Land acquisition is a process by which the government (state or union) can acquire private land for various purposes. In return, the government pays suitable compensation to the land owner and would be responsible for the rehabilitation and resettlement of the affected land owners.

What is the 2013 Land Acquisition Act?

The entire land purchase process is regulated and governed by the Land Acquisition Act of 2013. The Act lays down the requirement for giving landowners fair compensation.

No award has been declared under Section 11 of the Act of 1894 as of the start date of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation, and Resettlement Act of 2013, according to the bench of MR Shah and BV Nagarathna, JJ. As a result, such landowners shall not be entitled to compensation under Section 24 (1) of the Act of 2013 annexed to it.


  • To make sure the land acquisition process is transparent, working with all the interested parties and local authorities.
  • Having land ownership or remaining on the property will ensure the least amount of population relocation.
  • To offer just compensation to the families whose livelihoods have been negatively impacted by land acquisition, or whose land has been acquired.
  • To make suitable provisions for the affected families’ rehabilitation and resettlement.
  • The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Bill, 2013

The Bill:

  • The Bill provides for land acquisition as well as rehabilitation and resettlement.  It replaces the Land Acquisition Act, of 1894.
  • The process for land acquisition involves a Social Impact Assessment survey, a preliminary notification stating the intent for acquisition, a declaration of acquisition, and compensation to be given by a certain time.  All acquisitions require rehabilitation and resettlement to be provided to the people affected by the acquisition.
  • Compensation for the owners of the acquired land shall be four times the market value in the case of rural areas and twice in the case of urban areas.
  • In case of the acquisition of land for use by private companies or public-private partnerships, the consent of 80 percent of the displaced people will be required.  The purchase of large pieces of land by private companies will require the provision of rehabilitation and resettlement.
Land can be purchased by the government for its own use, for public sector organizations, or for “public purposes,” which can include any of the following:
1. For any task associated with the state, national, security, or defense services provided by the Indian government, including those involving the navy, army, air force, or other armed forces.
2. Private hospitals, private educational institutions, and private hotels are not included in the construction of public infrastructure.
3. For any government- or farmer-owned cooperative initiative involving agricultural or related fields like dairy, fishery, or meat processing.
4. For projects mentioned in the National Manufacturing Policy, such as industrial corridors, manufacturing zones, or other initiatives. Mining operations may also fall under this category.
5. For the purpose of gathering water, building conservation structures, or for the deliberate construction or enhancement of village sites.
6. For institutions of higher learning and research with government support.
7. For planned development, such as building housing developments in rural or urban regions for the less fortunate.
8. For creating housing projects for the underprivileged, the homeless, or those impacted by natural disasters.

Section 26 of the Act deals with compensation for the land owners. It outlines the proposed minimum compensation, based on multiples of the market value. Usually, the market value is multiplied by a factor of one of two times, for land acquired in rural and urban areas.

The market value of the land is determined by the average sale price for similar types of land situated in the nearest village or nearest vicinity area. This sale price is assessed, by considering one-half of the total number of sale deeds or the agreements to sell, in which the highest price has been mentioned.

The compensation can also be a consented amount, in case the land is acquired for private companies or public-private partnership projects.

The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (herein referred to as the Fair Compensation in Land Acquisition Act) was enacted to provide for just and fair compensation to the owners of the land and affected families for the land acquisitions made under the said Act and the 13 Acts specified in the Fourth Schedule, which makes provisions for acquisition of land for the purposes specified in the respective Acts, in terms of the provisions made in the First, Second and Third Schedule to the Fair Compensation in Land Acquisition Act. In other words, the benefits of the compensation, rehabilitation, and resettlement provided in the Fair Compensation in Land Acquisition Act are proposed to be extended in cases of land acquisition made under the Acts specified in the Fourth Schedule.

Under the Fair Compensation in Land Acquisition Act, the land may be acquired for public purposes. In order to ensure better health and educational facilities in the country, it is proposed to include private hospitals and private educational institutions within the ambit of the ‘public purpose’.

It is proposed to make a consequential amendment by substituting the ‘Companies Act, 1956’ with the ‘Companies Act, 2013’ where the word ‘Company’ has been defined. At present, the provisions of the Fair Compensation in Land Acquisition Act extend to ‘private company’ thereby excluding others like a public company, proprietorship, partnerships, non-profit organizations, etc. Therefore, in place of the term ‘private company, the term ‘private entity is proposed to be substituted and defined accordingly.


  • If rehabilitation and resettlement obligations are to be imposed on private purchases of agricultural property, it is unclear whether Parliament has the authority to do so.
  • Without a minimal threshold, the Social Impact Assessment requirement may cause delays in the execution of some government programs.
  • Private corporations or public-private partnerships that involve the acquisition of land must obtain the approval of 80% of the affected parties. However, PSUs are exempt from this requirement.
  • Based on recently disclosed transactions, the market value is calculated. In rural areas, this number is multiplied by two to determine the compensation amount. This approach might not result in a precise correction for any potential underreporting of prices in land transactions.
  • For no more than three years, the government may temporarily acquire land. In such circumstances, there is no provision for rehabilitation or resettlement.


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