Land Acquisition Bottlenecks: The Hidden Drag on India’s Infrastructure Push

Why in News ?

Land acquisition has emerged as the single largest cause of delays in major infrastructure projects reviewed under the PRAGATI (Pro-Active Governance and Timely Implementation) mechanism, surpassing issues related to environment, forest clearances, and law-and-order concerns.

Background & Context

India’s infrastructure-led growth strategy—covering highways, railways, industrial corridors, urban transit, and energy projects—depends critically on timely access to land. However, land acquisition has historically been a contentious issue due to competing claims between development objectives and the rights of landowners, farmers, and local communities.

While India has moved away from colonial-era acquisition practices, balancing economic growth, social justice, and federal governance remains a persistent policy challenge. The renewed focus under PRAGATI highlights that administrative and institutional issues, rather than legal absence, are at the heart of current delays.

Understanding Land Acquisition in India

Land acquisition refers to the process by which the government acquires private land for public purposes, including:

• Infrastructure development
• Industrial and manufacturing hubs
• Defence and strategic projects
• Housing and social infrastructure

Given India’s demographic pressures and development ambitions, land acquisition is foundational to economic expansion, yet continues to generate social resistance and political sensitivity.

Legal Framework Governing Land Acquisition

The current legal regime is governed by the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (LARR Act).

This law replaced the Land Acquisition Act of 1894 and sought to make acquisition more humane and participatory.

Key Features of the LARR Act

• Mandatory Social Impact Assessment (SIA)
• Consent requirements for private and PPP projects
• Compensation linked to market value
• Higher compensation multipliers for rural areas
• Statutory rehabilitation and resettlement (R&R) provisions

The Act reflects a shift from state-centric acquisition to a rights-based framework.

Compensation and Rehabilitation Provisions

Compensation under the LARR Act includes:

• Market value of land
• Multipliers (up to 2× in urban areas and 4× in rural areas)
• Solatium for compulsory acquisition

Rehabilitation measures include:

• Housing or housing allowance
• Employment, annuity, or one-time financial assistance
• Development of basic civic infrastructure

These provisions were introduced to address historical displacement without adequate livelihood protection.

Procedural and Administrative Challenges

Despite its progressive design, land acquisition remains slow due to:

• Time-consuming Social Impact Assessments
• Difficult consent processes in areas with fragmented ownership
• Frequent valuation disputes leading to litigation
• Weak coordination between Centre, States, and district administrations

Since land is a State subject, differences in administrative capacity, political priorities, and implementation efficiency further complicate acquisition timelines.

Impact on Infrastructure Projects

Land-related delays disproportionately affect:

• National highways and expressways
• Railways and dedicated freight corridors
• Power plants and renewable energy parks
• Industrial parks and urban metro projects

Even after financial approvals and technical clearances, unresolved land issues often lead to cost overruns, contractual disputes, and time overruns, undermining India’s infrastructure momentum.

News Summary: PRAGATI Review Findings

Recent PRAGATI reviews have highlighted that:

• Nearly 35% of unresolved issues in major infrastructure projects are linked to land acquisition
• Land delays exceed bottlenecks caused by:
  • Forest and environmental clearances
  • Utility shifting
  • Law-and-order challenges

This establishes land acquisition as a structural bottleneck in India’s development pipeline.

Government’s Current Policy Position

Despite the magnitude of the issue, the government has clarified that:

• There is no proposal to amend or dilute the LARR Act
• The focus is on:
  • Improving administrative coordination
  • Faster dispute resolution
  • Strengthening Centre–State cooperation

PRAGATI enables escalation of unresolved issues to higher institutional levels, ensuring accountability and time-bound decision-making.

Role of Monitoring and Coordination Mechanisms

Since its inception, PRAGATI has:

• Reviewed over 3,300 projects
• Covered investments worth nearly ₹85 lakh crore
• Facilitated completion of projects stalled for decades

Although fiscal savings are not precisely quantified, faster execution has helped unlock stalled capital and reduce economic losses due to delays.

Analysis: Why Land Acquisition Remains Critical

• Reveals the gap between progressive laws and ground-level implementation
• Highlights limits of legal reform without administrative capacity
• Underscores importance of cooperative federalism
• Demonstrates how social consent is as vital as financial clearance

Efficient land acquisition is not merely a legal issue but a governance challenge.

Way Forward

• Strengthen district-level administrative capacity
• Initiate early stakeholder consultations to build trust
• Digitise land records and ownership databases
• Institutionalise faster dispute-resolution mechanisms
• Enhance Centre–State coordination through platforms like PRAGATI

The focus must remain on execution efficiency, not legislative dilution.