Land Acquisition in India and Infrastructure Delays

Land Acquisition Latest News

• Land acquisition has been flagged as the single largest cause of delays in major infrastructure projects reviewed under the PRAGATI mechanism. 

Understanding Land Acquisition in India

• Land acquisition is the process through which the government acquires private land for public purposes such as infrastructure development, industrial corridors, housing, defence projects, and social infrastructure. 
• In India, this process has long been sensitive due to tensions between development objectives and the rights of landowners, farmers, and local communities.
• Given India’s ambitious infrastructure and industrial growth plans, land acquisition plays a foundational role in enabling economic expansion. 
• However, it also remains one of the most contested areas of public policy.

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Legal Framework Governing Land Acquisition

• The present legal framework is governed by the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (LARR Act). 
• This law replaced the colonial-era Land Acquisition Act of 1894 and aimed to make the acquisition process more humane, transparent, and participatory.
• Key features of the Act include mandatory: 
  • Social Impact Assessment (SIA), 
  • Consent requirements for private and public-private partnership projects, 
  • Enhanced compensation linked to market value, 
  • Comprehensive rehabilitation and 
  • Resettlement provisions for affected families

Compensation and Rehabilitation Provisions

• Under the LARR Act, compensation is calculated based on market value, with higher multipliers for rural areas and additional solatium. 
• The law also mandates rehabilitation measures such as housing, employment or annuity options, and provision of basic infrastructure for displaced families.
• These provisions were designed to address historical grievances where communities were displaced without adequate compensation or livelihood support.

Procedural and Administrative Challenges

• Despite its progressive intent, land acquisition remains a slow and complex process. 
• SIAs often take considerable time, consent requirements are difficult to fulfil in areas with fragmented landholdings, and valuation disputes frequently lead to litigation.
• Additionally, coordination challenges between Central ministries, State governments, and district administrations further delay acquisition timelines. 
• Since land is a State subject, differences in administrative capacity and political priorities across States add to implementation difficulties.

Impact on Infrastructure Projects

• Large infrastructure projects such as highways, railways, power plants, industrial parks, and urban transport systems are especially vulnerable to land-related delays. 
• In many cases, projects face cost overruns and time overruns due to unresolved land disputes, even after financial and technical approvals have been secured.
• As a result, land acquisition has emerged as a structural bottleneck in India’s infrastructure-led growth strategy.

News Summary

• Recent reviews of major infrastructure projects under the PRAGATI (Pro-Active Governance and Timely Implementation) mechanism have once again highlighted land acquisition as the single largest cause of project delays.
• Official assessments indicate that nearly 35% of unresolved issues in large infrastructure projects are directly related to land acquisition, making it the most significant impediment compared to forest clearances, environmental approvals, utility shifting, or law-and-order issues.

Government’s Current Policy Position

• Despite the scale of the problem, the government has clarified that there is no proposal to amend or dilute the existing land acquisition law. 
• Instead, the focus is on improving administrative coordination, timely escalation of disputes, and strengthening Centre–State cooperation.
• Through PRAGATI, unresolved issues are escalated from line ministries to higher institutional levels, enabling faster decision-making and accountability.

Role of Monitoring and Coordination Mechanisms

• The PRAGATI platform has reviewed over 3,300 projects involving investments worth approximately Rs. 85 lakh crore. 
• Many long-pending projects, some dating back to the 1990s, have been completed due to sustained monitoring and inter-governmental coordination.
• Although precise fiscal savings have not been quantified, faster project execution has helped unlock stalled investments and reduce economic losses caused by delays.

Way Forward

• The recent reviews reinforce that while strong legal safeguards for landowners are necessary, efficient administration, early stakeholder engagement, and cooperative federalism are equally critical. 
• Rather than legislative changes, the emphasis is on better implementation, dispute resolution, and institutional coordination.
• For India to meet its infrastructure and development goals, land acquisition reforms must focus on execution efficiency while maintaining the balance between development needs and social justice.

Source: TH | IE