Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (LARR) Act, 2013

The LARR Act, 2013 is the main central law that tells the government how it can take private land for public projects such as dams, roads, factories and railways. It also says how much money the landowners must get, and how families who lose their homes or livelihoods must be helped to start a new life.

In simple words, it is the rulebook for three things: taking land fairly, paying for it fairly, and resettling people properly. Its short name is often written as LARR Act or RFCTLARR Act.

Why was a new law needed?

Before 2014, land was taken under the Land Acquisition Act, 1894, a law made by the British. That old law let the government take land for almost any "public purpose" with little say for the owners. Compensation was often far below the real market price, and there was no legal duty to rehabilitate people who lost their homes or jobs.

Big dams and mines displaced millions of people, many of them tribals and small farmers, who never fully recovered. Protests such as those at Singur (West Bengal) and Nandigram in the late 2000s showed that the old law had lost public trust.

Where did it come from?

• 7 September 2011: The Bill was introduced in the Lok Sabha.
• 2012: A Parliamentary Standing Committee examined it.
• 29 August 2013: The Lok Sabha passed it. 4 September 2013: The Rajya Sabha passed it.
• September 2013: It received the President's assent and became Act No. 30 of 2013.
• 1 January 2014: It came into force and repealed the 1894 Act.
• December 2014: The government issued a Land Acquisition Ordinance to amend it, mainly to exempt some kinds of projects (like defence, rural infrastructure, affordable housing, industrial corridors) from consent and Social Impact Assessment. The ordinance was re-issued in 2015. An amendment Bill passed the Lok Sabha but not the Rajya Sabha, went to a Joint Parliamentary Committee, and finally lapsed in 2015. So the 2013 Act stands as it was passed.

How does land acquisition work under this Act, step by step?

1. Social Impact Assessment (SIA): First, the government gets an independent study of how the project will affect people: who will lose land, homes, jobs or common resources, and whether the benefits outweigh the costs. The gram sabha (village assembly) or local body is consulted, and a public hearing is held. An expert group then reviews the SIA.
2. Consent (only in some cases): If the land is for a private company, the consent of at least 80% of the affected families is needed. For a public-private partnership (PPP) project, at least 70% is needed. For projects where the government itself keeps the land, consent is not required, but consultation is.
3. Preliminary notification (Section 11): The government announces that it plans to acquire the land. After this, the land cannot be sold or changed without permission.
4. Objections and hearings: Landowners can file objections, which must be heard.
5. Declaration and R&R scheme: The government declares the final area and prepares a Rehabilitation and Resettlement (R&R) scheme for the affected families.
6. Award: The Collector decides the compensation amount and the R&R package for each family.
7. Possession: The land is taken only after compensation is paid and R&R entitlements are provided.

How is compensation calculated?

Think of it as a formula with three layers:

• Market value: The highest of three numbers: the official circle rate (minimum land price fixed by the state), the average of the higher-priced half of recent sales nearby, or the price agreed for private or PPP projects.
• Multiplier: In rural areas, the market value is multiplied by a factor from 1 to 2, depending on how far the land is from a town. In urban areas, the factor is 1.
• Solatium: On top of this, a 100% solatium is added. Solatium is extra money given because the owner is losing land against his or her will.

So rural owners can get up to about four times the market value, and urban owners about two times. Trees, buildings and crops on the land are valued and paid for separately. If the government uses the urgency clause, an extra 75% of the compensation must be paid.

What R&R must families get?

The Second Schedule of the Act lists the minimum rehabilitation entitlements. Key ones are:

• A house: in rural areas, built to the Indira Awaas Yojana standard; in urban areas, at least 50 sq m
• A choice of one of these: a job for one family member, a one-time payment of ₹5 lakh, or an annuity of at least ₹2,000 per month for 20 years (linked to inflation)
• A subsistence allowance of ₹3,000 per month for one year
• ₹50,000 for transport and a one-time ₹50,000 resettlement allowance
• In irrigation projects, land in the command area (the area that gets canal water) for families that lose farmland; fishing rights in reservoirs in irrigation or hydel projects
• An extra ₹50,000 for SC and ST families displaced from Scheduled Areas, and, where possible, resettlement in a similar ecological zone

The Third Schedule lists 25 basic facilities that every resettlement colony must have, such as schools, health centres, roads, drinking water and places of worship.

Other important provisions

• Food security (Section 10): Irrigated, multi-crop land may be taken only as a demonstrable last resort, within limits set by the state. If it is taken, an equal area of wasteland must be developed for farming. Linear projects like railways, highways and power lines are exempt from this limit.
• Scheduled Areas (Section 41): As far as possible, no land should be taken in Scheduled Areas (tribal areas under the Fifth Schedule). If it must be taken, it is only as a last resort, and the prior consent of the gram sabha, panchayat or autonomous district council is required, even in urgency cases.
• Return of unused land (Section 101): If acquired land is not used for its purpose within five years of possession, it must go back to the original owner, his or her heirs, or a state land bank.
• Old cases (Section 24): If an acquisition was started under the 1894 Act but no award was made by 1 January 2014, compensation is calculated under the new Act. Section 24(2) says some very old acquisitions lapse. In Indore Development Authority v. Manoharlal (2020), a five-judge bench of the Supreme Court held that an old acquisition lapses only if the government has neither taken possession nor paid compensation. This overruled Pune Municipal Corporation v. Harakchand Misirimal Solanki (2014).
• Fourth Schedule: 13 central laws, such as the National Highways Act, 1956, the Railways Act, 1989 and the Atomic Energy Act, 1962, have their own acquisition rules and were kept outside the Act. Through an executive order effective from September 2015, the Act's compensation and R&R benefits were extended to acquisitions under these 13 laws as well.

India's position and Indian examples

Land is a subject in the Concurrent List, as "acquisition and requisitioning of property" is Entry 42 of List III. So both Parliament and state legislatures can make laws on it. Several states, such as Tamil Nadu, Gujarat, Maharashtra, Telangana, Jharkhand and Andhra Pradesh, passed their own amendments that reduced the need for SIA or consent for some projects.

The right to property itself is no longer a Fundamental Right. The 44th Amendment Act, 1978 removed it from Part III and made it a constitutional right under Article 300A: no person can be deprived of property except by authority of law. In north-eastern states like Arunachal Pradesh, most land is owned by clans and communities under customary law, so working out who must be compensated, and how, is often harder than in the plains.

Commonly confused concepts

• Land Acquisition Act, 1894 vs LARR Act, 2013: The old Act had no SIA, no consent rule, no R&R duty and much lower compensation. The 2013 Act added all four.
• Compensation vs rehabilitation: Compensation is the price paid for the land and the things on it. Rehabilitation and resettlement is the help given to rebuild a family's life: a house, a livelihood and basic facilities. A family can get R&R even if it owned no land, for example a landless labourer whose work depended on that land.
• Consent vs consultation: Consent means the affected families must agree (80% or 70%), and without it the acquisition cannot go ahead. Consultation means they must be heard, but the final decision stays with the government.
• LARR Act vs Forest Rights Act, 2006 vs PESA Act, 1996: The LARR Act covers taking private land. The Forest Rights Act recognises the rights of tribals and forest dwellers over forest land, and diverting such land needs the gram sabha's say. PESA gives gram sabhas in Fifth Schedule areas powers, including being consulted before land acquisition.
• Article 31 vs Article 300A: Article 31 (Right to Property) was a Fundamental Right until 1978. Article 300A is a constitutional right, which means it can be enforced through a High Court under Article 226 but not directly through the Supreme Court under Article 32.

Issues, criticism and the way forward

• Industry view: Industry groups say the SIA and consent rules make acquisition slow and costly, and delay roads, factories and power projects.
• Community view: Affected people and activists say the safeguards are often weakened in practice. In December 2025, Parliament's Standing Committee on Rural Development and Panchayati Raj found that gram sabha consent is often a mere formality, that rural land is sometimes shown as urban to lower compensation, and that resettlement colonies often lack basic services.
• Undervaluation: Old circle rates and the exclusion of common resources like grazing land, forests and rivers mean that many families, especially tribals without formal titles, get far less than their real loss.
• State dilution: State amendments that exempt projects from SIA and consent create very different levels of protection across the country.
• The way forward: The Standing Committee recommended making SIA findings binding, requiring gram sabha consent for all acquisitions, no possession until resettlement sites are ready, counting women as joint owners, calculating a "livelihood value" beyond land value, and aligning the Act with PESA and the Forest Rights Act.

Concepts to Know

• Land acquisition: When the government takes private land for a public purpose by using its legal power, even if the owner does not want to sell, after paying compensation.
• Solatium: Extra money paid to an owner because the land is taken compulsorily. Under the 2013 Act it equals 100% of the compensation amount.
• Circle rate: The minimum price per unit of land fixed by the state government for registering property sales in an area.
• Annuity: A fixed amount paid at regular intervals, for example every month, for a fixed number of years.
• Scheduled Areas: Tribal-majority areas declared by the President under the Fifth Schedule of the Constitution, where special protections apply. The Sixth Schedule covers tribal areas of Assam, Meghalaya, Tripura and Mizoram.
• Urgency clause: A provision that lets the government take land quickly, skipping some steps like SIA, only for defence, national security or emergencies such as natural disasters.