New rules of land acquisition law: a primer

‘Make in India’ has to factor the ease of doing business in India


Manoj Kumar | November 4, 2014

Earlier this year, the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement [LARR] Act, 2013 was brought into force, replacing the archaic Land Acquisition Act of 1894. The new legislation, in the works for several years, is an effort to address the historical injustice dealt upon land owners facing unscrupulous agencies of acquisition, and has been formulated keeping in view several concerns with regard to rehabilitation, resettlement and compensation of the land owners, while also speeding up procedures.

To further this agenda, the new government has notified the rules for two of the Act’s most important sections; those pertaining to the social impact assessments [SIAs] and the consent provisions. The following is a study of the current position of law, and how the new rules differ from the previous set, issued in 2013, in the aforementioned aspects.

The law – status quo

At present, the LARR Act contains provisions for –

-    Social impact assessment [SIA] study in all cases where the government intends to acquire land for a public purpose;
-    Governments wrapping up the process of assessing the social impact of a project and getting signed consent letters from land-owners within six months;
-    Limitations on acquisition of multi-crop land for safeguarding food security;
-    Consent of 80% of the affected families for land acquisition for private sector and, 70% of affected families for PPP projects under ‘public purpose’ (as defined in the Act), etc.
-    Rehabilitation and resettlement in the case of specified private purchase of land;
-    Compensation to each affected family after the consent process is over, to be paid separately to all parties. Six months (to add to the six to finish with SIA and consent) have been given for completing the process

The rules – a summary

Social impact assessment

The LARR Act regulates the acquisition of land for “public purpose”, and requires that social impact assessment [SIA] be conducted before acquiring land. The rules outline the process of conducting an SIA, and in order to do away with any ambiguity in preparing it, give out an exhaustive list of socio-economic and cultural parameters to be covered by the same. Other salient features of SIA are:

  • The government which is acquiring land must establish an independent organization to conduct SIAs or to ensure that they are conducted by organizations other than the body requiring land. This organization will determine the SIA fee. A notification for carrying out an SIA must be published within 30 days of receiving the SIA fee from the body requiring land.
  •  The SIA report [along with a Social Impact Management Plan] must be published within six months of its commencement. It must include the nature and extent of the social impact of the project.
  •  The SIA must be conducted in consultation with the concerned panchayat or municipality, and also include a public hearing in affected Gram Sabhas. The local administration is to assess the impact of the proposed project on key areas like livelihoods, health and culture, and to take into account the likely effect of the takeover on women.
  • The Rules require the state or the central government to establish a Social Impact Assessment Unit, an independent organization which shall be responsible for ensuring that SIAs are commissioned and conducted by such person or bodies other than the Requiring Body as per the provisions of the Act. This is a critical provision for maintaining the credibility of the SIA.
  • As an extension of the above point, the Rules explicitly state that the Requiring Body shall not be involved in any way in the appointment of the SIA agency, and that it should be ensured that there is no conflict of interest involving the team members of the SIA agency.
  • The SIA Unit is also tasked with building and expanding on a Database of Qualified Social Impact Assessment Resource Partners and Practitioners, conducting training and capacity building programmes for the SIA team and community surveyors, and review, evaluate and strengthen the quality of SIAs and the capacities available to conduct them.
  • The Rules require the appropriate government to maintain a web-based work flow and information management system to track every step of the acquisition process.

To be noted

1.    “A social impact assessment (SIA) is mandatory in all cases..” [Rule 10, Part III; 2013]. The rules most recently notified in 2014 do not contain this provision.

2.    The provision that public hearings may be held in those gram panchayats under which villages are impacted by acquisition, even though their land might not be being acquired, has been removed.

3.    The provision for retrospective operation of SIAs has been done away with.


The Act requires that the consent of land owners be obtained prior to the acquisition of their land. As mentioned above, the consent of 80% of land owners is required for the acquisition for private projects, and 70% of land owners for public-private partnerships. No consent is required for acquisition for government projects. The Rules outline the process of obtaining the consent of land owners:

  •  A list of all affected land owners from whom consent is required has to be drawn out by the district authorities. This list has to be made available in the affected area for at least 10 days before obtaining consent.  
  • Consent from affected landowners must be obtained in writing through signed declaration while the SIA is being conducted. The District Collector shall be responsible for obtaining consent. The government must update land titles to identify land owners.
  • Public hearings have to be conducted in all the gram sabhas where members are directly or indirectly affected by acquisition of the land. A gram sabha with half of its members present can pass the resolution in favour or against the acquisition by a majority vote.
  • The proceedings must be recorded on video, before which all concerned households will be provided with a copy of the SIA report, details of compensation as well as rehabilitation, and a written statement signed by the collector that there would be no adverse consequences if consent is withheld.
  • Landowners from whom the signed consent form is not received will be counted as having withheld consent.
  • No land can be acquired in scheduled areas without the consent of the gram sabhas.

To be noted

1.    The provision that the Gram Sabha and/ or land owners may raise queries for further information after formalities regarding SIA, rehabilitation and compensation have been completed, and their details shared, and that these are to be addressed within 7 days by designated officials, have been removed from the 2014 Rules.

2.    With regard to the Gram Sabha’s consent, the provision of holding a second meeting if the quorum of GS is not met, has been done away with.

3.    With regard to land owners’ consent, the 2014 Rules make certain modifications, as follow:

  • Instead of representatives from private companies being present to clarify doubts or respond to land owners’ questions in cases of acquisition by such private company, representatives of the Requiring Body will now perform this duty.
  • That the terms and conditions initially offered by the Requiring Body may at a later stage be later negotiated is no longer an option.

4.    State governments are to decide if unused acquired-land should be returned to the farmer or added to its land bank. This clause applies even if owners return the compensation.

5.    Those stakeholders ex-parte during land owners’ meetings can still submit assent to acquisition within 21 days. Instead of facilitating another meeting so that owners previously absent may be properly apprised of the consequences involved, this clause concentrates on speeding up the acquisition process, seemingly at the cost of the affected parties’ welfare. The question arises about how parties are to properly determine the course of their actions if they are not aware of the ramifications of the meeting?

To Conclude:

-    In introducing a new set of rules for this purpose, the government has attempted to streamline the course of land acquisition and brought clarity to the dual processes of social impact assessment and consent, while reducing the scope for litigation.

Also, the government has made consent more stringent, citing concerns that land owners are often uprooted from their only source of livelihood for the benefit of the industry or large infrastructure projects, and do not receive a fair deal or market price for the land.

However, the problem with the aftermath of land acquisition has always been the application and enforcement of the safeguards contained within the legislation, not the law in it self. Thus, the validity of the new Rules will remain questionable till such time has passed as will allow a reasonable examination of the law’s functioning.

-    Criticisms for the LARR legislation have centered mostly around the issue that the timeline envisaged by it is not feasible - according to the current Rules, governments will have to wrap up within six months the process of assessing the social impact of a project and getting signed consent letters from land-owners; another six months have been given for completing the compensation process.

The common consensus is that the twin concepts of consent and SIA, as currently envisaged, affect industrial growth adversely. This is understandable, considering, with respect to available evidence, that it is very difficult to get both the consent of 70 or 80 per cent owners [depending on the nature of undertaking], and conclude SIA, inside a year; industry body CII also voiced its reservations on the timeline in this regard, saying that: “.. our assessment is that it will take 36 months at least. Six months for the SIA and consent is not practical. It is too ambitious.”

Such an endeavour will have the consequence of rushing the process; the administration will end up ignoring genuine concerns of the people in order to keep to deadlines, rendering the intent of the government to ensure that the rights of stakeholders are upheld, redundant.

All eyes will now be on the implementation of the Rules meeting the much debated pain-points of  project developers and land-owners alike i.e adequacy of compensation and its consequential  impact of escalation of project costs upto five times, livelihood to displaced persons – beyond just the rehabilitation and resettlement mandate and of course regaining stakeholder confidence to ensure the ‘Make in India’ initiative is seen as a realistic initiative from the ‘ease of setting up & doing business in India’ perspective.



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