LAND ACQUISITION AND ITS FINANCIAL COSTS

Context

Recently, in a written reply to a question raised in Rajya Sabha, NHAI provided the data for the land acquisition costs and state wise contributions.

Key Highlights of the NHAI reply

1. National Highways Authority of India (NHAI) has spent around Rs 1.7 lakh crores on land acquisition in the last five years.
2. Cost of land acquisition, on an average is around 20% of the total highway project cost.
3. State Wise Facts
   • Maximum amount has been disbursed to land owners in Maharashtra, followed by Uttar Pradesh and Kerala.
   • On the parameter of state’s share in the land acquisition, Kerala contributed the highest (approximately 40% of all states together), followed by Haryana and Punjab.
4. Financial analysis
   • In Kerala, though the quantum of land acquired is low, the cost acquired is high, since land price is more due to high urbanization.
   • Increased financial burden on the NHAI, is the result of more land acquisition during the last five years, to meet the targets of pace of construction of highways.
     • While average NH construction was 13 km/day during 2009-10 to 2012-14, this has increased to 30 km/day during 2018-19 to 2022-23.

Challenges related to the Land Acquisition of India

1. Financial cost of land acquisition: Increased significantly with the Land Acquisition Act of 2013 amendment.
   • The Act provides for higher compensation and consent requirements for land owners.
2. Green Barrier: In the effective implementation of the projects because of the delays and uncertainties in environmental clearance.
   • These delays affect the project timelines and costs, adding cost without value addition.
3. Local Protest and mistrust: Local affected communities and society, protests against the project on the different dimensions of livelihood and cultural values.
4. Poor awareness among the landowners: Landowners are not aware about the rights and their respective entitlements for the reimbursements on the land acquisition. This in the long term creates confusion and uncertainty for both the government and the landowners.

Government initiatives for the Land Acquisitions

1. The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (LARR Act of 2013)
   • Act replaced the Land Acquisition Act of 1894 and introduced new provisions for
     • Compensation, Consent, Social impact assessment, and Rehabilitation and resettlement of affected persons.
2. SVAMITVA scheme
   • Launched in 2020 to provide property cards to rural landowners and enable them to use their land as a financial asset.
3. Special Economic Zones (SEZs) Act, 2005
   • Enacted to facilitate the establishment of SEZs in India and provide incentives and exemptions for the development of export-oriented industries.
4. Bhoomi Rashi Portal
   • e-Governance initiative of the Ministry of Road Transport & Highways, intends to expedite the process of land acquisition for National Highways.
   • It has fully digitized and automated the entire process of land acquisition.
5. PM Gati Shakti Scheme
   • National Master Plan for multi-modal connectivity, with the aim of coordinated planning and execution of infrastructure projects to bring down logistics costs.
6. Bharatmala scheme
   • Launched in 2019, with the objective of connecting 550 Districts in the country through NH linkages, ensuring optimized and efficient movement of goods and people across the country.

NHAI and State Suggestions for Financial Ease

1. NHAI has urged states to contribute to the land acquisition costs to ease the financial burden on NHAI.
2. State governments requested exemption on the state's contribution for certain projects by listing them under the Bharatmala Scheme.

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