Land Acquisition Leasing Laws Farmers in a Fix

The Union Government, having failed amending the Land Acquisition Act 2013, indirectly tries to make changes in favour of the industry. Gujarat’s new Bill and the Centre’s model Land Leasing Act exposes the hidden agenda of the BJP-ruled Governments
Land Acquisition Leasing Laws Farmers in a Fix

The Centre and State governments are in a catch-22 situation with regard to land acquisition for infrastructure and development projects. So is the case with farmers. Maintaining a balance between farmers’ welfare and the industry interest has become a herculean task. Farmers now know the value of their land and the industry want their land on affordable cost to make their projects commercially viable. The Land Acquisition Act 2013, enacted by the UPA government is pro farmers and the industry pushed for changes in ‘consent’ and other clauses. The BJP-led NDA government faced severe criticism in Parliament and outside for bringing in changes to the Act. To attract investment and speed up stalled infrastructure projects, the Centre made repeated attempts to get changes to the Act passed in Parliament, but failed. Now the Centre acts smartly and comes out with a model Agricultural Land Leasing Act, 2016. The Government wants States to follow this model and thus begins the process of dilution of the original Act. Gujarat takes the lead.

Land Acquisition Act 2013

The Land Acquisition Act 2013, enacted by the UPA government, has accorded top priority to fair compensation to farmers depending upon location, quality, type and productivity of land. Farmers can get fair cost of their land and it can go upto four times of market or reserve rates. With farmers’ consultation and consent of the majority, district authorities fix the rate and purchaser would require upto 2 to 4 times over the fixed rate determined by quality, location and other such detriments. Another important components covered under the provision of Social Impact Assessment (SIA) of the Act include loss of asset and loss of income. There may be some landless labourers engaged in ancillary activities for livelihood. They need to be compensated and rehabilated to another place with financial assistance. From farmers point of view, ‘consent’ of 80 percent of landowners and SIA are critical components of land acquisition, however, for the industry these two mandatory provisions are proving to be a hindrance. As per the Act, 80 per cent of land owners must give their nod for the acquisition of land.

After coming to power in 2014, the Narendra Modi government brought in amendments to Land Acquisition Act-2013. The NDA version, however, failed to pass the muster of Rajya Sabha as the BJP and allies lacked numbers in the Upper House. The Union government then dropped the idea of passage of the bill in Rajya Sabha and instead asked states to amend the law suiting them.

Gujarat Dilutes Centre’s Act

The BJP ruled Gujarat takes the lead in diluting the the stringent provisions of the Centre’s Act. The state recently passed a bill in the Assembly doing away with the provisions of SIA and ‘consent’ clauses for acquisition of land for public purposes and industrial corridor. The Bill is known as ‘Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Gujarat Amendment) Bill 2016.’ One of the key provisions of the bill is doing away with SIA for projects related to Defence and social sectors, such as building air base, defence manufacturing units, schools, roads, canals, affordable houses, etc. The other key change is that SIA will not be carried out for land acquisition for industrial corridor.

Another key amendment is doing away with the provision of consent of affected parties.As per the new bill, these provisions will not be followed if the land is acquired for public purpose. However, it will remain in place for acquisition related to industrial development. The state government argues that these provisions are time taking and delay the projects.
The state government defends the Bill by saying that it aims to expedite process of land acquisition for various social sector projects, such as building Narmada canals, affordable houses for the needy citizens, land for industrial corridor, bullet train project, rural infrastructure and many other pro-people projects.

The state government also inserted/ replaced some provisions through the bill. It introduced a new provision of land acquisition through direct consent of land owners.In addition, the infrastructure projects under PPP mode, where land continues to vest with the government, are also exempted from social impact assessment and consent clause.

Model Act for Land Leasing

The BJP-led NDA government promptly accepted and rolled out a new model Land Leasing Act prepared by T Haque Committee. The model Agricultural Land Leasing Act, 2016 would legalize leasing of land in India. This Act, once adopted by states, will over rule any other existing Act and would be effective from the date of notification by the respective state.T Haque-led committee was set up under NITI Aayog last year and it has formulated the Act. The model Act can be seen as a savior for the government whose repeated efforts to get changes to the Land Acquisition Act, 2013 passed in Parliament failed.

As per the Act, the land owner can now legally enter into a lease contract with the tenant for use of his/her agricultural land for agriculture and allied activities for a specified period for a consideration based on an agreement with terms and conditions mutually agreed by the owner and the cultivator.

Agriculture and allied activities would include raising of crops including food and non-food crops, fodder or grass; fruits and vegetables, flowers, any other horticultural crops and plantation; animal husbandry and dairy; poultry farming, stock breeding; fishery; agro forestry, agro-processing and other related activities by farmers and farmer groups.

Telengana, Bihar, Karnataka, Madhya Pradesh and Uttar Pradesh ban land leasing with exceptions granted to landowners among widows, minors, disabled and defence personnel. Tenancy is banned in Kerala for long but the state has only recently permitted only self-help groups to lease land. States like Punjab, Haryana, Gujarat, Maharashtra and Assam do not ban leasing but the tenant acquires a right to purchase the leased land from the owner after a specified period of tenancy.

Under the Act, leasing of land will ensure complete security of land ownership right for land owners and security of tenure for tenants for the agreed lease period.

Further, it allows the terms and conditions of lease to be determined mutually by the land owner and the tenant and facilitate all tenants including share croppers to access insurance bank credit and bank credit against pledging of expected output.

The Land Acquisition Act 2013, Gujarat Model and model Land leasing Act, taken together appears pro-people on paper, however, at ground level, they aim to create a positive atmosphere for the industry and investment. Farmers and landowners are still in fix as they expect fair compensation which the industry does not want give citing viability factor. Obviously all stakeholders need keep their fingers crossed till confidence building measures along with transparent policies are genuinely in place. 

The Changing Face of Rural India