Indian Industry and Social Activists Battle Over New Land Acquisition Law

Last month, the Indian Parliament devised legislation to replace the archaic Land Acquisition Act of 1894, the British colonial-era law that dictates terms for government acquisition of private land. The new law, which would be renamed The Right to Fair Compensation, Resettlement, Rehabilitation and Transparency in Land Acquisition Act, aims to address India’s chronic land disputes between developers and local communities (which I addressed in part in a previous blog on coal energy in India). The legislation is currently being reviewed by a Cabinet committee due to concerns expressed by several Cabinet ministers that the conditions stipulated for land acquisition are too steep for industry.

Industry interests hope that the new law will streamline the existing land acquisition process and resolve ongoing delays to project development. The legislation under negotiation would allow not only government but also private companies that provide “public” services to acquire land for industry and infrastructure projects, provided that they (1) obtain consent from at least 80 percent of affected landowners, (2) provide compensation at two to four times the market value for rural land and two times the market value for private land, and (3) assist displaced persons with resettlement.

Despite the more concrete procedure for land acquisition outlined in this draft legislation, some business groups, including the Confederation of Indian Industry, complain that the provisions will increase costs to industry and make some projects unviable. It is with these industry interests in mind that the Cabinet committee is reviewing the legislation.

Several massive planned energy and infrastructure projects are currently waiting for the new law to be implemented in order to move forward with acquiring the necessary land. These include steel plant complexes in the states of Odisha and Karnataka that would include a combined 2,750 megawatts of coal power capacity. Plans by Coal India—the state-owned coal mining company responsible for over 80 percent of India’s coal production—to increase coal mining operations in Chhattisgarh also depend on expanding land holdings in that state.

The new Land Acquisition Law will affect decisions on the expansion of coal mines in Chhattisgarh (Source: Reuters).

Streamlining land acquisition for industrial purposes will not only further facilitate this type of large-scale, capital-intensive, fossil fuel-driven development that India is aggressively pursuing, but could also impact the future direction of renewable energy development. India’s National Solar Mission, which aims to greatly expand solar energy capacity through 2022, has been widely criticized for focusing on centralized generation projects that require large land areas, rather than smaller-scale distributed solar generation that could deliver the greatest benefits to poor and rural populations that currently lack access to modern energy services. In addition, distributed generation would provide rural communities with sustainable energy and improved livelihoods without pushing them off their land.

Government agencies in India already have a troubled track record of fast-tracking project permits in favor of corporate interests, despite violations of environmental laws and community land rights. Last year, Amnesty International drew attention to the failures of the state of Odisha to protect land rights and enforce national environmental laws and coastal regulations in order to attract the POSCO company to construct a steel plant there. Despite official investigations that identified these violations, the Indian Ministry of Environment and Forests is allowing the project to proceed. In such cases, government officials desperate to attract capital investment and appear friendly to corporations turn a blind eye to community protests and sidestep procedures intended to safeguard local livelihoods and the environment.

Social activists in India continue to protest the legislation, despite its attempts to ensure adequate compensation and resettlement assistance to persons and communities displaced by industry and infrastructure. At stake is the larger question of India’s future development path: Will it continue on a trajectory of destructive, land- and capital-intensive projects driven by large corporations, or will it pursue a path that protects the environment and ensures dignity and livelihood security to its people?

Shakuntala Makhijani is a Climate and Energy Research Associate at the Worldwatch Institute.

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