LARR Act, 2013

In 2013, Parliament replaced a 119-year-old colonial law with one basic idea: pay people fairly, and tell them why.

MCQ Questions

IndEco0246

4x Rural Compensation

Up to 4 times market value in rural areas, 2 times in urban areas.

In Effect Since

1 Jan 2014

Replaced the colonial-era Land Acquisition Act, 1894

Consent Needed

70% / 80%

PPP projects / private projects, of affected landowners

Mandatory Study

Social Impact Assessment

Identifies affected families before acquisition proceeds

Unused Land

5-Year Return Rule

Unutilised acquired land goes back to original owners

The core shift: the 1894 Act let the state acquire land with minimal compensation and no rehabilitation duty. LARR ties acquisition to a Social Impact Assessment, real compensation multiples, and resettlement support.

⇩ Download as image

Indian Economymcqquestion.com

Must Know

• The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, is known as LARR for short. It took effect on 1 January 2014.
• It replaced the Land Acquisition Act, 1894, a colonial-era law criticised for giving the state broad acquisition powers, with weak compensation and no rehabilitation duty.
• LARR requires a mandatory Social Impact Assessment (SIA), before any large land acquisition proceeds. This studies who will be displaced, and how badly.
• It sets fair compensation at up to 4 times the market value, in rural areas. In urban areas, the multiplier is up to 2 times.
• For private projects, the Act requires the consent of 80% of affected landowners. For public-private partnership projects, it requires 70% consent.
• Beyond cash compensation, LARR mandates Rehabilitation and Resettlement (R&R) support. This includes alternative housing, jobs or livelihood support, and infrastructure at resettlement sites.

Good to Know

• Section 24 gives the Act retrospective reach. If an award was made 5 or more years before LARR’s commencement, and compensation stayed unpaid or possession was never taken, the acquisition lapses.
• A lapsed acquisition must restart, under LARR’s own terms. This has made Section 24 one of the Act’s most heavily litigated provisions.
• LARR also protects landowners from indefinite land-banking. If acquired land stays unused for 5 years, it must return to the original owners, or to a land bank.
• At first, 13 other laws were exempted from LARR, including the National Highways Act, 1956, and the Railways Act, 1989. These laws had their own, often weaker, compensation rules.
• A 2015 notification brought those 13 laws’ compensation and R&R provisions in line with LARR. On paper, landowners under any of these laws now get similar benefits.
• A separate 2015 Amendment Bill tried to ease LARR’s consent and SIA requirements, for select project categories. It repeatedly stalled in the Rajya Sabha, and was eventually allowed to lapse.
• The government pushed this through three ordinances instead, issued in December 2014, April 2015, and May 2015. Each one let five categories of projects skip SIA and consent rules. Parliament never converted any of them into law, and all three lapsed by August 2015.

Test Yourself

Please wait…

1. The LARR Act, 2013 replaced which older law governing land acquisition in India?

The Land Acquisition Act, 1894

The Indian Forest Act, 1927

The Essential Commodities Act, 1955

The Land Ceiling Act, 1972

 Loading…

 

Great to Know

• LARR marks a philosophical shift in Indian land law. The state’s power of eminent domain remains, but it now comes bundled with real, enforceable duties toward displaced people.
• Land is a Concurrent List subject. Several states have since passed their own amendments, in some cases weakening LARR’s SIA or consent requirements for specific project categories.
• States did this under Article 254(2) of the Constitution. It lets a state law override a central one on a Concurrent List subject, once it gets the President’s assent. Gujarat, Telangana, and Tamil Nadu are among the states that used this route. They exempted categories like industrial corridors and defence projects from LARR’s own consent and SIA rules.
• Courts have repeatedly closed the gap between LARR and older, narrower acquisition laws. See IndEco0037 — Land Reforms: Implementation and Debates, for the older reform story LARR itself grew out of.

Current Affairs

• 25 March 2026: The Supreme Court dismissed a review petition by the National Highways Authority of India, in the long-running Tarsem Singh case.
  • The Court had earlier ruled that landowners whose land was acquired under the National Highways Act, between 1997 and 2015, were entitled to solatium and interest — benefits the National Highways Act itself had denied them.
  • Dismissing the review, the Court held that a mere rise in projected liability was not valid grounds to revisit a settled ruling. The case reinforces LARR’s core principle: compensation standards should not depend on which specific law acquired the land.
• 2 January 2025: The Supreme Court roots compensation rights directly in the Constitution, in a separate case.
  • In Bernard Francis Joseph Vaz v. Government of Karnataka, the Court held that adequate compensation is inherent to Article 300A, the right to property. (Source: Anantam IAS)
  • The case involved land taken in 2003 for the Bengaluru-Mysuru Infrastructure Corridor Project, under a different law than LARR. (Source: Anantam IAS)
  • The ruling did not overturn LARR, but it extended LARR-style fair-compensation principles to older acquisitions still governed by the 1894 Act. (Source: Anantam IAS)