Towards Reform of the Land Acquisition Framework in India
Indian Institute of Management Working Paper No. 2007-05-04
31 Pages Posted: 6 Feb 2011
Date Written: May 1, 2007
We bring out the fundamental and more important problems with the current framework of land acquisition in India, regulations on land and the functioning of land markets. We argue that reform is overdue and the current framework would be unsustainable in a democracy that is India. Current land prices are highly distorted owing largely to regulatory constraints and the process of takings. Land acquisition more than any other factor is the most important constraint on development and especially in infrastructure development. We bring out the core elements of the reform – the need to define “public purpose” ex-ante for compulsory acquisition of land, the measures that would allow the market price of land to play its correct role, and the approach to valuation. We also argue for an independent valuer when compulsory taking is involved and methods of valuation to ensure that the land owner including the farmer gets the correct value for this land in both compulsory acquisition and in voluntary sale. We also argue the need for a parallel non-compulsory framework for acquisition and develop the key elements of the same. We also bring out alternatives to physical acquisition of land especially in the context of infrastructure development in central places.
Keywords: Land, India, Law, Reform, Land-Acquisition, Land-Market, Distortions, Infrastructure
JEL Classification: K2, K4, R3, R14
Suggested Citation: Suggested Citation