Land Acquisition in India: A Pareto and Kaldor-Hicks Perspective

Sankalp Sharma, Anil Giri, Tajamul Haque and Iuliia Tetteh
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Sankalp Sharma: 156 Science & Technology Building, Kent State University—Tuscarawas, 330 University Drive NE, New Philadelphia, OH 44663, USA
Anil Giri: University of Central Missouri, Warrensburg, MO 64093, USA
Tajamul Haque: The National Institution for Transforming India (NITI Aayog), New Delhi 110001, India
Iuliia Tetteh: Department of Agriculture, llinois State University, Normal, IL 61761, USA

Land, 2018, vol. 7, issue 2, 1-12

Abstract: Land acquisition by the government or a private entity to aid industrialization remains a critical policy concern. In 2013, The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act (LARR Act of 2013) became the premier land law in India. The Act creates a transparent process through which buyers can acquire land for industrialization and other commercial activities. However, the succeeding government was dissatisfied with some provisions in the original Act and floated two Amendment Bills in 2014 and 2015. In this article, we examine if the proposed removal of the “Consent” clause, a key provision in the original Act, is necessary. The removal would allow the government to impose eminent domain under certain conditions. We propose that removing the “Consent” clause is necessary for social welfare maximization and maintain that compensation based on marginal utility of income is the correct approach as it maximizes social welfare and helps maintain a balanced budget.

Keywords: land use; land policy; land acquisition; welfare economics; pareto efficiency; Kaldor-Hicks efficiency (search for similar items in EconPapers)
JEL-codes: Q15 Q2 Q24 Q28 Q5 R14 R52 (search for similar items in EconPapers)
Date: 2018
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