Right to Fair Compensation and Transparency in LARR Act 2013

The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (LARR Act) is a law in India that regulates the process of land acquisition for public purposes, aiming to provide fair compensation and ensure transparency in the process, as well as provide for the rehabilitation and resettlement of those affected by land acquisition. It replaced the Land Acquisition Act of 1894, which was criticised for its lack of provisions for fair compensation and rehabilitation.
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5 min
24 February 2024

The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation, and Resettlement - LARR Act 2013 is a law implemented in India to ensure that the process of acquiring land for developmental projects is transparent and fair to all parties involved. The act is aimed at protecting the rights of landowners and ensuring that they receive fair compensation for their land. The LARR Act 2013 replaced the Land Acquisition Act of 1894, which was considered archaic and did not adequately protect the interests of landowners. In this article, we will discuss the LARR Act of 2013, its objectives, key provisions and updates, impact, challenges and controversies, case studies, and future outlook.

History of the Land Acquisition Act, 2013

The Land Acquisition Act, 2013, officially called the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, was brought in to replace the outdated 1894 law. Its aim was to create a fair, humane, and transparent process for acquiring land for development while protecting the rights of landowners and affected families. The Act stresses proper consultation, rehabilitation, and fair compensation. It was passed after long discussions in Parliament and became effective from January 1, 2014. Later, in 2015, certain amendments were introduced to change or relax some provisions of the 2013 Act.

Timeline of the Land Acquisition Act

  • 7 September 2011: Bill introduced in Lok Sabha.

  • 29 August 2013: Approved in Lok Sabha.

  • 4 September 2013: Passed in Rajya Sabha.

  • 27 September 2013: Received President’s approval.

  • 1 January 2014: Act came into effect.

  • 30 May 2015: Amendment Ordinance promulgated by the President.

What is the LARR Act 2013 (Land Acquisition, Rehabilitation and Resettlement)?

The Right to Fair Compensation and Transparency in LARR Act 2013 is a law enacted by the Indian parliament to regulate the process of land acquisition for public purposes. The act was introduced as a response to concerns about the forcible acquisition of land from farmers and rural communities without adequate compensation and rehabilitation measures. The LARR Act aims to balance the interests of the government, landowners, and commercial users by providing a transparent and fair process of acquisition.

Objectives and scope of the LARR Act 2013

The objectives of the LARR Act are to ensure that the process of land acquisition is done in a just and transparent manner, and that the landowners receive fair compensation and rehabilitation and resettlement measures. The act covers the acquisition of land for public purposes, which includes the construction of government buildings, roads, railways, airports, and other infrastructure projects.

Key provisions of the LARR Act 2013

The LARR Act contains several key provisions that aim to protect the interests of landowners and ensure a fair process of land acquisition. Some of the most important provisions are as follows:

  1. Consent of landowners: The act requires that the consent of at least 70% of landowners be obtained before the acquisition of land for public purposes. In the case of public-private partnerships, the consent of at least 80% of the landowners is required.
  2. Compensation and rehabilitation: The act provides for fair compensation to landowners, which is at least twice the market value of rural land and at least four times the market value of urban land. The act also provides for adequate rehabilitation and resettlement measures to be taken before the acquisition of land.
  3. Social impact assessment: The act requires that a social impact assessment be conducted before the acquisition of land. The assessment evaluates the potential impact of the acquisition on the local community and recommends measures to minimise the adverse impacts.
  4. Return of unutilised land: The act provides that any land acquired but not utilised for five years should be returned to the original landowners or the state government.

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Key changes proposed in the 2015 Bill compared with provisions of the 2013 Act

Issue

2013 Act

2015 Bill

Consent

No consent for government projects. 70% consent needed for PPPs, 80% for private projects.

Five categories exempt from consent: defence, rural infrastructure, affordable housing, government-led industrial corridors (1 km around road/railway), and infrastructure including PPPs on government land.

Social Impact Assessment (SIA)

Mandatory except in urgent cases or irrigation projects with EIA.

Same five exempt categories may skip SIA. Government must ensure minimum land is acquired.

Irrigated multi-cropped land

Cannot be acquired beyond limits fixed by states.

Five exempt categories allowed. Government must ensure land taken is minimal.

Compensation and R&R under 13 other Acts

13 laws excluded but had to align by Jan 2015.

Provisions already aligned with 2013 Act.

Offences by Government

Department head held guilty unless due diligence shown.

Deleted. Prosecution of government staff needs prior sanction.

Retrospective application

Applies where awards are 5+ years old, but possession not taken or compensation unpaid.

Time calculation excludes periods of stay orders, tribunal rulings, or where compensation is deposited but unpaid.

Return of unutilised land

Must return after 5 years if unused.

To be returned after later of 5 years or project-specified period.

Change from ‘private company’ to ‘private entity’

Defined as per Companies Act or Societies Act.

Broader term ‘private entity’ includes partnerships, proprietorships, corporations, NGOs, etc.

Rehabilitation and resettlement award

Employment for one member of affected family.

Clarifies inclusion of farm labourers’ families.

Authority hearings

Appeals before LARR Authority.

Authority hearings to be held in the district of acquisition.

Survey of wasteland

No provision.

Requires government survey and records of wasteland.
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LARR Act 2013 - Amendments and updates

Since its implementation, the LARR Act has undergone several amendments and updates to address concerns and improve its effectiveness. Some of the main amendments and updates are as follows:

  1. Amendments in 2014: In 2014, the act was amended to remove the requirement of social impact assessment for certain projects, such as defence and rural infrastructure. The amendment also exempted irrigation projects from the requirement of seeking consent from landowners.
  2. Amendments in 2015: In 2015, the act was amended to include provisions that would provide for higher compensation to farmers in case the land acquired is sold later at a higher price.

Impact on Land acquisition process

The LARR Act has had a significant impact on the process of land acquisition in India. Before the act, land acquisition was often done without the consent or adequate compensation of landowners, resulting in protests and legal disputes. Since the implementation of the act, the process of land acquisition has become more transparent and fairer, with landowners receiving adequate compensation and rehabilitation measures. However, the act has also led to delays and increased costs for development projects, which have had a negative impact on the economy.

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LARR Act 2013 - Challenges and controversies

Despite the positive impact of the LARR Act, there have been several challenges and controversies associated with its implementation. Some of the main challenges and controversies are as follows:

  1. Opposition from industry and political parties: The LARR Act has faced opposition from industry and political parties who argue that it has led to delays and increased costs for development projects.
  2. Inadequate compensation and rehabilitation measures: Some critics argue that the compensation and rehabilitation measures provided under the act are inadequate and do not adequately protect the interests of landowners.
  3. Disputes over land ownership: Land ownership disputes often arise in India, which can lead to delays and legal challenges in the land acquisition process.

LARR Act 2013 - Case studies and examples

There have been several case studies and examples of the impact of the LARR Act on land acquisition in India. One prominent example is the case of the Navi Mumbai international airport, which faced delays due to land acquisition issues. However, after the implementation of the LARR Act, the project was able to move forward with a transparent and fair process of land acquisition.

The improved land acquisition process has made property development projects more reliable, creating better opportunities for homebuyers. Whether you're looking at new developments or established properties, securing the right financing is crucial. Check your eligibility for home loan from Bajaj Finserv. You may already be eligible, find out by entering your mobile number and OTP.

Other topics you might find interesting

Transfer of Property Act

2013 Land Acquisition Act

Societies Registration Act 1860

Gratuity Eligibility

Section 54 of the Income Tax Act

Societies Registration Act

Rera Act

Payment of Gratuity Act 1972

Registration Act 1908

Comparison with previous legislation

The LARR Act of 2013 replaced the Land Acquisition Act of 1894, which was considered archaic and did not adequately protect the interests of landowners. The LARR Act introduced several new provisions to protect the rights of landowners and ensure a fair process of land acquisition. The act also required the consent of landowners before the acquisition of land, which was not a requirement under the Land Acquisition Act of 1894.

Future outlook and implications

The LARR Act has had a significant impact on the process of land acquisition in India. While the act has led to delays and increased costs for development projects, it has also ensured that landowners receive fair compensation and rehabilitation measures. The future outlook of the act depends on whether it will continue to strike a balance between development and the rights of landowners. The implications for the economy and development projects in India will also depend on how effectively the act is implemented and whether its provisions continue to be updated to address emerging challenges.

In conclusion, the LARR Act 2013 has introduced several new provisions to ensure a fair and transparent process of land acquisition for public purposes. The act has faced challenges and controversies, but its implementation has resulted in a more equitable process for landowners and commercial users alike. The future outlook of the act depends on its effectiveness in addressing emerging challenges and continuing to balance the interests of all stakeholders.

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Frequently asked questions

What is Larr Act 2013 in land law?

The LARR Act 2013 is a law that regulates land acquisition in India. It was passed to replace the outdated Land Acquisition Act of 1894.

Who are the affected families in the LARR Act 2013?

The affected families in the LARR Act 2013 are those whose land is being acquired by the government or any other agency for public purposes. These families are entitled to fair compensation, which is calculated based on the market value of the land and other factors.

What are the main points of the Land Acquisition Act 2013?

The Act ensures a fair, transparent, and participative process for land acquisition. It balances development needs with the rights of landowners. It provides higher compensation, requires consent in many projects, includes rehabilitation and resettlement measures, and emphasises social impact assessments to reduce hardship for families affected by land acquisition.

The enhanced protection for landowners under the 2013 Act has made property investments more secure than ever. If you're planning to buy a home with the confidence that comes from stronger property rights, check your eligibility for a home loan from Bajaj Finserv to access competitive rates and quick approval. You may already be eligible, find out by entering your mobile number and OTP.

How to calculate compensation under Land Acquisition Act 2013?

Compensation is based on the land’s market value, multiplied by a factor of 2 for urban areas and 4 for rural areas. In addition, landowners receive value for attached assets, a solatium of 100% of the market value, and an extra 12% per year from notification to the award date.

Understanding fair compensation values helps you make better property purchase decisions. With improved compensation frameworks ensuring fair land values, now is an excellent time to invest in real estate. Check your loan offers with Bajaj Finserv to see how much you can borrow at attractive interest rates starting from 7.45%* p.a You may already be eligible, find out by entering your mobile number and OTP.

What is the time limit under the Land Acquisition Act 2013?

Objections to land acquisition can be raised within 60 days of the preliminary notification. If land remains unused for five years after possession, it must be returned to original owners or a land bank. In certain cases, this return period may be extended depending on project timelines.

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