Right To Fair Compensation And Transparency In Land Acquisition

The “Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation, and Resettlement Act, 2013,” also known as the Land Acquisition Act, 2013,” the LARR Act, or the RFCTLARR Act, was enacted by the Central Government and took effect on January 1, 2014, repealing the colonial Land Acquisition Act of 1894 (the “Old Act”).  

Act’s necessity 

  • Fair compensation is required to protect the property rights of people whose land is purchased, as it ensures people receive fair compensation for the value of their land and any potential damage to their livelihood. 
  • Preventing Exploitation: Transparent procedures and just compensation help to protect landowners, especially those who may be in financial difficulty or are unaware of the value of their property. 
  • Protecting Social Justice: A strong emphasis on social justice principles to prevent evictions of vulnerable populations. It necessitates the implementation of appropriate rehabilitation and resettlement procedures, providing impacted individuals with alternative means of support, housing, and other facilities. 
  • Fostering Public Trust: Transparent and accountable processes increase public trust in the government’s decision-making. When land acquisition procedures are transparently and equitably, the government, landowners, and impacted communities can avoid problems. 


  • Application to Private Players such as Industrialists: Land can be purchased for “public purposes” as defined by the Act, such as infrastructure projects, public-private partnerships, and military, navy, and air force strategic goals. To purchase land for public-private co-ops or on behalf of private companies carrying out public functions, the government must obtain approval from 70% and 80% of the affected households, respectively. The rule on rehabilitation and resettlement must also apply if private actors acquire land above the amount set by the relevant government through informal negotiations. 
  • Rehabilitation and Resettlement: The Rehabilitation and Resettlement Package under the Acts is more comprehensive with its components. In addition to monetary compensation, it includes provisions for employment, the allocation of alternative housing units, another piece of land, and other entitlements. It also refers to infrastructure facilities at the new location. In addition, when property purchases of more than 100 acres occur, a Rehabilitation and Resettlement Committee consisting of representatives from various stakeholders is formed to oversee and carry out the Rehabilitation and Resettlement Clause. 
  • Compensation: As the title suggests, the most prominent aspect of the New Act is fair pay. The act establishes a system to ensure a minimum level of compensation, which includes payments of 1 to 2 times the market value of the real estate, the value of the asset tied to the land, and Solatium. Solatium refers to the sum paid in addition to the compensation, which is 100% of the Compensation Amount. The initial landowners must receive a minimum payment under Section 26 of the Act. This compensation involves calculating using a multiple of market value. Depending on whether it is rural or urban, the market values the cost of living one or two times. However, the amount of compensation is far more than under the Old Act. 
  • Consent: When the government purchases land for public use and directly operates the land bank, the landowners’ participation or approval is not required. When purchasing property for the start-up of private companies, the consent of at least 80% of the affected families is essential. In a public-private partnership, 70% of the affected families must approve the land purchase process. The statute requires that 20% of the proceeds from the sale of the acquired land or any part of it be paid to the original landowner or their legal heirs to prevent profiteering. 

The Act’s Drawbacks 

  • High Compensation Costs: The Act requires that compensation for land acquired be at least four times the market value in rural areas and twice the market value in urban areas. It can be a significant financial burden for the government and cause delays in land acquisition projects. 
  • The Act is a complex and lengthy process that can make it difficult for the government to acquire land quickly and efficiently. It can also cause delays in infrastructure projects. 
  • Lack of Transparency: The act fails to provide adequate transparency in the land acquisition process. It can lead to corruption and abuse of power by government officials. 
  • Inadequate rehabilitation and resettlement: The act doesn’t provide adequate recovery and resettlement for those displaced by land acquisition. It can cause social unrest and conflict. 
  • The Act fails to consider the social and environmental consequences of land acquisition. 
  • The Act does not provide adequate safeguards for tribal and other marginalized communities’ rights. 
  • The Act does not address the judiciary’s role in land acquisition disputes. 

The Future 

  • Involvement of impacted communities, landowners, and other stakeholders in decision-making: The government can ensure that communities, landowners, and other stakeholders participate meaningfully in decision-making. Holding public hearings, meetings, and consultants to gather feedback, resolve issues, and incorporate them into land purchase and resettlement plans. 
  • Run education campaigns and activities to assist government officials, affected communities, and other stakeholders to enhance their capacities. Inform them of their rights and entitlements as the procedures for acquiring, rehabilitating, and resettling land. Improve understanding of the obligations for transparency and equitable remuneration. 
  • Tracking and Appraisal: Implement a dependable auditing and appraisal mechanism to ensure that the requirements for transparent hiring and remuneration are met. Regularly assess the status of land acquisition initiatives, rehabilitation efforts, and compensation payments. Any discrepancies or flaws need to be rectified with corrective action and accountability. 
  • Technology: Use technological platforms and digital tools to improve transparency, streamline procedures, and expedite the land purchase process. Implement online portals for information distribution, application submission, and compensation payment tracking. 
  • Law Review and Amendment: Conduct a thorough examination of the current land acquisition laws and regulations to identify any flaws and potential areas for change. In light of the review, consider amending the legislation to improve the clauses relating to transparency and equitable pay.