With the exceptions indicated in this decree the right to the use of the land belongs to him who cultivates it with his own labour.

"Article 5. All minerals, forests, water, and other live forces of nature (depending on their importance) are placed at the disposition of the Soviets to be controlled by them.”

This can be seen as an act of ‘nationalising’ land which allowed peasants to use arable land with family labour and eke a living (usufruct rights) without proprietary rights (to sell, mortgage or inherit). The implementation of the law was at that time limited to appropriation and redistribution of lands of large feudal estates and did not disturb kulak farms which used hired labour, though the law did provide for appropriation of such lands too. Subsequently the Soviet state used this law to ensure Collectivisation of Agriculture and transform land use across the USSR as a part of its project of industrialisation.

Marxist theory of Ground Rent distinguishes between ‘differential ground rent’ which arises from differences in the productivity or fertility of the land; and ‘absolute ground rent’ arising from the fact that supply of land is limited and hence a property holder in land enjoys a monopolistic position. In other words, absolute ground rent is a remnant of feudal lordship. It has been argued that the abolition of ‘absolute ground rent’ by abolishing private property in land is not inconsistent with the requirements of competitive capitalism. A situation in which the state owns all land and allocates land to different users to organise production on it, is consistent with capitalism. In fact most capitalist states do claim ownership of forests, mineral resources etc. Freeing land from monopolist hold will also enable capitalists to combine the different ‘forces’ of production freely and constantly change the combination to respond to market requirements. This would still allow for the continuation of ‘differential ground rent’ on account of varying productivity of the land (including factors like proximity to raw material source or market, etc).

However, the above understanding is premised upon an assumption of universalisation of capitalist production, where non-capitalist forms of production (whether peasant or tribal) are negligible. Such a situation for example exists in advanced capitalist countries like Britain, Germany, USA etc. In societies where capitalism is not the universal form of land use, nationalisation and reallocation of land for different uses, is tantamount to unjust interference in the community’s life and undermining livelihoods and lifestyles of people and violates the principle of self-determination. Under such conditions it may be necessary to protect the ‘property rights’ and ‘traditional rights of land use’ (of collectively used lands). If these are no longer sustainable in contemporary world, use democratic, equitable and just methods to enable their transition to different patterns of land use and livelihoods. In concrete conditions of most non-capitalist or transitional societies as in Asia or Africa and even contemporary Russia, which is transiting from collective farms to private corporate farming, these issues are complicated by high level of internal stratification and social exclusion (gender, caste, community, etc) in these societies and also the capitalist market processes making them economically and environmentally unviable. This eventually results in different forms of dispossession and proletarianisation.

Lenin considered both these dimensions in his classic study of Development of Capitalism in Russia. The solution that Lenin eventually proposed was nationalisation of all land by a revolutionary state which would simultaneously sweep away the remnants of feudal landholding, ensure just redistribution of land and provide support to transit to socialisation of production with justice and dignity. This is what was attempted by the Soviet Union between 1918 and 1940; however, this created much tension due to the fast pace of collectivisation and industrialisation, both of which were mandated by the hostile international situation. The problem was complicated by the centuries old peasant communitarian traditions of attachment to particular pieces of land and viewing that land not merely as a ‘factor of production’ but as a part of one’s identity.

In most of post World War II Western Europe and US (which had a strong peasant proprietorship), dispossession of peasantry and its absorption in the middle class and industrial proletariat took place through the economic processes of rendering them unviable. A similar situation is also emerging in the erstwhile USSR. In countries like India or Africa, ever since the adoption of neo-liberal policies leading to reduction of state support to and investment in agriculture and simultaneous exposure to international competition, the unviability of agriculture has escalated manifold. By all accounts we are witness to unprecedented agrarian crises, reflected in nation-wide farmer’s suicides. This has been compounded by the very sluggish growth of employment despite the much touted high growth rate of the economy. Not only is the economy not generating enough jobs to absorb the marginal farmers and agricultural workers, but the poor performance of public educational and health sectors have kept them unemployable in the newly emerging sectors. Given this situation the marginal farmers who form the bulk of the rural population, are looking towards selling their land as the last resort, to build a meagre capital.

It is also fairly well documented that land market in the country has been extremely robust due to heavy investments of black money pushing land prices abnormally high. This black money incidentally is a by product of the crony capitalism that has been immensely strengthened by the so called ‘liberalisation’ of the economy. Part of the land hunger is also driven by the need to set up industrial estates, catering to rapidly expanding urbanisation, mining, infrastructure expansion etc. A third dimension is what appears to be an unprecedented international race for grabbing land in the third world by multinational corporations, especially agribusinesses, witnessed in the former USSR, Africa, Indonesia etc.1 In all these countries (especially in Africa and Indonesia) governments are at the forefront of acquiring land from tribal and farming communities and transferring them to the tune of lakhs of acres to MNCs in the hope of attracting productive investment.

We need to understand the enactment by the Indian Parliament in 2013 of an act to replace an antiquated colonial land acquisition law and the present attempt by the BJP government to amend this act.

In 2013, the Indian Parliament virtually unanimously passed the ‘Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act’ (hereafter the ‘LAA 2013’) as a part of a series of legislations passed by the United Progressive Alliance Government based on the so called ‘Rights Approach’. (The other legislations in the series included Right to Food, Right to Forest land, Right to Free and compulsory Education etc.) Bharatiya Janata Party (BJP) which had supported the passing of the Act subsequently came to power with a massive majority in the very next year. One of the first acts of the new government was to launch a criticism of the LAA 2013 denouncing it as an anti-development and anti-industry act and came out with an Ordinance amending it in December 2014. It eventually pushed the amendment bill through the Lok Sabha, but could not put it to vote in the Rajya Sabha where it did not have the requisite numbers to pass the bill. Instead it once again promulgated the ordinance, but eventually allowed it to lapse last month. It is waiting for impending elections to pass and to gain a majority in the Rajya Sabha.

We shall briefly look at the LAA 2013 and see how it was a long overdue improvement over the previous act dating from the 19th century colonial rule, but at the same time it had enough provisions to undermine or subvert the democratic gains of the act. The colonial act under which the Government of India acquired land gave the state unlimited powers under the doctrine of ‘Eminent Domain’ which asserted the right of the Sovereign to acquire land at free will. While it provided for compensation, it did not provide for rehabilitation or resettlement of the dispossessed. Over about 120 years the state acquired land arbitrarily paying pittance or nothing to the owners of land. Further under this act only ownership of land was recognised as worthy of compensation, and not loss of livelihood arising from the land acquisition. Ever since 1980 as new movements against land acquisition by the state for diverse purpose gained strength and power, it became increasingly evident that the old land acquisition act needed to be replaced with a more contemporary law.

The LAA 2013 has the following important provisions:

1. The government may acquire land for certain ‘public purposes’ namely, defence, wide ranging infrastructure projects (including private hospitals and colleges, agro industries, industrial corridors, tourism etc), rehabilitation of project affected persons, housing for the poor, etc.

2. The government may acquire land for such ‘public purposes’ under ‘public private partnership’ provided 70% of the affected population consents to it.

3. The government may acquire land for such ‘public purposes’ and hand over the land to private companies provided 80% of the affected population consents to it.

In other words, it allowed for a very broad interpretation of the term ‘public purpose’ and provided for even covering ‘public private partnership’ and outright private companies. In situations in which land is acquired by the government for transfer to PPP or to private companies, consent of 70% to 80% of the ‘affected population is mandatory. Such consent would not be necessary in case the government acquires the land for use by it for the ‘public purposes’. The innovation in the act was to define the ‘affected families’.

“families whose land has been acquired; families who may not own any land but whose primary source of livelihoods (for the past three years) has been affected by the land acquisition (agricultural workers, tenant farmers, artisans, etc); tribes and communities with traditional right to use the forests being acquired; urban families whose primary source of livelihood is affected.”

In requiring consent of a group which included diverse kinds of residents the act recognised the democratic and collective right of a wide range of people over land, not just of those who legally owned it.

Another significant innovation of the act was making mandatory a public process of ‘Preliminary Investigation of Social Impact and Public Purpose’ (‘Social Impact Study’ for short). Thus mere contention of a government that this was for public purpose was not sufficient and a public investigation, albeit by a government agency, involving local elected functionaries, public etc. to determine if the project really serves a public purpose, the number of families likely to affected, the amount of land etc likely to be affected, cost of rehabilitation, whether the project requires so much land, whether alternative sites have been considered etc. This preliminary report would be vetted by an experts group, again to be appointed by the government, and make recommendations. However, the government could still overrule its recommendations but give written reason for the same. As can be seen, while it opens radical possibilities of democratic control and public debate, it retains all key decisions in the hands of the government. At least it ensures a greater public participation and transparency in the process.

Exceptions: The act exempted land acquisition under a number of previous acts from the Social Impact Study. Provisions of consent and social impact assessment were not applicable when land was acquired under any one of the 13 enactments such as the Atomic Energy Act, 1962, the Land Acquisition (Mines)Act, 1885, the National Highways Act, 1956, the Petroleum and Minerals Pipelines (Acquisition of Right of User in Land) Act 1962, the Coal Bearing Areas Acquisition and Development Act, 1957, the Electricity Act, 2003, and the Railways Act, 1989 and six others. (Section 105 and IVth Schedule) In such cases only the provision for compensation and rehabilitation will be applicable. In other words atomic energy, mining, rail and roadways, electricity, etc were exempted from public scrutiny.

The LAA 2013 severely restricts the possibility of acquiring irrigated and multi-cropping land for non agricultural purposes on the plea of protecting food security.

The Five Year clause: the Act provides that in case the land acquired is not used for the specified purpose it would be returned to the original owner.

The Act provides for an elaborate system for calculation of just compensation, Rehabilitation etc. Comparisons with for example the US schedule for compensation reveal that the Indian norms are far below international standards. As per LAA 2013, it is the district collector who determines the compensation rate based on market value of the land and empowers the collector to discount the market rate if he considers it too high. On the other hand it also empowers the collector to go beyond the prevailing market rate if considerations of justice and equity require it. Anyway, it does not account for future appreciation of land value as a result of the project, which is a major loss for the landowners. In addition to the compensation to be paid to landowners, the LAA provides for resettlement and rehabilitation of those whose livelihoods are affected. These are significant gains for the democratic movements which over the last four decades have fought for broadening of the scope of compensation and rehabilitation to the landless and artisanal groups.

Now what are the changes being suggested by the BJP government under the short lived Ordinance?

To begin with the government began a tirade against the entire conception of the LAA to discredit it as misguided anti-development and anti-national. It specifically targeted the idea of conducting public Social Impact Study as time-consuming and inhibitive, and the idea of getting consent of 70-80% of the project affected for PPP projects and private projects. Given these two provisions it argued that it would be impossible for the government to facilitate industrialisation or infrastructural development. Accordingly the Ordinance provides for the following amendments to the LAA.

1. Exempt five categories of land acquisition from the requirement of consent and Social Impact Study clauses.

2. These being national security, infrastructure development, housing, industrial corridors, social infrastructure projects under PPP.

3. This may only be a limited change given the exemption already given under LAA to 13 land acquisition areas mentioned above.

4. It seeks to remove the clause under which the land has to be returned if not used within five years; now the number of years will be as stated in the project proposal.

5. It seeks to make it difficult to prosecute government officials for misuse of office.

6. It seeks to facilitate the conversion of irrigated and multi cropped land for non agricultural use on the plea that in many states like Punjab or West Bengal, most of the land available is fertile and irrigated and such a provision will severely hamper land acquisition.

It keeps the compensation and rehabilitation package intact as per the LAA.

It is clear from the above that the Ordinance seeks to do away with some of the substantial provisions of the LAA in most of the areas under which land is acquired especially the ones relating to consent and public Social impact study.

This ordinance and the debate around it seek to discredit the Act and pave the way for an eventual repeal of it altogether. While this has gra­ve implications for the process of dispossession of the peasantry and the tribal people, it also has implication for the other ‘rights approach’ based enactments, which build entitlements of the people.


1. Oane Visser and Natalya Mamonova, Large-scale land acquisitions in the former Soviet Union. A study of rural social movements and land Conflicts’ IS Land Academy report (Revised Version) Lorenzo Cotula, Sonja Vermeulen, Rebeca Leonard and James Keeley, ‘Land grab or development opportunity? Agricultural investment and international land deals in Africa, © FAO, IIED and IFAD, 2009 Compulsory acquisition of land and compensation, FAO, Rome 2008

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