The new land acquisition Bill is likely to replace a serious political problem with a serious economic one
India’s land acquisition system is at the crossroads. The law that was used to acquire land, dating back to the colonial times—the Land Acquisition Act of 1894 (amended in 1962 and 1984)—can no longer do the job because of widespread resistance. Many important state and business personalities consider land acquisition to be the “biggest problem" in India’s development path. A new Land Acquisition, Rehabilitation and Resettlement Bill (LARR) was drafted in mid-2011, and in May 2012 the parliamentary standing committee report (PSCR) on LARR was made public. At the moment of writing this, the Union Cabinet is discussing the final version of the Bill—incorporating some PSCR recommendations and ignoring others— to be taken to parliament. Media reports suggest that there is significant dissent within the Cabinet, especially from the ministers for commerce, urban development, highway and surface transport, and civil aviation. This dissent is needed because there appears to be little awareness in any of the approaches taken so far of the fundamental changes in India’s land markets and their consequences. As a result, the final Bill, as it stands, is likely to replace a serious political problem with a serious economic one.
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