Given how land acquisition for even central road and railway projects had ground to a halt, it was understandable that the central government wanted to try and get the UPA’s Land Acquisition Act amended. And given how various chief ministers of states, including some Congress-ruled ones, had agreed the Act had serious shortcomings—including at a meeting held by then rural development minister Nitin Gadkari—the government probably thought this was low-hanging fruit. As it turned out, the state governments had one stand in private, but quite another in public. In the event, the government’s Land Acquisition Bill became a big bone of contention, and a rallying point for the Opposition. Indeed, with the government now portrayed, completely incorrectly, as a hand-maiden of corporate India which wanted to snatch away land from a poor peasantry, this put paid to other initiatives. With a suit-boot-ki-sarkaar tag already sticking, this is what probably caused the government to go slow when it came to, for instance, raising gas prices or pushing privatisation—also issues where the same pro-corporate bias could be alleged.
With the government badly trapped, prime minister Narendra Modi did well to call for a meeting of the Niti Aayog’s Governing Council which comprises key Cabinet ministers along with all state chief ministers. A meeting of this sort is always important because, while the Centre can make policies, they have to be implemented in the states. Tuesday’s meeting was even more important because, though the Congress chief ministers boycotted it, a new formulation seems to have gained legitimacy. Briefing the media after the meeting, finance minister Arun Jaitley said that while various chief ministers put forward their points of view—the Punjab chief minister said the state was able to acquire land even under the UPA’s law—there was a sizeable chunk who felt that the Centre should try its best to develop a consensus, but were this not possible, the Centre should help the states pass their own law.
This is the policy the Centre had adopted on labour reforms initially. Instead of taking on powerful trade unions, it simply allowed states like
Rajasthan to make its own changes like allowing firms with under 300 workers to shut without government permission—under Article 254(2), if a state law is in contravention of a central law, it can be allowed to function provided the President of India gives his assent. Indeed, while the Centre is pushing several amendments to labour regulations—a big labour conference is to be addressed by the prime minister next week—it would be a good idea to allow progressive states to amend their labour laws as well, and help in getting the President to sign on. In the case of land laws, Rajasthan’s Bill has already been cleared by the select committee of the assembly with some minor changes apart from increasing the proposed compensation for farmers. It doesn’t really matter if the Opposition parties, and the media, view this as the government backing down on the land Bill as long as enough states change their laws in order to make investing in India easier.