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India's land acquisition policy

Aug 04, 2011

The Indian Ministry of Rural Development introduces its new draft Land Acquisition And Rehabilitation & Resettlement Billwhich is a policy framework to balance between land acquisition for industrialisation with the concerns of those who depend on that land for livelihood.

The new draft Land Acquisition and Rehabilitation & Resettlement Bill of 2011 which will go through a cabinet vote very soon, has been designed to address the concern of balancing the need for land to support rapid industrialization on one hand, and the needs of the people who depend on it for their livelihood. 


India is the third largest economy in the world today, but it faces an urgent need for growth through industrialisation, especially through manufacturing. This puts the nation in need for land for a number of purposes from fuelling the inevitable process of urbanisation and greater industrialisation, to a variety of 'public purposes'.

The nation has had a land acquisition act since 1894 which as over the time, seen quite a few amendments. But the recent heightening of public concern over land acquisition issues and the absence of a comprehensive law covering the issues of resettlement, rehabilitation and compensation of livelihoods, has highlighted the need for a wholesome law.

The bill states the legitimate reasons for land acquisition as the above mentioned ones and additionally defines the purview of the term ‘public purposes’ as the following:

1. Strategic purposes: e.g., armed forces, national security;

2. Infrastructure and Industry: where benefits largely accrue to the general public

3. Land acquired for R&R purposes

4. Village or urban sites: planned development -residential purpose for the poor and educational and health schemes

5. Land for private companies for public purpose;

6. Needs arising from natural calamities.

Rehabilitation and Resettlement

It has been observed in the past that the rehabilitation and resettlement aspect is frequently neglected once the acquisition is  over, leading to widespread resentment and rebellion from the ‘affected families’, who are basically those people who either lose the and that they own, or livelihood that they had derived from the acquired land. The current draft necessitates the application of its rehabilitation and resettlement requirements if the land acquired by private companies exceeds 100 acres.

The new bill states that the Government can either acquire land for its own use or for the use of private companies for stated public purpose. But the draft makes it clear that no acquisition can take place until 80% of the project affected families give their consent to the acquisition. Also, the government can make no acquisition of multi-cropped or irrigated lands or even land for the private purposes of private companies.

The rehabilitation and resettlement requirements which are a major highlight of this draft included a number of minimum entitlements making a special provision of scheduled castes and scheduled tribes.

Compensation and benefits

As per the compensation package, the award amount paid for the land acquired in case of urban areas should be not less than double the market value determined, and not less than six times in case of rural areas.

For landowners the entitlements include a subsistence allowance of Rs. 3000 per month per family for 12 months along with Rs. 2000 per family as annuity for 20 years, with the use of appropriate indexes for inflation. The loss of a house has to be compensated with the building of a new one adhering to some minimum size requirements. Entitlements for transportation and employment provisions also need to be guaranteed. An unemployment benefit has to be paid if not even a single member of the family is given employment opportunities. For those who lose their livelihood, the bill states similar entitlements.

Special provision for SCs/STs

There are some special provisions for STs in the bill which stipulate a guarantee of one acre of land to each ST family in every project, and a one time financial assistance of Rs. 50,000. ST families settled outside the district shall be entitled to an additional 25% rehabilitation and resettlement benefits. Payment of one third of the compensation amount at very outset to ST families is also specified in the bill.

The bill specifies the guarantee of providing 26 infrastructural amenities like schools, hospitals and so on to all those who are displaced in the process of acquisition.

Consultations with Gram Sabha

The institutional structure that the bill aims to create includes three main stages. The first one involves the formulation of the acquisition proposal, followed by a social impact assessment conducted by the appropriate government, which is meant to review all the costs and benefits of the acquisition. This stage also includes gaining consent to go ahead with the project. Once that is available on consultation with the ‘gram sabha’ or village council, there is supposed to be an official publication and notification of the rehabilitation and resettlement scheme to be offered.

The land has to be returned to its original owner if it is not used in 5 years for the purpose for which it is acquired and only one-fourth of the award amount for the land acquired is  provided to the owner in that situation.

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