Right to Fair Compensation and Transparency in Land Acquisition Act

The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 regulates compulsory acquisition of land and links it with fair compensation, rehabilitation and resettlement. It seeks to make acquisition participatory and transparent by requiring assessment of social costs, consent in specified projects, compensation based on enhanced market value, and special protection for vulnerable communities.

Social impact assessment and consent

• Before initiating acquisition, the appropriate government must ordinarily conduct a Social Impact Assessment in consultation with the concerned Panchayat, Municipality or Municipal Corporation.
• The assessment examines whether the acquisition serves a public purpose, the number of affected families, the extent of land required, possible alternatives, effects on livelihoods and community assets, and whether the proposed land is the minimum necessary.
• A public hearing must be held in the affected area, and a Social Impact Management Plan must specify measures to address identified impacts.
• An independent expert group appraises the assessment, including whether the project's benefits outweigh its social costs; the appropriate government must thereafter satisfy itself about the public purpose and minimum land requirement.
• The Social Impact Assessment is ordinarily to be completed within six months. The appropriate government may exempt it where land is acquired by invoking the Act's urgency provisions.
• For acquisition for a private company, prior consent of at least 80 per cent of affected families is required.
• For a public-private partnership project in which land ownership continues to vest in the government, prior consent of at least 70 per cent of affected families is required.
• The consent process is conducted along with the Social Impact Assessment; the central Act does not prescribe these consent thresholds for acquisitions undertaken directly for government-controlled public purposes.

Determination of compensation

Compensation for landowners is determined through the market-value formula in the Act and the First Schedule.

• The Collector determines market value using the highest applicable benchmark among the value specified for stamp purposes, the average sale price of similar nearby land, and the consented compensation amount in acquisitions for private companies or public-private partnerships.
• The market value is multiplied by the factor prescribed in the First Schedule: one in urban areas and between one and two in rural areas, depending on distance from an urban area as notified by the appropriate government.
• The value of buildings, trees and other assets attached to the land is added separately.
• A solatium equal to 100 per cent of the compensation amount is payable to account for the compulsory nature of acquisition.
• An additional amount calculated at 12 per cent per annum on the market value is payable for the statutory period between the Social Impact Assessment notification and the award or possession, whichever is earlier.
• The formula is commonly expressed as compensation of up to four times the benchmark market value in rural areas and twice the benchmark market value in urban areas, apart from attached assets and the statutory additional amount.

Rehabilitation and resettlement

Rehabilitation and resettlement benefits are additional to land compensation and extend to the Act's defined affected families, which include specified livelihood-dependent persons and are therefore not confined to landowners.

• The Collector must make a rehabilitation and resettlement award specifying the entitlements of each affected family.
• The Second Schedule provides, as applicable, for housing, land-for-land in specified cases, employment or an alternative lump-sum or annuity, subsistence support, transportation assistance and a one-time resettlement allowance.
• Families of artisans, small traders and others whose livelihoods are disrupted are entitled to the applicable livelihood-restoration assistance.
• Resettlement areas must be provided the basic infrastructure and amenities listed in the Third Schedule.
• Taking possession is linked to payment of compensation and provision of rehabilitation and resettlement entitlements within the statutory timelines.

Special safeguards for Scheduled Tribes

• Land should not be acquired in Scheduled Areas as far as possible; when acquisition occurs, it must be shown to be a demonstrable last resort.
• In Scheduled Areas under the Fifth Schedule and tribal areas under the Sixth Schedule, prior consent of the concerned Gram Sabha, Panchayat or Autonomous District Council at the appropriate level is required in all cases, including acquisition under urgency provisions.
• Where a project causes involuntary displacement of Scheduled Tribe families, a development plan must address unsettled land rights and restoration of titles over land alienated in violation of law.
• When land belonging to members of Scheduled Tribes is acquired, at least one-third of the compensation due must be paid initially and the remainder after possession is taken.
• Affected Scheduled Tribe families should preferably be resettled in the same Scheduled Area and in a compact block so that their ethnic, linguistic and cultural identity can be retained.
• If Scheduled Tribe families are relocated outside their district, they are entitled to an additional 25 per cent of their rehabilitation and resettlement benefits in monetary terms and a prescribed one-time payment.
• Reservation and other statutory benefits available to Scheduled Tribes in the affected area continue in the resettlement area; where relocation is outside a Scheduled Area, the applicable statutory safeguards must still be extended.
• Community rights settled under the Forest Rights Act are to be monetarily quantified and paid to the persons concerned in proportion to their shares.

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