Academic journal article Journal of Management and Public Policy

Social Impact Assessment of Projects Involving Land Acquisition in India: Implications of RFCTLARR Act, 2013

Academic journal article Journal of Management and Public Policy

Social Impact Assessment of Projects Involving Land Acquisition in India: Implications of RFCTLARR Act, 2013

Article excerpt


In 21st century land has emerged as a critical resource with respect to managing economic development, rapid urban expansion and industrialization; ensure food security as well as addressing the issue of sustainable development and climate change. Apart from economic considerations, people attach significant social and cultural values to it. Further, accessibility to land is not only economically important to the people; it also leads to a host of other benefits (Singh, 2014). The post-liberalization era has ushered new challenges to states with respect to infrastructure development as well as attracting investments for industrialization. Be it industrial development or infrastructural development, land, in all cases appears to be a critical issue.

For a developing state like Bihar, the problem has multiple impacts on implementation of development projects and attracting industrial investment. The unique characteristics of land, which is physically limited, immovable and cannot be produced and reproduced, has made pricing of land a critical exercise, especially in an imperfect land market like India. On the other hand, any development project brings with itself promise of prosperity, employment opportunities and better connectivity which have multiplier effects on economic development of the region. But alongside these positives, the displacement of vulnerable groups, loss of livelihoods for a certain section of society and disruption in daily socio-cultural activities also take place. Most of these negative consequences emerge from land being acquired from local population to set up plants, construct roads and bridges etc.

Post The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (RFCTLARR) Act, 2013, there has been a change in paradigm of land acquisition especially in the context of compensation, rehabilitation and resettlement issues. Social Impact Assessment of projects has become critically important and determining factor for land acquisition. Following Samanta (2015), the present paper tries to assess the land market challenges, in the context of Bihar, which have appeared as constraint for efficient land transaction and as bottlenecks for development projects and industrial investments. The RFCTLARR Act has created avenues to minimize conflicts related to land acquisition through the provision of Social Impact Assessment (SIA) study of each project before acquisition for public purpose. The SIA study can question the justification provided for public purpose, suggest alternative mechanism and can even recommend dropping the whole acquisition process. Given the importance of SIA study for land acquisition, the present paper attempts to explore the conceptual background, issues and challenges involved in conducting such a study in India in adherence to the RFCTLARR Act, 2013.

Land Market Challenges

Land markets are mechanisms that, provided there are appropriate institutional checks and balances, allocate ownership and use rights in a manner that allows land and its associated assets to be used in the most economical way. Given secure land rights, land markets can increase the incentive for people to invest and for financial institutions to lend, since land can be used as collateral as well as being the basis for production. An efficient and effective land market can improve the performance of a nation's economy and increase prosperity (Robert, Dale, & McLaren, 2007). Unlike other factors of production, labour and capital; land has several distinguishable features. It is also argued that the demand for land is function of economic growth and industrialization and urbanization in India cannot became broad based unless they are equipped with satisfactory solution for allocating land use that maximizes aggregate welfare (Bhattacharjee, Sinha, & Dutta, 2014). The market of land is argued to suffer from the problems of market failure which makes it difficult or impossible to price the land (Cheshire & Vermeulen). …

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