Land Acquisition in India - An Economic Perspective

Abstract

Land acquisition is a process of making land available in market for the purpose of development. The process of land acquisition is one of the important factor constraining the development and especially infrastructure development of our nation. We have tried to analyses the core problems of land acquisition in India. We argue that adequate compensation should not only be in cash but should also address other consequences resulting from the displacement of inhabitants. There is also a need to redefine public purpose and this should be done ex-ante, to allow market forces to play a corrective role and thus lead to accurate valuation of the land. The reforms were well overdue before the government came out with new bill on land acquisition. We present our critique of this new bill and further elaborate on certain issue like compensation, rehabilitation& resettlement, and public purpose. On the issue of public purpose, the new act has attempted to make the concept less vague and drafted a clear legal framework to look into the details of present and proposed land use. We also review the land acquisition techniques and compensation mechanism followed across a variety of other countries with a view to position the Indian experience within an international context. Lastly we present our take on the whole system with a few suggestive improvements. Over the course of the project, we completed a field study of the Yamuna Expressway, Uttar Pradesh to better understand the problems and get a take on the perspectives of various stakeholders.