1. Landing an opportunity: Exclusions for defence & infra, no cheer for industry

Landing an opportunity: Exclusions for defence & infra, no cheer for industry

Given how the UPA has made land acquisition – including purchases by the private sector...

By: | Updated: December 29, 2014 10:21 PM
Land Act, Land Act ordinance, Land Acquisition Act

Contrary to what finance minister Arun Jaitley had been saying till recently, the ordinance provides significant relief to not just PPP projects. (PTI)

Given how the United Progressive Alliance (UPA) has made land acquisition – including purchases by the private sector – next to impossible in terms of both costs as well as time taken, the National Democratic Alliance (NDA) government has done well to try and untangle the knot to a large extent. Of course, getting the Ordinance on this through Parliament will still be an uphill task given how the Opposition has been behaving; perhaps the government will have to try and get a joint session convened to ensure the land Ordinance gets ratified. There is, based on the broad details announced by finance minister Arun Jaitley on Monday, still no relief for industrial projects where land can either be bought by the private sector firm or be acquired for it by the government.

In these cases, social impact assessments will have to be done and, after this, compensation including R&R will have to be paid. Given the timelines in the earlier Act, this could mean a delay of up to 5 years in just land acquisition. Of course, the saving grace here is that it is up to the states to decide at what threshold level these provisions will apply if land is bought by the private sector. In the case of 13 Acts including the National Highways Act, the cost of buying land will go up dramatically since the compensation and R&R provisions of the Land Acquisition Rehabilitation and Resettlement Act (LARR) will apply. Once again, a lot depends on each state. So, while the original LARR envisaged a ‘factor’ of between 1 and 2 to be applied to the ‘market value’ of the land in rural areas – a ‘solatium’ equivalent to this was also to be paid in addition – Maharashtra’s draft LARR had kept the factor at 1.

And contrary to what finance minister Arun Jaitley had been saying till recently, the ordinance provides significant relief to not just PPP projects. Five areas have been demarcated for relief, and land acquisition in these areas will not be subject to either social impact assessments – which not only take time, but can also derail a project on grounds it is not really beneficial – or the consent clause where 80% of people have to agree to the project. These 5 areas include defence and defence production – along with the recent changes in FDI rules and faster clearances of defence orders, this is a big boost for defence production and make-in-India. Others sectors which will get relief include rural infrastructure including electrification, affordable housing, industrial corridors and the townships that are part of them, and infrastructure under PPP provided – in the last case – the ownership of land remains with the government. As in other cases, land acquisition/purchases will have to pay the compensation and R&R as per the LARR Act.

For those interested in developing projects, one big bottleneck has been removed; it is now up to the states to help smooth land acquisition/purchases for areas not touched by Monday’s Ordinance. Given how the government has kept the interests of farmers paramount by making no change in compensation or R&R for any category of buyer, including the government itself, the ordinance should ordinarily sail through Parliament. But these are not ordinary times, so a joint session may still have to be resorted to.

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  1. G
    Dec 30, 2014 at 5:51 pm
    Get Latest news from around the world :vishwagujarat/en/
    1. B
      Dec 30, 2014 at 1:11 am
      Bring the bill the the RS in the budget session. If Govt is not allowed to present and vote, re-promulgate the ordnance. If voted no, call the joint session.
      1. J
        Dec 30, 2014 at 10:10 am
        Land is big resource in india whether there is unlimited corruption, black money. The SIT should specifically tARGET THEM AND ALSO THE sez ZONES ISSUED UNDER PREVIOUS GOVT. AND THEN MORE CHANGES SHOULD BE MADE IN lnd acqjuisition. India has what you can say the worst kind of chrony capitalism. Just look at what these people did in PSB, not to mention SEBI is now investing serious cases in stock market, we should forget 2G and coal scam. While i am all for supporting industry but india needs to clean up its private sector too, it is way too dirty.
        1. P
          Palanisamy (USA)
          Dec 30, 2014 at 9:29 am
          Well, when BJP was in opposition, it did not behave well at all. It was much more unrulier than now.
          1. S
            Dec 30, 2014 at 6:52 pm
            these scamgresis will just make all the loud noises when certain pro development measures are taken .for scamgress governece only means pering,minority appeasment and riotting all of which is done by ggogoi excellently.
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