One hand gives, the other takes away!

Regular viewers of television in recent times must have become familiar with the young and zestful Priya, who introduces the inhabitants of rural and urban India to various schemes of the Government of India through a series of advertisements of the Bharat Nirman campaign. One of these shows a set of unbelievably naive villagers who explicitly articulate their joy at the prospect of their lands being taken over for a power project, and then speak sotto voce telling each other that they should ask for at least two times the market price as compensation for their land.

Priya overhears this, and beams from one end of her face to another as she can barely restrain herself from spilling The Secret. She then turns to Mishraji, presumably an official, and asks him to hand over the file with the "new conditions" to the villagers. The look of amazement on the villagers' faces as they see that the compensation is to be four times, sets Priya beaming once again, and she exhorts the villagers and all of us viewers to "know our rights".

That this was being telecast even before the Land Acquisition Act . which promises compensation for acquired land in rural areas at four times the market price - had actually been passed by the Parliament shows that the Government is now in election mode, and that it believes that laws such as the Land Acquisition Act and the Food Security Act will be its trump cards in the 2014 Lok Sabha elections. The Parliament finally passed the bill on 5 September 2013 . just a day short of two years since its introduction on 7 September 2011.

However, all the efforts of Priya notwithstanding, it is highly unlikely that villagers across the country will joyfully welcome a power plant or a dam or any other such project as has been depicted in the advertisement, and therefore, are not likely to be motivated to vote for those who brought in this law. Neither is the Act as benevolent and munificent as depicted, nor are the villagers as gullible.

It is not as if the Act does not have good features. Indeed, it represents an order-of-magnitude improvement over the colonial era Land Acquisition Act of 1894 that it has replaced. Yet, many structural infirmities that were already a part of the bill as introduced in 2011, and a series of subsequent amendments diluting its provisions has introduced many loopholes and escape hatches, yielding an Act that is unlikely to address needs of justice and fairness in land acquisition. Let us start by looking at some of the progressive aspects of the Act.

Progressive features

The name itself is to cheer for. The Act is now called "The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act 2013" signalling intention to ensure fairness and justice. Such a signal is important, even if symbolic.

The second important change from existing legislation is that for the first time, land acquisition has been clubbed together with resettlement and rehabilitation (R&R). Till now, there was a law only for acquiring land and the only legal entitlement for the land loser was some cash compensation. Under the new Act, R&R as a right is automatically triggered as an integral part of the procedure the moment the land acquisition process is initiated. What is more, even if any private entity purchases land through direct negotiations, the provisions of R&R in the Act will be applicable if the land purchased is above a certain quantity.

One of the most important provisions of the Act is that the state will acquire land under this Act for a Public Private Partnership or a private enterprise only if 70 per cent or 80 per cent respectively of the people likely to be affected give their prior consent for giving their land. This provision is a small step in the direction of meeting the demand articulated in the struggles of displaced people that decision-making in developmental projects must give a central place to the communities directly affected, and indeed must be based on their consent.

A unique feature of the Act is the provision for carrying out a Social impact Assessment (SIA) before the land acquisition process is started. This is a welcome step as land acquisition affects communities in myriad ways which are often not recognised. For example, land acquisition in a village will not only affect those losing ownership of those lands, but also small traders and artisans . such as petty shopkeepers, potters, cobblers etc. . who provide service to the village. They may lose their livelihoods as the village is displaced and dispersed, even if they don't lose any land. The SIA will be able to reveal all such realities.

Further, the SIA also has to include an assessment to determine "whether the proposed acquisition serves public purpose". The Act requires an Expert Committee to be constituted to review the SIA. If this Expert Committee finds that "the project does not serve any public purpose" or "the social costs and adverse social impacts of the project outweigh the potential benefits," it shall make a recommendation that the project be abandoned and that "no further steps to acquire the land will be initiated." Of course, the government has a right to reject this recommendation, but the Act requires it to give reasons for the same in writing.

Then of course, there is the provision of higher compensation as projected by the Bharat Nirman advertisement. The Act provides compensation at market rates for urban areas, plus an equal amount as solatium. Thus, for urban areas the compensation works out to be two times the market rate of the land. For rural areas, the compensation is the market rate multiplied by a factor between 1 to 2, as determined by the government, and an equal solatium. Thus, compensation in rural areas could go up to as high as four times, but it could also in many cases be less than that.

Loopholes and shortcomings

Despite the progressive provisions discussed above, justice and fairness are still likely to elude those losing lands and livelihoods, as there are loopholes and shortcomings galore in the Act.

First of all, the much touted provision of high compensation itself is misleading. True, it takes market price of the land as the base. However, it continues to adopt the same mechanism as the old Act to calculate the market price - namely, the value as specified in the Indian Stamp Act, 1999 or the average value of sale of similar lands in the vicinity. The problem with this method is well recognised, that is, price of land transactions in India are routinely and significantly under-reported.

Apart from the fact that the cash compensation will not be uniformly high as the Bharat Nirman promotion and other communications try to represent, the experience of the people displaced during the last several decades has also shown that cash as a form of compensation has serious limitations and even dangers. It has proved to be a highly disruptive and destructive force, rather than something that has helped displaced people get life back on track.

Cash can rarely help replace assets and means of livelihoods, and is often used up in debt repayment, or worse, in frivolous or non-essential spending. Therefore, displaced people have long argued through their struggles for compensation in terms of replacement of assets, livelihoods, and habitation. These should be in kind, rather than in cash and the focus should be on resettlement and rehabilitation (R&R), not on compensation. But the Act fails to incorporate that.

Many of the elements of resettlement envisaged are to be provided only in the form of cash; for some others too, which are to be given in kind, there is a provision to give cash instead.

The central focus of any R&R package has to be on restoring livelihoods; providing replacement land for land lost is the most critical element in this. For this reason, one of the most important demands of affected people has been that of "land for land". But this has been hardly considered in the new act.

Land for land up to a maximum of two and half acres is provided only if the land losers belong to the scheduled tribes and scheduled castes. For the others, the provision had been accepted only in the case of irrigation projects but has been de facto nullified by a last minute amendment in the Rajya Sabha that requires the acquiring authority to give land for land only "as far as possible".

The provision to return a part of the developed land to the oustee . important for example in case of urban development projects . is a good one and the Act states that 20 per cent of the developed land will be reserved for and be offered to the oustees in proportion to the area of their land acquired. But the catch is that this will be "at a price equal to the cost of acquisition and the cost of development."

While it is fair to expect the oustee to pay the cost of acquisition, the cost of "development" of the land could be shown to be very high and could thus nullify the chance of the oustee being able to buy it. Even when he can buy it, it could render nil any benefit because of the very high price that he is forced to pay for the land.

Many provisions of resettlement are based on minimalist principles; in other words, they create legal entitlement for the smallest possible thing. For instance, where employment is to be offered, it is specified to be "at a rate not lower than the minimum wages provided for in any other law for the time being in force." In short, this reflects a belief that the displaced are poor and must remain thus.

Several other resettlement provisions are rendered ineffective by prefixing them with diluting phrases such as "as far as possible" and "efforts will be made" etc. This can be seen in respect of many important issues such as granting of fishing rights in reservoirs to oustees and provision of irrigation for lands given to the displaced.

Thus, in spite of the recognition that R&R is critical to ensure justice to affected people, which is clear from the way the Act links these aspects to land acquisition, the actual provisions for resettlement and rehabilitation in the Act are too weak. These provisions are most inadequate to even restore the house, habitation and livelihoods of the displaced persons, let alone their devastated lives.

There are other loopholes and conditionalities too that dramatically reduce the impacts of the progressive provisions. For example, why should the condition of consent of the affected people be there only for private projects? Will a government owned dam or thermal power plant have any less impact on the people than a privately owned one?

Moreover, in today's policy environment of deliberate privatisation and divestment of publicly owned companies, what would happen if a government project acquires land without consent and this project is subsequently sold to private owners? In fact, there is a serious risk of this process being institutionalised on the lines of the well-known Ultra Mega Power Project (UMPP) model where the government forms a fully state-owned Special Purpose Vehicle (SPV) for building the power project, and the SPV obtains all the clearances, acquires land and then is sold to a private player. There is no protection in the Act to prevent such misuse and hence there is every danger that this critical provision will be cleverly bypassed.

A last minute amendment in the Rajya Sabha has removed the requirement of the SIA for any irrigation project where an Environmental Impact Assessment or EIA is required. This means that virtually all irrigation projects would be out of the requirement of the SIA.

It is true that the SIA and the Expert Committee that is to review it have the right to determine whether the proposed land acquisition and the project are serving any public purpose or not. But the definition of 'public purpose' given in the Bill is so broad and flexible that almost any project can be shown as a public purpose project. Since the Committee will have no room to assess the public purpose of any project outside the scope defined by the Act, the real power of the Committee is as good as non-existent.

Last, but not the least, the provisions of this Act are not to be applicable to all cases of land acquisition in the country, some of which are presently governed by Acts other than the Land Acquisition Act. For example, land for coal mining, which could well constitute a significant part of the lands to be acquired in the near future, are now acquired under the Coal Bearing Areas Act and the provisions of the new Act would not be applicable to it though issues related to acquisition could be the same as in other cases.

Thus, while the new Act has replaced the outdated and highly unjust one of 1894, and has certainly attempted to introduce progressive provisions, many of these have been rendered ineffective by loopholes and dilutions. The provisions for resettlement and rehabilitation are extremely weak and have ignored several decades of lessons learnt painfully through the suffering of those who have been displaced in earlier projects. In an overall analysis, therefore, the new Land Acquisition Act is hardly likely to be able to deliver justice to those losing their lands or being displaced. It is a historic opportunity that has been lost.