Land Acqusition Act for Industrial purposes

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10th April 2013 Shilpi AggarwalShilpi AggarwalSEM-2, MURP

Land Acquisition Act for Industrial Purposes

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Topics

Land acquisition? Land acquisition act 1894- Controversies and Issues Land acquisition act amendments 1984, 2007, 2011

1. Gujarat, 2. Karnataka, 3. Maharashtra, 4. Andhra Pradesh 5. TamilNadu

Opinions: Rajiv Kumar, Adi Godrej, Rajesh Bhati, Director General, FICCI, President, CII, Coordinator, Kisan Sangharsh Samiti

Suggestions: Based on Learning’s from Singur, West Bengal

Introduction

Top 5 states in India

Formulating a policy for India

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Land acquisition?

Q. Why Land acquisition ? Economic growth

Growth in productivity

Change in the structure of the economy Primary activities Industry and services

Change in land useAgriculture land Industrial, Real estate

Work participation Agri. Labourers Industrial worker

Urbanization

Land acquisition- Where government forcibly acquires private land for public purpose without the consent of the land owner.

Land purchase- In which the sale is made by a willing seller.

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Land acquisition act in India Land acquisition act 1894-The government has to follow a process

declaring the land to be acquired, notify the interested persons, and acquire the land after paying due compensation. Various state legislatures have also passed acts that detail various aspects of the

acquisition process. Controversies and Issues

Land acquisition occurred in India during 1951-1990, over 21.6 million people displaced categorized as ‘development-related displacement’. due to heavy scale projects like dams, canals, thermal plants, sanctuaries

industries and mining. The controversy Legislative changes are required, because the economic and social policies have

changed since1894 Unfair monitory compensation creating displaced, jobless people, victim of several

problems Complicated process causing delays in project execution and completion Issues- Political and social protests against the acquisition of land

Source = Land Acqusition act 1894 ( as modified in 1985)

Tata Motors in Singur West Bengal (997acres) Yamuna Expressway in UPNarmada Bachao Andolan, MP

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Land acquisition (amendments) Bill 2007, 2011

Source = http://www.tcl-india.net/landacq, http://en.wikipedia.org/wiki/Land_acquisition_in_India#cite_note-4

Displaced Tribes due to large scale projects in different states

Place State Population % affected popKarjan Gujarat 11,600 100%

Sardar Sarovar Gujarat, MP 2,00,000 57.6%Mahi Bajaj Sajar Rajasthan 38,400 76.28%

Bhakra Himachal Pradesh 36,000 34.76%Amendments along with Rehabilitation and Resettlement Bill, 2007 & 2011

valuation of land- The Avg.sale price of similar

transactionwhichever is higher

Cost of compensation- Cost of land + value of land + compensation equal to 2 times

(rural) & 1time (urban) of market value + Solatium equivalent to 100%

Definition of 'public purpose’-For defense purposes, For public infrastructure projects,

or For project useful to the general

public Social impact study- effectsof displacement, a Tribal DP,Infra. facilities in

resettlementAreas compensation for tribal,Forest dwellers, with tenancyrights

Structural & implementation Issuesmandatory R&R for all pvt. Purchases,inadequate and disorganized records

ofproperty rights

Establishment of Land AcquisitionCompensation Disputes SettlementAuthority at state and national

levels

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Top 5 states in India State Policy/incentives Industries

Gujarat- Petro-capital’ State of India (30% of Petrochem, 50% Chem. & Pharma.) 16% of the Industrial production in the country

financial assistance at the rate of 20%-50% of fixed capital investment, developer eligible for exemption on payment of stamp duty at the rate of 50%

encouraging private sector for setting up specialized Industrial Parks, Hi-tech parks, Investment parks, Export parks SEZ

Maharashtra- major share is basic goods, consumer durable & capital goods 22% share of total ind. Pro.

Industrial Promotion Subsidy (IPS) 25%-75% to Fixed Capital Investment, 0 VAT for employment based incentive (EPF,ESI)

Exemption from Electricity & stamp Duty, refund of Octroi / Entry Tax

Karnataka- knowledge & technology capital IT, bio-technology, R&D institutes.

Investment Promotion Subsidy, Stamp Duty exemption and Entry Tax, APMC Cess/fees

1st in the country to bring out State Specific Industrial policies Talukas classified into Zones,

Andhra Pradesh -major contribution to food grains; horticulture milk, egg & meat, software exporter

100% reimbursement of Stamp duty and transfer duty,50% on skill up gradation and training the local manpower

Single Window System, Creation of “Investment Promotion Cell” to facilitate investors

TamilNadu-major share 20-40% of automobiles & components, IT and software, electronic hardware, textile products,

For Investment of 100 crores in 3 yrs, soft loans will be equal to VAT at 0.1% interest, for >250 crores refund of VAT+CST

4th largest state in its economic size, capital & electricity tax exemption, environment protection infra subsidy

Source = industrial policies of states of Gujarat, Maharashtra, Karnataka, Andhra pradesh, and TamlNadu

TamilNadu

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TamilNadu

Industrial Development Authorities

Top 5 states in India

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Formulating a policy for India

Opinion

Rajiv kumar, DG, ‘FICCI’-leasing land from

farmersRather than outrightpurchase might workBetter

Adi Godrej President, ‘CII’-Digitization of land records and zoning

ofland for clear mapping, identification,segregation and systematic developmentof land for industrial use. Solatium is

tobe retained; it could be reduced to

30%.suitable compensation packages shouldbe laid down for the losses of affectedFamilies

Rajesh Bhati, Cord. ‘National Capital

Territory’-providing a better royalty or

arental can be considered

alongwith the possibility of a

permanentstake in industrial projects

National Capital Territory, Delhi

Land acquisition policy for economic growth and developmentQ.1 What problems should be focused in land acquisition policy? Q.2 What can be learnt from the West Bengal experience? Q.3 To what extent the new policy is a step ahead in the right

direction? Q.4 Do they have serious deficiencies? Q.5 If so what kinds of alternative policy approaches ought to

be adopted?

Source = www.ideasforindia.in

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Formulating a policy for India3 principal modifications1. Land valuation and Compensation2. Modifications in Eminent domain clauses of LAA 19843. Special measures for resettlement and rehabilitation of

tribal communities.

Policy measures based on economic principles The current price of land is unlikely to reflect the future price of land before an

industrial project is set up Those who value their asset at more than the market price and therefore will naturally

be unhappy if compensated at the market price State governments are anxious to raise industrial growth rates for both political and

economic reasons—government revenues, employment generation and the tempt of unlawful kickbacks from awarding industrial contracts and concessions

Strengthening compensation policy has the side benefit of inducing additional agricultural investments. State governments would be induced to improve local infrastructure such as water supply roads, and electricity

Source = www.ideasforindia.in

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Singur (survey of households)Heterogeneity of land valuations The compensation offered govt. was avg.

equal tothe market values, Yet 1/3rd of owners refused

thecompensation and opposed the land acquisition.

1. Did not include information relevant to assess market values of individual plots, multi-cropped lands, irrigation, fertility status, connectivity

2. Households for whom agriculture played a larger role income security were less likely to accept

3. complementarities of land with farming skills that are non-transferable

4. personal characteristics of landowners 5. Out-of-date Govt. land records since last

land surveys were carried out prior to Independence

6. different communities can bid for the factory to be located in their respective regions

7. Looked for alternative ways to incorporate concern for financial security, time preference, and pattern of skills

8. process matters with the legal framework. state govt. did not consult the local community in choosing the area for the Tata Motors factory

Formulating a policy for India

Source = www.ideasforindia.in

New policy measures

Compensation affects growth & economic efficiency

cost of land acquisition acquiring land

will slow down the pace of industrialization

1. true market value of land depends on type of soil, irrigation, elevation, and location

2. Land a source of income; valuable security against risks of high inflation or recession, can serve as guarantee for bank loans

3. special skills in farming which are of no use in other occupations

4. a source of social status, prestige or ancestral identity,

5. An auction-based approach might be the solution. admin expertise can help conduct auctions decentralizing responsibility to local bodies will help minimize the sense forced acquisition

6. The industry could set a reserve price and min. quantity of land needed

7. well-informed and flexible way of compensation can ensure fast industrial growth along with an fair distribution of its benefits

8. Local communities are consulted and involved in selecting areas to be acquired,

Singur

Thank Thank YouYou