LAND ACQUISITION ACT

CASE STUDY:
TATA NANO PLANT SINGUR
SUBJECT: TOWN PLANNING

SUBMITTED BY: ARSHI KHAN

ROLL NO. 160823025
SECTION A
DITUNIVERSITY
LAND ACQUISITION ACT
What is LAND ACQUISITION ACT?
An Act to amend the law for the Acquisition of Land for public purposes and for the
companies. Whereas it is expedient to amend the law for the Acquisition of Land needed for
public purposes and for companies and for determining the amount of compensation to be
made on account of such acquisitions.
History of the Land Acquisition Act in India
• The Regulation Act of 1824, which was applied throughout Bengal province, was outlined
first by the British Government.
• The Act gave the British Government the right to acquire immovable property at a ‘fair and
reasonable price’ for the construction of roads, railways, canal, etc.
• In the presidency of Bombay and Madras in the year 1839 and 1852, Act XXVII and XX
were introduced to facilitate construction of public buildings.
• The Act VI of 1857 was applied to the entire British India repealing all the previous Acts
pertaining to land acquisition.
• The land Acquisition Act of 1894 was finally enacted and it replaced the previous Act X of
1870.
• Since India’s independence in 1947 this Land Acquisition Act of 1894 has governed the
acquisition of the land by government which has been amended form time to time.
• The Land Acquisition Act of 1894 has now been repealed and the new Act that is “Right to
Fair Compensation and Transparency in Land and Rehabilitation and Resettlement Act
2013” is now introduced in India.
LAND ACQUISITION ACT

Purpose of land Acquisition Act 1894

• The very purpose of the Land Acquisition Act 1894 was to facilitate purchase of privately
held land by the government for public purposes.
• It means the government can acquire land for setting up hospitals, educational
institutions, rural planning, housing, etc.
• The central government can acquire the land if the purpose is for the union and the state
government can acquire land for all public purposes.
• Local authorities, companies, registered societies, and registered co-operative societies
can also acquire land through the government for development activities, and the
acquisition process need not necessarily be initiated by the government.
Time required for acquisition of land
In the new Act 75 months schedule is required for acquisition of land. With the inclusion of
Social Impact Assessment requiring public hearing, the procedure requires much time for
the acquisition of land.
Public Purpose
Prior consent of at least 80% of the affected families should be obtained through the
process as prescribed in rule for acquiring the land for public purpose and also for private
companies. It applies the same consent for public private partnership project with 70%
consent prior to the notification.
TATA NANO PLANT SINGUR

Issues behind the shift- Land Acquisition

The main challenge of Nano plant in Singur was the land acquisition. The difficulty of land acquisition in
India is due to two factors i.e. the type of land to use & the population density over it. According to the
land acquisition act, 1894 there are various issues, which became the barriers in the process of acquiring
the land by the state govt. for Tatas.

Section 11 of it makes it obligatory on the part of collector to safeguard the interest of all person’s involved
though they might have not appeared before him. In awarding compensation the land acquisition collector
should look into the estimate value of the land, given due consideration to the other specific factors. The
value of the land should be awarded within 02 years.

In Singur there are more than 1100 land holdings and out of it total 6000 families were about to suffer
from this land acquisition. The Project was to be spread over 700 acres with another 300 kept aside for
ancillary production.

On September 25, 2006 the first lot of compensation cheques begin to be handed out from the Singur
Block Development office. About 10,000 people were involved in protest against land acquisition while
about 256 of the 354 people were to be awarded compensation got their cheques. Mamta Banerjee had
first resisted the acquisition of the land in 2006 by going on a 26 days hunger strike despite appeals from
the Prime minister to negotiate the settlement. The whole process was under review with the Judiciary
third party i.e. High court. The West Bengal on Dec. 06 claimed that 920 acres of land has been
voluntarily handed over by the landowners and compensation has been accepted for 658 acres of land.

In March 07 Tata Motors finally got possession of land for its small car factory in Singur and an agreement
was signed between TML and state government for leasing out 949.5 acres of land to the company for 90
years. Later on State government itself admitted that only 30% of the landowners of Singur who own
287.5 acres of land had given consent in writing, (That means 21.65% who have even collected cheques
are still against this forcible land acquisition).
The state government has also admitted before Calcutta High Court that it has not been able to reach an
agreement with farmers over the acquisition of around 300acres of the land in Singur They also disclosed
that till April 07, Rs. 90.35 crore has been disbursed to 10,021 people for 671 acres of land. The state had
so far acquired 997.11 for the Tatas small car project. It had also allotted a total of Rs. 118.95 crore to pay
the compensation Rs. 0.58 crore for the bargadars. They had not disclosed about the landowners still left
to accept the compensation & their satisfaction with the compensation they received from the government.

Critical Issues of Land Acquisition at Singur

In case of Compensation for land acquisition for Tata the average prices paid per care land was
Rs. 12 lakh while the estimate current price per acre is Rs. 60 lakh. The land prices have zoomed
after acquisition of the land by companies.

The nub of the problem was Mamta Banerjee’s demand that 300 acres land
of the 997.11 acres allocated to the project should be returned to its
original owners. According to Ms. Banerjee the land was taken forcibly
from the farmers. While Tata Motors Limited needed all the land as one
block not just for the main plant but for ancillary units, because by this way
they can save part of huge expenditure with vendors and stick to the low
price of the car as promised by Ratan Tata.

Ratan Tata held a press conference on 22nd August 2008, in Kolkata and announced, “We do not
want to come to an area where we perceive that we are unwanted. If anybody is under the
impression that because we have made this large investment of about Rs. 1500 crore, we will not
move then they are wrong. I can’t bring our managers and their families to West Bengal, if they are
going to be beaten, if there is going to be violence constantly, if their children are going to be afraid
to go to school. after this the work of TML in Singur was suspended.
Once the Tata Motors suspended work at the plant then only Ms. Banerjee stuck to the offer that let the
Tatas build the car factory on the 600 acres of land in Singur. But the vendor park can be put up in some
non-fertile area nearby, and 400acres of the fertile land can be returned to the farmers. A car for common
people is good but that cannot be at the cost of poor farmers.

Reason for selecting Gujarat:

Considering the unremitting zeal with which chief Minister of West Bengal Buddhadeb Bhattacharya
pursued the Nano, it appeared the small car to him what the nuclear deal was to Prime Minister Man
Mohan Singh. The Chief Minister of West Bengal wanted growth & jobs & thus he took all possible steps
to help industrialist’s entry in to the state, where as trinamool congress chief Mamta Banerjee wanted an
issue that would pull out her out of political morasses.

In case of Nano shift, Narendra Modi, Chief Minister of Gujarat made it clear that Nano project is a feather
in his cap. The credit needs to be given to Modi for the involvement and speed that his administration
demonstrated in bringing the car project to Gujarat. In spite of the other state what really impressed to
Tatas was the speed at which the project got the nod from the Modi administration. It took just 10 days for
the Gujarat government to work out the packages for the Tatas.

Nano Project will bring much-needed high technology into the state and strengthen the local auto
component industry in the SME sector.

There are certain other reasons due to which Tata Motors Limited selected Gujarat as their home for
Nano project: –

• Gujarat is one of the few states to have substantially higher private sector investment than public
sector investment.
• It has relatively peaceful Industrial relations climate.
• Relatively untouched by projects over acquisition of farmland for industry.
• It has thriving entrepreneurial culture and SME clusters.
 • The number of industrial projects in Gujarat were 789 in September 06, which risen up to 923 &
1384 consecutively in September 07 and in September 08.
• The status of financial investment in Gujarat was 2,12593 crore rupees in Sep. 06 became
2,11,399 in September 07 and again raise up to 2,88,018 crore rupees in September 08.

Benefits to the state from the shift:

The Journey of Tata’s ambitious automobile project, Nano from Singur (West Bengal) to Sanad (Gujrat)
clears the picture of two faces of modern India. One state in spite of all allegation and opposition has
come forward to embrace the opportunity of Industrial investment where as the other state in spite of all
efforts of the government and officials of Tata Motor’s Limited has refused to come out of its shell of
beliefs to grab the golden opportunity of industrial investment.

After all it is benefiting to one of the state i.e. Gujarat & the benefits are as follows:

Benefit to Component Manufacturers and vendors:

Due to this shift some small-scale industries i.e. manufacturers & suppliers of car components will save
about 16 lakh rupees per month as Transportation charges. The vendors in Gujarat will also be benefited
by it, as they can save 2% C.S.T. on the components. Earlier the vendors had to pay Rs. 4-5 per Kg. as
transportation cost. Now due to the plant in Sanad, vendors will have to pay only 0.50 Rs. Per Kg.

New Investment opportunities:

Tata’s move to Gujarat has given a perception about the state as an investor friendly state it will attract to
even further investment. Although Gujarat was not keen on providing concessions to industry, it made an
exception in the case of the Tata Nano project, given the competition between the states to grab the
prestigious project and the opportunity to create a good investment climate in Gujarat.

Benefit to real estate Market:

Soon after the Nano project moved to Gujarat, the land prices increased there to an all time high with a
200 per cent hike in just one fortnight. The land prices in Chharodi have gone up to rs. 8-10 lakh per bigah
from Rs. 3-4 lakh per bigah. In Sanad the land prices increased as Rs. 3000 per sq. yard from Rs. 2500
per sq. yard. By this also the investors will not hesitate from entering in Gujarat. Prices have also risen in
surrounding areas like Nal Sarovar due to speculation that the Tatas may build residential colonies for
their employees and vendors.

Additional jobs & training opportunities:

Apart from the Nano plant, the Tatas will also build a research institute in agriculture and a marine biology
institute, beneficial for Gujarat and lead to further development and growth in the state. The Tata Nano
project is estimated to provide 10,000 additional jobs in the state.

The Tatas also have other plans for the Tata Nano plant. The Tatas will build electric cars and CNG
variants from the mother plants. They also plan to set up an auto academy and ITIs (Industrial Training
Institutes) to meet resource requirements for the mother plant.

Comparative study of State’s offer:

“Bengal is the most investor friendly state in the country. Someone had to turn that belief into reality. The
investment is a reflection that the Tata group has faith in the investment climate and the government of
Bengal.” This was the statement given by chief minister Mr. Buddhadeb Bhattachrya after Tatas entry into
the state & the deal on the same.

In West Bengal Tatas moved to court to prevent the disclosure of the details of their deal with the state
government. Tata Motors filed a suit in the Calcutta high court to prevent the details of the deal that the
West Bengal Industrial Development Corporation offered them from being made public, but it was too late
some details did leak out before that