Land Acquisition Policy


There has been a lot of hue and cry over the land bill these days. Even though the majority of the stake holders are farmers but I believe that the issue is generic one and is not confined to some category of people or nation but to everyone everywhere. The basis to the whole argument is who has right over the land one possess and what if he wants to keep the land and not sell it.


There was a fundamental right, “Right to property” given to citizens to India that nobody including state could takeover ones land without his exclusive consent except in few cases like national security etc. but which was later withdrawn as it was impeding a lot of projects where people weren’t ready to leave the land due to financial or emotional reasons. During the UPA tenure, the government passed a bill which virtually stalled the acquisition of land and made it almost impossible to buy land. Now recently, the new bill has been suggested by NDA government which has been opposed from many parties both inside and outside the political arena. The bone of contention is five main issues which are kind of fundamental to all kind of land acquisitions all over. These are consent, compensation, social impact, rehabilitation and resettlement.

Compensation and Consent

Let say someone wants to acquire 100 pieces of land from 100 land owners which he might need it for developmental, business, social or security purpose and offer some price for it. The first trouble would be whether a landowner wants to give up his land as he might have some emotional attachment to it or his life be dependent on it. Second trouble would be that even if he agrees to sell his land then how much compensation he would agree on and that too would vary from landowner to landowner. Besides there is another problem that if some landowner come to knowledge that the other landowners were able to sell their land similar to his at better price then he’ll feel cheated.

Even though these two variables, compensation and consent appear different and unrelated but they could be solved together through a solution based on ultimatum theory wherein all the landowners would vote on the price per unit of land in a transparent and secret ballot at which they want to sell their land and the price at certain say 85% of the voted price on distribution curve should be treated as “demand price”. Similarly the land buyer will quote his price per unit area called “offer price” which will also be kept secret and both offer price and demand price will be revealed simultaneously.  If the offer price found out to be greater than demand price then the offer price be treated as “land price”. If the offer price found out to be smaller then the buyer could be given an option to either to leave the deal or accept the deal at the land price equal to demand price plus twice the difference between demand and offer price.

The above solution takes care of both variables. Everyone has their own sense of value of the thing one possess and it is generally valued higher by possessor according to the theories of psychology. So market do decide the market price of certain commodity at a certain time and place. But whatever one feels regarding the value of certain thing, that commodity is sold only when both buyer and seller agrees on a common price. So idea is that everyone vote on the price however low or high that is, at which he wants to sell his land which will roughly shape like bell curve on a price versus number of people graph. One who is more dependent or attached to his possessions will demand higher price than others. And the price which is equal to more than a price demanded by certain percentage of people will be considered as demand price and if deal finalizes then everyone would be compensated equally.

Consent Percentage

The percentage mentioned earlier has a special implication and is also worth the topic of debate. In an ideal scenario when people are fair and nothing is political then it could be 100% but in real world that is never the case, hence is the threshold value. Some people due to influence from opposing parties, political reasons or maligned foreign influence would try to subvert this whole acquisition exercise by demanding inexorably high compensation amount in order to undermine the deal. So there comes this cap. In addition to that, for some projects like security projects, the land acquisition is desired even at the expense of sidelining certain percentage of people. So this cap could vary from project to project. Like for defense, security, archaeology and natural resources, this cap could be limited to 51% and for others it could be as high as 80-90%. But one thing to understand here is that this cap would only increase or decrease the amount spent on land acquisition as if one is ready to pay a quite excess amount of money then any piece of land could be bought anywhere. So except for the four mentioned areas, it is not advisable to lower the limit and in ideal societies this limit would be quite high which could however be lowered during emergency times.

Social Impact Assessment and Other Issues

Additionally once fair compensation based on consent is given then there is no additional need or obligation from buyer side to provide mandatory jobs or reservations or rehabilitation and resettlement etc. Everyone is free to quote the amount including everything one values including rehabilitation cost etc. in their demand price. Additionally all additional clutter in the name of benefits like transport charges etc. should be absent as the same would be included in the demand price and will thus improve efficiency and reduce red tape in land acquisition. Such kind of rules seldom fulfills the purpose and often increases the overall corruption in the system and unnecessary wastage of resources to check the authenticity of those claims.

Social Impact Assessment, the study in which it is assessed that what impacts does land acquisition has on other non land owners, seems useless as only owners of the lands have rights over their property and nobody should be concerned about what one is doing with his land as long as he is not interfering with others well being and it is good that the same is scrapped but nevertheless Environmental and Ecological Impact Assessment should be done properly and strictly.


I tried presenting here the generic template to acquire as much as desired land anywhere for any purpose by anyone with the issues involved. This policy could be applied uniformly to all kind of land deals small or large, private or public or PPP. Additionally I believe that the government should work towards digitization of whole land of India and their owners which will greatly decrease corruption, crime, inefficiency etc. Also I believe that the government should greatly decrease the land transfer taxes which will boost business sentiments and ensure that only digital stamp is used along with all the transaction being done electronically between the accounts which are linked to PAN card of their owners.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s