The antiquated and dysfunctional state of regulations concerning land acquisition creates serious economic inefficiencies. The 1894 Land Acquisition Act, which lays out key regulations, is more than a century old. Though the act has been amended several times, with the last major amendment in 1984, its basic provisions remain intact and the process of land acquisition continues to be archaic. At least two issues need to be addressed in the matter of land acquisition. First, if land is to be acquired from a private party, the government must define the “social purpose” for which it can be so acquired. Second, the price at which the owner is to be compensated must be calculated. The definition of “social purpose” to acquire land is not an exclusively economic issue. In the United States, the Supreme Court recently allowed “taking” private property for social purpose to include building a mall on the grounds that, without the mall, the town would not be able to raise enough revenue to survive.
