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Next big step: Land acquisition law on Modi government radar
The Economic Times, 22 Oct 2014, New Delhi: After rolling out big-bang fuel reforms, the Narendra Modi government has turned its attention to the land acquisition law that’s regarded as having a crippling effect on infrastructure and industrial development, a cornerstone of the administration’s plan to revive growth and ensure that its benefits reach the poorest.
Finance Minister Arun Jaitley held a meeting on Tuesday with all government departments and ministries with a stake in the matter to ascertain their concerns about the law and the issues they faced in implementing projects because of it. Sorting out the law is imperative — Modi has put his weight behind the ambitious ‘Make in India’ initiative to boost manufacturing and the new government is also looking to get infrastructure development moving again after years of stasis.
The legislation, enacted by the previous United Progressive Alliance government, has drawn flak from industry. It has also been criticised by government departments and states, including some Congress-led ones, for being cumbersome and leading to a halt in land acquisition, without which little development is possible.
“The meeting was called to essentially understand the kind of issues faced by various stakeholder ministries and departments,” a government official who attended the meeting told ET.
Another official who attended the meeting said departments such as highways are facing intractable hurdles in terms of escalation of costs and delays. The DIPP has also strongly criticised the law for curbing development. “Rehabilitation and resettlement is a huge issue… There are concerns about the inability to provide jobs in some cases,” said the official cited above.
The BJP’s victories in the recent Haryana and Maharashtra assembly elections have strengthened the resolve of the Modi government to send out clear signals on reforms. In the past few days it’s made changes in labour rules, besides decontrolling diesel and raising gas prices. This has perked up sentiment and led to expectations of more policy changes in the offing.
“Message on reforms is loud and clear… that some more tough ones are on the way,” said a senior government official.
The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, which was championed by former rural development minister Jairam Ramesh, took effect on January 1. The law was drawn up after violent clashes in West Bengal and elsewhere because land was said to have been taken away from farmers without adequate compensation. However, no land has been acquired for public purposes under the new Act because of some of its provisions.
The key issues highlighted by the departments are related to the consent clause definition of ‘affected family’, social impact assessment, retrospective clause for compensation and provisions for returning the unutilised land to original owners.
Jaitley had earlier said he would consult political parties on the law to see if exemptions could be carved out.
West Bengal has pitched for its own land acquisition policy while Tamil Nadu has termed the law an infringement on its autonomy. Uttar Pradesh has sought similar powers for the state government while Kerala has objected to the prior consent clause.
Rural development minister Nitin Gadkari had met state revenue ministers and secretaries in June but the issue was put on the backburner because of the assembly elections.
The current legislation replaced the Land Acquisition Act of 1894. It requires developers to get the consent of up to 80% of the people whose land is acquired for private projects and of 70% in the case of public-private partnership projects. This includes land acquisition under public purposes for industrial corridors and National Investment and Manufacturing Zones (NIMZ). Besides, it provides for compensation as high as four times of the total cost of acquisition in rural areas and two times in urban areas.