Land law: Exemptions extended to private firms
Private entities are now exempt from the requirement of obtaining prior consent of at least 80 per cent of the affected families
Feb 05, 2015
Source : Business Standard

 

New Delhi: The National Democratic Alliance (NDA) government's land ordinance has done away with consent and social impact assessment for acquisition of land by the private sector for a vast array of projects, in addition to exemption from these for projects operating through public-private partnerships (PPPs).

Projects that fit into one of the broad categories mentioned in the ordinance and owned by private entities will neither require consent from the affected families nor need to undertake social impact assessment when acquiring land, as is the case with their equivalents in PPP mode or by a government agency.

Since the ordinance was issued, many commentaries and reportage has missed the point that the government has provided an exception to the United Progressive Alliance government's 2013 land acquisition law not only for public sector and PPP projects, but also for a vast array of private projects.
 

THEN & NOW
  • The 2013 law required consent of affected families. In case land was acquired by a private company, consent of 80% of the people was required; for PPPs, this was 70%
  • The land ordinance of Dec 30, 2014, effectively exempted private entities from securing prior consent of at least 80% of the affected families


The 2013 law had two critical provisions: One required that the acquiring entity secure the consent of the affected families. In case the land was being acquired by a private company, the consent of 80 per cent of people was required. In the case of PPP projects, this was set at 70 per cent.

But the land ordinance of December 30, 2014, introduced a caveat to the 2013 law, stating, "Provided also that the acquisition of land, for projects listed in section 10A and the purposes specified therein, shall be exempted from the provisions of the first proviso to this sub-section." The first proviso refers to the need for consent in the 2013 law.

By inserting this provision, the ordinance effectively provided carte blanche to the private sector. Private entities are now exempt from the requirement of obtaining prior consent of at least 80 per cent of the affected families though the ordinance does not explicitly state so. An assessment by PRS Legislative Research, a think tank that reviews legislative and other government processes, affirmed consent was no longer required for private projects.

Senior officials involved in drafting the ordinance also confirmed this to Business Standard.

The land ordinance has similarly provided an exception to the private sector when it comes to undertaking social impact assessments.

The list of projects that have been exempted from requiring consent and the need to carry out social impact assessment range across those vital to national security or defence, rural infrastructure or electrification, affordable housing, industrial corridors, and infrastructure and social infrastructure projects.

The last two categories comprise an exhaustive list of industries that include hospitals, ports, special economic zones, tourism facilities, cold chains, fertiliser factories, ports, roads, airports and urban public transport.

But the decision to do away with the social impact assessment for all projects under these categories is likely to create further ambiguity on the issue of rehabilitation and resettlement. Officials in the government admitted without any provision for social impact assessment, the rehabilitation and resettlement of the people affected by land acquisition would be largely left to the district and state administration.

The social impact assessment was meant to identify the people and their assets impacted by the acquisition of land. Based on this assessment, they were to be provided not only compensation but also packages for rehabilitation and resettlement. The assessment was to be carried out by an independent party, not the district administration and project developer. This would have been shared with the public before seeking consent for acquiring the land.

While there were various views on the need for social impact assessments, the ordinance, by exempting the public and private sectors, has effectively turned the clock back. It has returned the power of discretion back into the hands of the local administration, in line with the colonial-era land acquisition law of 1897.

After the Congress, the Aam Aadmi Party and the Left attacked the NDgovernment for the land ordinance, Prime Minister Narendra Modi on February 3 defended it. Speaking at a political rally here, he said, "I want to tell farmers only as much land will be acquired as is needed for your welfare. Land will not be used for the rich."

Earlier, Congress leaders such as Jairam Ramesh and P Chidambaram had criticised the ordinance. "The 2013 Act had three main pillars - consent of landowners, social impact assessment and compensation and relief and rehabilitation. Now, for private and PPP projects, the first two pillars have been virtually destroyed," Ramesh had told Business Standard. "I dare say every significant case of land acquisition can be brought within one of the categories in section 10A and, thus, be spared social impact assessment. That is the terrible mischief wrought by the ordinance," Chidambaram had written.

The ordinance also corrected one of the legal loopholes created by the 2013 law. The NDA substituted the words "private company" with "private entity" to require that the Act, as well as its exemptions to consent and social impact assessment, now be extended to all private entities. According to the Companies Act, 2013, a 'private company' means a company with a paid-up share capital of at least Rs 1 lakh. It excluded other entities such as proprietorships, partnerships, corporations and non-profit organisations. Now, all these forms of private enterprise will also be exempted from social impact assessment and the consent clause if their projects fall in the numerous categories of projects listed in the 2013 law and the 2014 amendment.

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