Another Urban Land Ceiling Act in Making

By Dr Sanjay Chaturvedi

Any land reform cannot take place without government’s intervention. And this is also true that Land reforms in India got centre of political engineering even in the British rule. Unfortunately, we had Urban Land Ceiling Act (ULCA). The ULCRA was introduced during Prime Minister Indira Gandhi’s
regime as a means for lower income sections to fulfill their dreams for a home. The main purpose of the Act was to prevent hoarding or excessive holding of land in urban agglomerations by few people so as to facilitate proper distribution and uniform development of all sectors of urban areas. We all know that the Act outlived its main objectives and repealed by entire nation, off late by 2007.
On Thursday 28, July 2011, government at centre came out with new land acquisition policy called National Land Acquisition and Rehabilitation & Resettlement Bill, 2011 ( LARR). The very first line of Act says in its Forward “ Infrastructure across the country must expand rapidly. Industrialisation, especially based on manufacturing has also to accelerate. Urbanisation is inevitable. Land is an essential requirement for all these processes. Government also needs to acquire land for a variety of public purposes.”
Hence, the intentions are clear. The “Land for Land” policy of settlement never got an attention. The scare commodity “Land” is the subject matter of all political and social engineering. Builders wants land and government wants money. Land owners who have sold the land for cheap price, now again in the loot, since the first chance was misplaced and there is again an opportunity to earn.
I the process, government is up again to have ULCA. According to Dr. K. Venkatasubramanian Former Member, Planning Commission, after independence, attempts had been made to alter the pattern of distribution of land holdings on the basis of four types of experiments, namely;
> Land reforms “from above” through legislation on the lines broadly indicated by the Central Government, enacted by the State legislators, and finally implemented by the agencies of the State Government.
> Land reforms “from above” as in the case of Telengana and the naxalite movement also to some extent in the case of the “Land Grab” movement.
> Land reforms through legislative enactments “from above” combined with peasant mobilisation “from below” as in the case of controlled land seizure in West Bengal and protection of poor peasants in Kerala.
> Land reforms “from below” through permission of landlords and peaceful processions by peasants as in the case of Bhoodan and Gramdan.
The land reform legislation was passed by all the State Governments during the Fifties touching upon these measures;
> Abolition of intermediaries.
> Tenancy reforms to regulate fair rent and provide security to tenure.
> Ceilings on holdings and distribution of surplus land among the landlords.
> Consolidation of holdings and prevention of their further fragmentation and
> Development of cooperative farming.
By 1972, laws had been passed in all the States to abolish intermediaries. All of them had two principles in common: 1) abolition of intermediaries between the state and the cultivator and 2) the payment of compensation to the owners. But there was no clear mention about just and equitable compensation. Therefore, the Zamindari Abolition Act was challenged in the High Courts and the Supreme Court. But the Government accomplished the task of abolishing intermediary tenures bringing nearly 20 million cultivators into direct contact with the state. Nearly 57.7 lakh hectares were distributed to landless agriculturists after the successful completion of the Zamindari Abolition Act. The abolition also had a favourable economic impact on the country. By conferring the ownership of land to the tiller, the Government provided an incentive to improve cultivation. This paved the way for increase in efficiency and yield. This was an important step towards the establishment of socialism and the Government revenue increased. It also ushered in cooperative farming.
The ultimate aim of land reforms in India is to confer the rights of ownership to tenants to the larger possible extent. Towards this end, the Government has taken three measures: (1) declaring tenants as owners and requiring them to pay compensation to owners in suitable installments (2) acquisition of the right of ownership by the State on payment of compensation and transfer of ownership to tenants and (3) the states’ acquisition of the landlords’ rights bring the tenants into direct relationship with the States.
As a result of all these measures, 92 per cent of the holdings are wholly owned and self-operated in the country today.
One of the controversial measures of land reforms in India is the ceiling on land holding. By 1961-62, ceiling legislation had been passed in all the States. The levels vary from State to State, and are different for food and cash crops. In Uttar Pradesh and West Bengal, for example, the ceiling on existing holding is 40 acres and 25 acres and on future acquisitions 121/1 acres and 25 acres respectively. J In Punjab, it ranges from 27 acres to 100 acres, in Rajasthan 22 acres to 236 acres and in Madhya Pradesh 25 acres to 75 acres. The unit of application of ceiling also differs from State to State. In Andhra Pradesh, Assam, Bihar, Punjab, Haryana, Uttar Pradesh, West Bengal, Madhya Pradesh and Maharshtra, it is on the basis of a ‘land holder’, whereas in the other States it is one the basis of a ‘family’.
In order to bring about uniformity, a new policy was evolved in 1971. The main features were:
> Lowering of ceiling to 28 acres of wet land and 54 acres of unirrigated land
> A change over to family rather than the individual as the unit for determining land holdings lowered ceiling for a family of five.
> Fewer exemptions from ceilings
> Retrospective application of the law for declaring benami transactions null and void; and
> No scope to move the court on ground of infringement of fundamental rights
Besides, national guidelines were issued in 1972, which specified the land ceiling limit as;

The best land 10 acres
For second class land 18-27 acres; and
For the rest, 27-54 acres with a slightly higher limit in the hill and desert areas
According to the figures available till the beginning of the Seventh Plan, the area declared surplus is 72 lakh acres; the area taken over by the Government is 56 lakh acres; and the area actually distributed is only 44 lakh acres. Thus, 28 lakh acres of land declared surplus have not been distributed so far. Of this, 16 lakh reserved for specific public purposes.

Restriction on holding under ULCA was :
1. Ceiling limit on vacant lands for urban agglomerations of metropolitans of Delhi,
Mumbai, Kolkata and Chennai which fall under the category ‘A’ is 500 sq. meters.
2. At 1,000 sq. meters for urban agglomerations with a population exceeding ten lakhs and above. This forms category ‘B’.
3. At 1,500 sq. meters for an agglomeration having population between three to ten lakhs, in category ‘C’.
4. And at 2000 sq. meters for agglomerations having population between two to three lakhs under category ‘D’

Conditions for exemptions:
The vacant land must not be protected under the special exemptions under the Act. Sec. 19 to 21 make special provisions, referred to under Sec. 3 whereunder the vacant land beyond the ceiling limits can still beheld by the person despite the Act being applicable to the region. But section 21 states that such lands have to be used for the construction of dwelling houses for the weaker sections of the society. The person holding such lands has to declare the intention to use them for the construction of such dwelling units. Sec. 2 (j) states that the time limit within which such units are to be constructed must be prescribed along with the application.. there are some statutory conditions that need to be fulfilled before such an exemption is allowed:
(a) The person should hold the land in excess of the ceiling limit prescribed
(b) The said person should make a declaration before the competent authority that
such land is to be utilized for the construction of dwelling units for the
accommodation of the weaker sections of the society. The declaration must be
within such time, in such manner as is prescribed from time to time in the rules.
(c) The plinth area of such houses should not exceed 80 sq. meters
(d) The dwelling units are to be constructed in accordance with the scheme approved
by such authorities as the state government specifies in the official gazette
ULCA was failed to achieve its objectives due to its poor performance. Out of 2,20,675 ha of estimated excess vacant land, 50,046 ha. of vacant land vested in the State Governments. Physical possession was acquired only of 19,020 ha. of vacant land by the State Governments.

History of Land Acquisition Act
Regulation I of the land acquisition act was first enacted by the British government in the year 1824. Its application was throughout the whole of the Bengal provinces immediately subject to the Presidency of Fort William. The rules empowered the government to acquire immovable property at, what was deemed to be, a fair and reasonable price for construction of roads, canals or other public purposes. In 1850 some of the provisions of regulation I of 1824 were extended to Calcutta through Act I of 1850, with a view to confirm the land titles in Calcutta that were acquired for public purposes. At that time a railway network was being developed and it was felt that legislation was needed for acquiring land for the purposes of the railways. Building act XXVII of 1839 and act XX of 1852 were introduced to obviate the difficulties pertaining to the construction of public buildings in the cities of Bombay and Madras. Act VI of 1857 was the first full enactment, which had application to the whole of British India. It repealed all previous enactments relating to acquisition and its object. Subsequently act X of 1870 came in to effect which was further replaced by land acquisition act 1894, a completely self contained act, in order to purge some of the flaws of act X of 1870.
After independence in 1947, the Indian government adopted “Land Acquisition Act-1894” as a tool for land acquisition. Since then various amendments have been made to the 1894 act from time to time. Despite these amendments the administrative procedures have remained same.
Section 17 of the Act confers special powers with the concerned authority wherein passing of award may be dispensed with and yet permits to take possession of the land notified for acquisition. Further holding of enquiry can also be waived, as envisaged under section 5 A of the Act. However, such powers can be exercised only in case of urgency. After passing of the award, the person whose land has been proposed to be acquired can give his consent for such acquisition and agree to receive the compensation.
Now, the Chief Minister of Uttar Pradesh, Ms Mayawati had announced a new Land Acquisition Policy at a farmers representative meet at Lucknow. The new policy allows farmers to trade their land with private developers directly but a 70% consensus of the farmers directly affected will be the precursor of the deal. The government will play a facilitator’s role and will issue notification under Section 4 of the Land Acquisition Act, the agreeing parties. The policy will allow the farmer to purchase agricultural land in Uttar Pradesh within a year of the deal and the stamp duty will be exempted.
LARR, in hindi its mouth watering, is the Act where instead of facilitator, government want to become party indirectly. Various nods and NOCs are nothing but keeping an eye on the lad dealings in the country.

Scope of LARR :
Both LA and R&R Provisions will apply when:
1. Government acquires land for its own use, hold and control
2. Government acquires land with the ultimate purpose to transfer it for the use of private companies for stated public purpose (including PPP projects but other than national highway projects)
3. Government acquires land for immediate and declared use by private companies for public purpose
Note I: Public purpose for 2. & 3. above, once stated, cannot be changed
Note II: Land Acquisition under 2. & 3. above can take place provided 80% of the project affected families give consent to the proposed acquisition.

Only R&R provisions will apply when:
1. Private companies buy land, equal to or more than 100 acres, on their own;
2. Private company approaches Government for partial acquisition for public purpose.
Note: Government does not envisage acquiring:
1. Land for private companies for private purposes. Or 2. Any multi-crop irrigated land for public purposes

A Comprehensive Compensation Package (Schedule I)
1. Market value of the land:
a) the minimum land value, if any, specified in the Indian Stamp Act, 1899 for the registration of sale deeds in the area, where the land is situated; or
b) the average of the sale price for similar type of land situated in the village or vicinity, ascertained from fifty per cent of the sale deeds registered during the preceding three years, where higher price has been paid; or whichever is higher:

Provided That The Market Value So Calculated Shall Be Multiplied By Three In Rural Areas.
2. Value of the assets attached to land: Building/Trees/Wells/Crop etc as valued by relevant govt. authority; Total compensation = 1+2
3. Solatium: 100% of total compensation
A compensation decided by government rather than market forces will never sustain. The LARR is actually ceiling on urban holding and new bottle for old wine. Since transaction were done without centre government’s knowledge and without compensation to the cerntral treasury and since housing is state subject, centre government cannot directly indulge into land selling spree, a need based comprehensive Act was needed and we will have soon in the form of LARR.

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