PROJECT REPORT ON

Diversion of Land

Project submitted to:

Ms.Sonal Das

Submitted By:

Vivek kumar sai

Roll no. 146

Semester – VIII

Land Law

Submitted on:16/11/2015

HIDAYATULLAH NATIONAL LAW UNIVERSITYRAIPUR, C.G.

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Acknowledgements

I would like to express my heartfelt gratitude to my teacher, Ms. Sonal Das for her unstinted

support. The topic given to me for my project is one that I really enjoyed to do it.

Thank you, jurists, masters of law and various governmental departments for the expression

of your ideas, thoughts and immense amount of knowledge in the form of the various books,

articles and opinions. Without all of this, it would have been impossible for me to complete

my project.

My gratitude also goes out to the staff and administration of HNLU for the infrastructure in

the form of our library and IT Lab which was a source of great help for the completion of this

project.

Vivek kumr sai

Semester- VIII

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RESEARCH METHODOLGY

The research was based on descriptive sources of information comprising of books, newspapers as well as Internet. The topic has been extensively researched upon so as to accomplish the goal of completion of the current project report.

Sources of Data:The following secondary sources of data have been used in the project-

1. Books

2. Websites

3. Commentaries

Method of Writing: The method of writing followed in the course of this research paper is primarily analytical.

Mode of Citation:The researchers have followed a uniform mode of citation throughout the course of this research paper.

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Table of ContentsAcknowledgements................................................................................................................2

Introduction............................................................................................................................5

Land use and allocation change economy……….................................................6

Diversion of forest land for non forest land.........................................................8

Conversion of per urban agriculture land………… ............................................9

Impact of diversion of land in urban periphery selected………………………….11

compensatory mechanism problem and way forword…………………………….13

Conclusion............................................................................................................14

Reference.............................................................................................................................15

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INTRODUCTION

One of the important and yet less attended downsides of India’s major stride towards

economic development has been diversion of land.

The legal structure that governs land alienation and compensation in India is complex. While

policies pertaining to diversion of land from forest and agriculture to other uses seemed

conservative (and also conservationist), in practice they remained liberal and lacked

transparency. There is a lack of information sharing on the rationale for the diversion of land

and the basis and extent of compensation. The process of diversion of land from the forest or

agriculture sector is the outcome of a congruence of various vested interests – those of the

state, the private sector (often multinational corporations) and the local elites. Globalisation

has fostered these processes further through liberalisation of the land use policies. Land is in

limited supply and is the critical factor of production for almost all kinds of economic

activities as well as for human settlement (Shah et al, 2005). It is therefore essential that its

allocation across different economic activities and uses is based on sound theoretical

premises, combined with the ground realities of multiple objectives – some of which often go

beyond the narrowly defined goals of economic growth per se. In a predominantly agrarian

economy such as India, the entitlement to livelihood and access to factors of production,

especially land, are important objectives that need to determine allocation of land across

different uses and users. The allocation mechanism must not only address the needs of

economic activities or sectors (including housing) but also look into the specific needs of

various ecosystems, regions and communities.

The conservationist, hence conservative, policies pursued so far are prohibitive rather than

proactive in terms of evolving a rationale for allocating land for the rapidly growing sectors

other than the primary sector, which contribute more than three-fourths of India’s

GDP. But this does not mean absence of diversion to other uses. In fact, these policies have

given rise to processes and mechanisms that have proved counterproductive to the very cause

of conservation.

The issue of land allocation has been one of the most contested policy issues. It has triggered

many controversies, especially when developmental projects for irrigation, mining and other

infrastructure (like ports, etc.) have involved large-scale acquisition of land and/or

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displacement of the people. The latest is the controversy about special economic zones

(SEZs). In fact, urbanisation is the most important use to which land is being diverted.

2. LAND USE AND ALLOCATION IN CHANGING ECONOMYLand use and land markets have been subject to large number of regulations across countries

developed and developing. The basic rationale underlying state regulations is the non-

renewable nature of land, which is the basic factor of production. Land, besides being critical

for ensuring sustained economic growth, under different categories of capability and uses,

performs specific ecological functions. Each of the various uses, especially in primary sector

activities (such as crop cultivation, pasture development, plantations, livestock rearing, inland

fisheries and mangroves in the coastal areas) makes a specific contribution towards sustaining

diversity and thereby ecological balance. Moreover, land and its use or management is

important for facilitating drainage, hence governing groundwater regimes or catchments

(Government of India, 2006). This, in turn, has special significance for managing natural

resources on a watershed basis. Minerals beneath the surface land also have special

implications insofar as they are both exhaustible and non-renewable.

Finally, land, as noted earlier, plays a significant role in shaping the socio-cultural milieu in

predominantly agrarian economies. Although rooted in economic value as an ultimate source

of economic security, land becomes a symbol of social status and a means of deriving

political power. It is in this context, that various economies have tried to evolve a strategy for

land use and its allocation over different sectors. The most important thread underlying the

policy approaches across various economies is recognition of market failure in allocating land

across different economic activities, especially the shift away from the primary sector, where

intrinsic value of land as a natural resource is still retained. Obviously, marginal productivity

measured in terms of monetary value is not the appropriate indicator for determining the

diversion of land from the primary to other sectors in the economy.

The demand-supply dynamics, at a given point in time or even in the context of forward

trading and speculative transactions, may not completely capture the future as well as existent

value of land, and the forest, water and minerals embodied therein. This mainly leaves

land markets within urban and peri-urban areas, where land is already diverted from primary

sector activities and is subject to growth, which at least in theory, is possible to stipulate.

Economic theory, especially in the neoclassical tradition is thus most applicable to land

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markets in urban and per-urban areas. For the rest, perspectives emanating from various

disciplines or analytical frameworks, such as environmental and ecological economics,

political economy and development with equity and a human face, may have to be combined.

Unfortunately, a holistic perspective like this is yet to emerge for simultaneously addressing

the critical issue of land use, allocation and management.

Big dams have a peculiar feature of representing one of the most successful experiences in

India’s economic development and at the same time being a major culprit of displacement

and uneven development in the country. The big irrigation projects have contributed

significantly towards enhancing India’s capacity to produce food grains and thereby provide

employment as well as food security (beside flood moderation and drought mitigation),

hydropower generation and groundwater recharge . But the flipside of this development is

fairly large, especially when one looks at complex ecological issues based on their long-term

environmental impact. Displacement caused by large irrigation projects is considered to be

the most contentious, simply because of the fact that these encompass extensive tracts of

land. Most of the displaced populations are the inhabitants of the upper reaches. Owing to

poor quality of land there, they generally live in poverty. The construction of dams

necessitates their displacement, which only adds to their miserable condition. As the quality

of land is generally not good, it does not fetch high prices and, if land is provided, it is also

uncultivable. The net result of the entire process is that the poor are made to suffer while the

farmers in the lower reaches reap all the benefits. Thus, the equity issue remains unattended.

An important aspect of the draft Resettlement and Rehabilitation (R&R) Policy in irrigation

is provision of land in the command area. In fact, this should be the acid test for assessing the

benefit to cost ratio of an irrigation project. The experience over a long period of time,

however, suggests that this is not feasible – politically as well as administratively.

Alternatively, the norm of ‘land for land’ has been accepted as part of the R&R Policy. The

Sardar Sarovar Project (SSP) on the Narmada river in Gujarat presents exemplary evidence

on how the norm could be followed in actual practice.

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3.DIVERSION OF FOREST LAND FOR NON FOREST USE

The National Forest Policy, 1988 stood enunciated pursuant to Resolution No. 13/52-F, dated

12th May, 1952 of GOI to be followed in the management of State Forests in India. The said

Policy stood enunciated because over the years forests in India had suffered serious depletion

due to relentless pressures arising from ever increasing demand for fuel wood, fodder and

timber; inadequacy of protection measures; diversion of forest lands to non-forest uses

without ensuring compensatory afforestation and essential environmental safeguards; and the

tendency to look upon forests as revenue earning resource. Thus, there was a need to review

the situation and to evolve, for the future, a strategy of forest conservation including

preservation, maintenance, sustainable utilisation, restoration and enhancement of the natural

environment. It is this need which led to the enunciation of National Forest Policy dated 7th

December, 1988. The principal aim of the Policy was to ensure environmental stability and

maintenance of ecological balance. The derivation of direct economic benefit was to be

subordinate to the principal aim of the Policy . Under essentials of forest management it is

stipulated that existing forests and forest lands should be fully protected and their

productivity improved. It is further stipulated that forest cover should be increased rapidly on

hill slopes, in catchment areas and ocean shores. It is further stipulated that diversion of good

and productive agricultural lands to forestry should be discouraged in view of the need for

increased food production . Under the Policy a strategy was prescribed vide . The goal is to

have a minimum of one-third of the total land area under forest or tree cover. In the hills and

in mountains the aim is to maintain two-third of the area under forest or tree cover in order to

prevent erosion and land degradation and to ensure the stability of the fragile ecosystem.

village and community lands, which is the common feature in north-east regions, not required

for other productive uses, should be taken up for development of tree crop and fodder

resources and the revenue generated through such programmes should belong to the

panchayats where lands are vested in them and in other cases such revenues should be shared

with local communities to provide an incentive to them and accordingly land laws should be

so modified wherever necessary so as to facilitate and motivate individuals and institutions to

undertake tree farming. Vide para 4.3.1, the Policy lays down that schemes and projects

which interfere with forests that cover steep slopes, catchment of rivers, lakes and reservoirs,

geologically unstable terrain and such other ecologically sensitive areas should be severely

restricted. Tropical rain/moist forests, particularly in areas like Arunachal Pradesh, Kerala,

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Andaman and Nicobar Islands should be totally safeguarded. No forest should be permitted to

be worked without the Government having approved the management plan in a prescribed

form and in keeping with the National Forest Policy (See para 4.3.2). Under para 4.3.4.2 the

rights and concessions from forests should primarily be for the bona fide use of the

communities living within and around forest areas, specially the tribals. The Policy

recognizes the fact that the life of tribals and other poor people living within and near forests

revolves around forests and therefore the Policy stipulates vide para 4.3.4.3 that the rights and

concessions enjoyed by such persons should be fully protected and that their domestic

requirements of fuel wood, fodder, minor forest produce and construction timber should be

the first charge on the forest produce.

4. CONVERSION OF PERIURBAN AGRICULTURAL LAND

Four important features distinguish conversion of land in the urban fringe from the issues of

land acquisition and displacement noted above. These are:

1) Development of the urban fringe is the single most important

factor causing diversion of land.

2) The land is generally sold out by the owners rather than acquired; hence, there is presence

of a land market (though imperfect) in the urban fringe. This would imply that the

phenomenon is more of ‘voluntary’ rather than forced displacement.

3) The land in the urban fringe is generally more fertile as compared with wasteland available

4) There is a fairly well-developed theoretical literature on land markets and perspectives on

peri-urban development.in areas further away from urban centres.

There is a fairly rich and growing literature on the theme of conversion of agricultural land in

urban and peri-urban areas. It is neither the objective nor within the scope of this paper to

review the entire literature. The limited objective here is to understand the main

features of theoretical applications and empirical findings from studies that have gone into

examining the cost and benefit of land conversion. The vast literature on urban economics

provides a basic rationale for urbanisation and examines factors that determine the pace and

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pattern of urban growth in the midst of vast and, at times, stagnant rural economies,

especially in developing countries like India. Productivity differentials and growing

populations as well as underemployment in rural economies are the two basic forces

‘pulling’ and ‘pushing’ populations out of rural areas. Agglomeration economies, locational

economies and economies of scale and scope are other major factors operating on the pull

side. Growing disparities in public investment in agriculture and allied activities (vis-à-vis

other sectors) on the one hand, and basic amenities (in rural vis-àvis urban areas) on the

other, lead to further impetus for the push

factors.

The literature, while reinstating the inevitability of urban growth and the shift of the labour

force away from the primary sector, has paid little attention to the implications of these

spatial as well as sectoral shifts for the ‘determinants of the processes of land allocation

between rural and urban areas, or, equivalently between agriculture and nonagriculture’

(Bhadra and Brando, 1993: 2). The urban economics literature usually treats the role of the

rural sector as residual, and most of the analyses employ the partial equilibrium model in

isolation of the agricultural economy.

India, like most developing economies, is also characterised by the phenomenon of over-

urbanisation, owing mainly to the push factors driving large number of in-migrants to the

urban centres. This raises a question as to whether the low level of industrialisation (and

employment growth therein) will ever reach a scale to lift a large proportion of the population

to income levels high enough to initiate the process of de-concentration of urban centres

(Vining et al., 1986). This implies that urbanisation, given the population dynamics and

sectoral imbalance in terms of output and employment growth, is a reality to reckon with.

Recognising the close interface between the agriculture and nonagriculture sectors and

between rural and urban economies, some of the relatively recent strands in urban economics

have laid increasing emphasis on peri-urban environment or ‘rurban’ development (Allen,

2003). Prima facie, the new perspective is built on the rural–urban continuum and seeks to

retain, to the extent possible, rurality, while planning for urban development and natural

resource use and/or strengthening the co-existence of rural–urban features within and in the

periphery of urban areas. Environmental planning and management of peri-urban areas should

therefore draw on three distinct fields:

rural, regional and urban planning. This is so because ecological,economic and social

functions performed by the peri-urban area affect both urban as well as rural areas. In this

situation, the debate over ‘compact’ vs. ‘expanded’ cities assumes special significance

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(Richardson et al., 2000). Whereas the former seeks to minimise diversion of agricultural

land, the latter may open up new avenues for agriculture and related services to cater to the

urban demand, by retaining basic elements of natural resource management and rural

economies. The second approach may require broad-based development of infrastructure as

Both have strengths and weaknesses. What is therefore needed is a comprehensive analysis of

cost benefit under alternative scenarios of growth in rural economies and patterns of

urbanisation. Such analyses have until recently been more or less missing.

5. IMPACT OF DIVERSION OF LAND IN URBAN PERIPHERY: SELECTED EVIDENCE

Land conversion surrounding urban centres presents a typical scenario, different from that in

most other conversions, say forest or remote rural areas. What makes land conversion in the

rural– urban fringe4 different is the fact that most urban centres evolved

originally because of the natural endowments of the area.5 Thus, the fringe lands are

generally more fertile and have been put to agricultural use. With increasing population

pressure, such lands are bound to feel the strain.

The situation is further complicated by an aggregation of uses by a variety of stakeholders. Even

the farmers living in the area might find non-agricultural income sources to be more

profitable and may go for land speculations .

Evidence from CalcuttaThere is a small but growing literature examining the impact of urbanisation, especially

diversion of agricultural land, on the rural economy and communities. Using a dual economy

model in the context of Calcutta Metropolitan District in India, observed that conversion of

rural land into urban uses may lead to improvement of aggregate welfare for the regional

economy. However, this observation is subject to the limitation that the welfare impact is

shaped by the characteristics of urban economies. The statistical results, as in the case of

many developing countries, appear to support the hypotheses of over-urbanisation. This, in

turn, may reinstate the case of broad basing the farm economy, which may give a further

boost to non-farm activities, in both rural areas and small/medium towns.

Unruly development in New DelhiThe pressure of increasing urban space has been felt most severely in New Delhi, particularly

in the past two decades. The rapid expansion of urban boundaries to the bordering villages

has caused widespread changes in the land use and livelihood patterns in these villages. In a

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detailed analysis of a rural-turned-urban block in northern Delhi (Bentinck, 2000), the impact

of urbanisation on the intertwined aspects of land use and occupation has been found to be

largely positive.

Urbanisation of these villages has brought them physically and socially closer to the

metropolitan city and much of the benefits accrued can be explained by the increase in

opportunities to commute to the city regularly. This has encouraged the village dwellers to

opt for formal and informal work in the service sector in the city. But the real boom in the

economy in the fringe areas has been brought about by a surge in the rent and tenancy

business. Most of the factories and enterprises set up in these areas belong to the city

dwellers, hence the owners – the erstwhile large farmers – realise good amounts on the rented

land. Very few villagers have gone for the industrial activity themselves, probably for the

lack of experience and training, and have instead preferred joining government service or

entering the transport business.

This does not mean that only the large farmers have benefited. The marginal farmers and

landless and migrant labourers have all entered the service sector, joining white or blue collar

jobs, depending on their educational level. Of these, few of the economically better villagers

have opened small commercial units; the migrant class has preferred to work in the newly

created small manufacturing units in the village itself.

Another notable aspect of urbanisation in the fringe areas in New Delhi has been that

concerning agricultural activity. Many of the farmers have continued with agricultural

practices, of course with increasingly intensive cultivation and changes in cropping patterns.

Thus, floriculture and horticulture, fuelled by a huge market in the city, have replaced staple

crops. Many of the villagers have even gone for high-value perishable crops, with some

opting for marketing the produce themselves with a view to reaping higher benefits.

Similarly, dairy farming has also signified gains to the farmers. Urbanisation also has had

some adjunct benefits for agricultural activities, for instance easier access to fields through

better roads, flood prevention and so on. Thus, the net effect of urbanisation on agriculture in

the fringe villages is also found to be positive. All this has been compounded by an obvious

increase in urban infrastructure facilities and amenities in these villages. The electricity and

water supply and, more importantly, health services have greatly improved, bringing

increased awareness about health and hygiene.

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Thus, it can be largely inferred that urbanisation of the fringe villages has had a positive

impact on the socio-cultural and economic lives of the original dwellers, across all classes.

The obverse side of the story stands mainly on ecological concerns. Increased industrial

activities resulted in a sharp increase in various types of pollution. This, in turn, has had a

very bad effect on the health of poor labourers, who generally live in slums close to the

factories. Several incidences of asthma and tuberculosis have been found since the

establishment of industrial units. Second, rapid population increase in these villages has

resulted in increased congestion. The richer erstwhile landowners have moved out from the

villages and settled in the city or elsewhere.

6. COMPENSATORY MECHANISMS: PROBLEMS AND WAY

FORWARD

Although there are clearly laid down norms and procedures for compensation under the Land

Acquisition Act, the actual practice is far below the provisions made in the policy.7 We do

not intend to get into the details of the critical gaps in the process of acquiring land. The

following aspects assume special significance in this context:

Multi-stakeholder agency to inform, negotiate and oversee the processes of land

acquisition and compensation;

Assured financial provision for supporting resettlement and rehabilitation of the PAPs;

Transparency and scope for negotiations within a stipulated sphere;

Monitoring over a longer period of time;

Ensuring avenues for productive investment of the one-time cash compensation received

by farmers selling land/PAPs receiving compensation.

The draft R&R Policy proposes a special institutional mechanism to take care of these aspects

but, essentially, an agency like this ought to be outside the state’s domain.

The bottom line is that if the project cannot pay for the cost of compensation and/or the state

is unwilling to accept checks and balance through the agency of the people, especially the

PAPs, this may lead to a primitive form of capital accumulation as noted by Chandrasekhar

(2006). In this case, society may have to be prepared to give up the expected benefits from

developmental projects that exclude people who lose their basic source of livelihood.

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Conclusion

The conservationist, hence conservative, policies pursued so far are prohibitive rather than

proactive in terms of evolving a rationale for allocating land for the rapidly growing sectors

other than the primary sector, which contribute more than three-fourths of India’s

GDP. But this does not mean absence of diversion to other uses. In fact, these policies have

given rise to processes and mechanisms that have proved counterproductive to the very cause

of conservation.

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Reference

Chhattisgarh land revenue code

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