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Inefficiency And Abuse Of Compulsory Land Acquisition--An Enquiry Into The Way Forward

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    (Department of Economics, Delhi School of Economics, Delhi, India)

This paper focuses on two issues--the problems with the compulsory acquisition of land, and the regulatory and institutional impediments that obstruct voluntary land transactions. We argue that any compulsory acquisition based process is intrinsically inefficient and unfair, even if it is accompanied by presumably benevolent schemes such as land-for-land and the R&R packages. Moreover, it is inherently prone to litigation. We demonstrate how what we call the 'regulatory hold-up' precludes a large number of potential transactions in agriculture land, and puts a downward pressure on land prices. The paper offers suggestions for reforming the legal and regulatory framework governing the land and its use. Finally, we discuss the Land Acquisition and Rehabilitation & Resettlement (LARR) Bill 2011. We show that the bill leaves open several backdoors for the states to favour companies. Movreover, it fails to address the fundamental causes behind rampant disputes and litigation over compensation.

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Paper provided by Centre for Development Economics, Delhi School of Economics in its series Working papers with number 209.

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Length: 28 pages
Date of creation: Jan 2012
Handle: RePEc:cde:cdewps:209
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  1. Deininger, Klaus & Jin, Songqing & Nagarajan, Hari K., 2009. "Determinants and Consequences of Land Sales Market Participation: Panel Evidence from India," World Development, Elsevier, vol. 37(2), pages 410-421, February.
  2. Morris, Sebastian & Pandey, Ajay, 2007. "Towards Reform of Land Acquisition Framework in India," IIMA Working Papers WP2007-05-04, Indian Institute of Management Ahmedabad, Research and Publication Department.
  3. Maitreesh Ghatak & Parikshit Ghosh, 2011. "The Land Acquisition Bill-- A Critique and a Proposal," Working papers 204, Centre for Development Economics, Delhi School of Economics.
  4. Sarthak Gaurav & Srijit Mishra, 2011. "Size-class and returns to cultivation in India: A Cold case reopened," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2011-027, Indira Gandhi Institute of Development Research, Mumbai, India.
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