India Markets closed

Land Acquisition Bill: Things you should know

Land Acquisition Bill: Things you should know

The Lok Sabha passed the critical Land Acquisition Bill, last week.

The Land Acquisition, Rehabilitation and Resettlement Bill 2011 is now called the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Bill, 2012. It replaces an 1894 British law.

What does the bill do?

The Bill aims to bring transparency in the land acquisition process and help provide sufficient compensation and rehabilitation to the owners of the land and those affected by the acquisition. Rural Development Minister Jairam Ramesh, who steered the bill in Parliament, said: "We have moved 158 amendments, of which 28 are crucial... These amendments are to give farmers, tribals and scheduled castes their due." Protests over land acquisition have stalled infrastructure and development projects across the country.

Why is this change big?

‪The Bill replacing an archaic legislation is seen as populist as it helps the poor landowners and is perceived to be anti-business.‬ It will allow farmers to get at least double the value of their land as compensation, while helping revive stalled projects. Private businesses will approval of at least 80 percent of landowners before seeking the government’s intervention to evict the remaining 20 percent. The law also makes social impact assessment of land acquisition compulsory.‬

Who is upset?

Industry bodies have claimed that high compensation and time - consuming‬ process will hurt already stalled projects and profitability. India's fractured land ownership means approvals can be delayed. The Bill will affect competitiveness of the Indian industry and render projects unviable, as cost of land acquisition is likely to increase by 3 - 3.5 percent, according to CII.

Land Bill at a glance:

Land can be acquired for: Infrastructure projects, industrial corridors, mining, investment and manufacturing zones, sports, healthcare, transport projects and space programmes.

The Approval Process:

  • Approval of 80% of land - owners for private projects
  • Approval of 60% of owners of PPP or public private partnership projects

The Process

Social Impact Assessment: land acquisition will require the impact assessment to be approved by an expert committee. The acquisitions will then have to be approved and notified by the state government. The state will vet land records, hear the opposing side view, carry out a rehabilitation study and issue final notification for the acquisition. Process has to be completed within 4 years.


Rate of land: The higher of the circle rate of land in the area, average of the top value of transactions in the area or the rate at which a private company or PPP acquires land is taken.

Compensation rate: Four times the market value of land acquired in rural areas and two times in urban areas


Those ‘affected’ to get a house, a one time allowance or job. Payment of Rs 5 lakh or annual payment (adjusted to inflation) of Rs 2000 a month for 20 years

Retrospective enforcement

The new rules will apply retrospectively to cases where no land acquisition award has been made, besides those where land was acquired 5 years ago but no compensation was paid or no possession took place.

The Bill now moves to the Rajya Sabha for approval and then will seek the nod of the President to be enacted into a Law.

If the Land Belongs to No One, Does It Belong to the Drones?