Land Acquisition Market Structure and Regulation of Infrastructure Sector MBA II Year Elective Ist...

Land AcquisitionMarket Structure and Regulation of

Infrastructure SectorMBA II Year Elective

Ist Term 2010-11

Dr. A. B. RastogiNMIMS

Land – A Critical Resource for Infrastructure

ABR Class ppt-MSRIS-Land Acq 13-2010-11

Cause of Infrastructure Project Delays• 70% of 190 delayed projects (Mint 18th March 2009)

• IR – 60 projects• NHAI – 40 projects• Power projects – 28 projects

• CII survey• 81% respondents – land acquisition is the most important

impediment

• Land• Limited supply• Eminent domain powers

– The state can acquire land for public purposes without the landholders’ consent

• Urban land constraints – Plagued by numerous regulations


Land Markets in India

• Characteristics of land– Unique physical features of each piece– Absence of mobility– Widespread emotional attachment

• Needs appropriate legal and regulatory framework– So far, limited to computerization of revenue records– Improvement of registration records and proccesses

• Reforms required in land registration, record keeping and land rights


Land Acquisition : Policy and Processes

• Land Acquisition Act 1894– To acquire land for public purposes

• Amended in 1962 to allow acquisition for companies

• Public purpose is not well defined• Impact on PAPs• Post 1991 worsened as govt. acquired land for the

private sector– Eminent domain vs undermining of private property rights

• Land Acquisition in concurrent list– Many states have their own procedural laws– NHs have separate law


Compensation and R&R

• Compensation for– the loss of land and associated assets– loss of livelihoods of PAPs– expeditious settlement of the

rehabilitation process

• LAA 1894 is silent on R&R

• National Policy of Rehabilitation and

Resettlement 2007


The Land Acquisition (Amendment) Bill 2007

• Redefines ‘public purpose’– Only strategic defence purposes,

infrastructure and contiguity purposes included

• >70% for a publically useful project is included

• ‘Person’ includes any company, body or association of individuals

• The bill was introduced in the parliament in February 2009, but failed


Land Acquisition Experiences• Main issue

– diversion of forest land for developmental activities

– Land-for-land is a contentious issue• Experience of DIAL

– GMR provided assistance for transportation facilities and jobs

– Group’s CSR arm played a key role• provided medical facilities• and basic amenities


Land Acquisition in Urban Planning• Supply constrained due to excessive

regulatory requirements– gave enormous power to state to intervene in

urban land market– cause of haphazard sprawl– opportunity for rent seeking

• Urban Land (Ceiling and Regulation) Act 1976 and Rent Control Act reforms (JNNURM)– Gujarat model – Development Plan – Town

Planning Scheme (DP-TP mechanism) http://www.gisdevelopment.net/application/urban/products/mi03215b.htm

http://www.gisdevelopment.net/application/urban/products/mi03215b.htm


Leveraging Land for Development• Betterment levy• Impact fee• Experience of IRs

– 1/4th of 4.3 lakh hectares land owned by railways is lying vacant

– RLDA – afforestation etc….• Experience of China• Experience of HK

Land Acquisition for NHs

Legal framework Reasons for delay Role of PIU/ Project Managers


Characteristics of Highway Projects

• Linear land acquisition, displacement• Cuts community, land and property• Involves multiple States and agencies• Displaces squatters• Affected groups heterogeneous

– Vendors, shopkeepers most affected– Agricultural PAPs partially impacted

(especially in widening or rehab work)• Strong positive association


Land Acquisition- Legal Framework

• Governed by NH Act, 1956 • Key steps as per NH Act, 1956

–Preliminary survey to identify land–Notification- Intention to acquire land–Appointment of competent authority–Receipt and hearing of objections–Compensation determination–Payment


Land Acquisition- Timeframe

• About 12-18 months• Delays depending on

– State of land records– Analysis of alternatives– Competent authority (CA) support– Land disputes– Land consolidation– Pace of civil courts settling disputes– Complex disbursement procedures– Arbitration process


Role of PIU/ Project Managers

• Collaborate with DPR consultants• Draft notifications as per NH Act• Coordinate with various authorities• Submit monthly acquisition data in format• Report status to HQ• Ensure settlement of compensation claims

and declaration of award• Complete mutation• Facilitate private negotiations


What to consider?

• All alternatives at feasibility stage• Land, R&R requirement for each

alternative • Match of acquisition plan with ground

reality• Appointment of arbitrators • Challenging arbitrator awards, if needed• Extra land acquisition to return later?


Thank you


Avoid political grandstandingWe Need a Humane Land Acquisition Act

The Economic times (10-Aug-09)• FINANCE minister Pranab Mukherjee was

justified in charging UPA ally, Trinamool Congress (TC), with political grandstanding as the latter needlessly went to the media seeking more safeguards in the amendment to the Land Acquisition Act that the government had sought to introduce in Parliament last week. In competitive politics, leaders often speak to each other through the media. However, on this occasion, the Congress leaders had conceded


Avoid political grandstanding(cont..)

• that further amendments could be effected once the Bill was introduced and referred to a Standing Committee of Parliament . TC should have accepted this reasonable offer. But it chose to create some political drama by insisting the Bill should not be introduced at all before certain amendments were made. The Bill had gone through a lot of discussion in UPA’s previous tenure and was introduced in the last Lok Sabha. The Bill has to be reintroduced in


Avoid political grandstanding (cont..)

• the current Lok Sabha as it could not be passed in the previous one. The resettlement and rehabilitation legislation is also being introduced simultaneously with the land acquisition Bill.

• The TC wants major amendments in the land acquisition Bill. It wants a fresh provision enabling the land owners to have a legal right to buy back their land if the proposed industry does not take off within a stipulated period of time. It says there should be no government



• involvement in land acquisition. The current Bill allows the government to acquire up to 30% of the land to enable contiguity. Mamata Banerjee also wants no industry to be allowed in fertile agriculture land. If all these amendments are taken together, no acquisition will be possible. It would be impossible to acquire land with no government involvement at all. The bulk of the land acquisition can be through direct negotiation with the farmers. But some



• government role will be necessary to deal with contiguity issues. Also, a proposed industry may get delayed for reasons beyond the promoter’s control. In that event, is it practical to legally mandate return of the land to the farmers At the political level, these amendments will now be discussed with Congress president Sonia Gandhi. We need a humane land acquisition Act which does not throw the baby out with the bath water.

Land Acquisition Market Structure and Regulation of Infrastructure Sector MBA II Year Elective Ist...

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