The Union Cabinet, if its meeting on Thursday is an indicator, continues to remain divided on key areas of reform. Mamata Banerjee vigorously protested the Land Acquisition (Amendment) Bill 2007 and Rehabilitation & Resettlement Bill 2007, while AK Antony and Jairam Ramesh reportedly expressed disagreement with the long-pending India-Asean free trade agreement. The Prime Minister must, however, put his weight behind getting these measures through Cabinet. One should note that the two legislations on land acquisition were presented to Parliament in late 2007 and were passed by the Rajya Sabha in February this year, after considering the report of the standing committee. Mamata?s objections are many, including the provision allowing the government to acquire 30% of the required land for private entities after they have purchased the first 70% on the open market. She also has reservations about limiting rehabilitation efforts to only those persons whose land has been acquired and lack of firm restraints on acquisition of fertile and irrigated land. The provisions of the land acquisition amendment Bill are, however, a major improvement on the original legislation as it restrains the use of government authority for acquisition of land for private purposes, a provision that has, in fact, rankled industry, which favours full acquisition by the government. The Bill is also more than fair to the original landowners by specifying that any resale of the acquired land would require the original landowners to be rewarded handsomely by providing them 80% of the capital gains. As for keeping compensation restricted to landowners, a national law can?t have an open-ended provision. Deserving cases not covered by this should be the remit of local administrations. The argument on irrigated and fertile land is specious. All the land that rapid industrialisation will require won?t make any appreciable difference to the availability of arable land.
In the case of the FTA, too, the objections raised are counterproductive. Remember, the first steps to set up the Asean-India regional trade and investment area were initiated in October 2003 and it was the civil strife in Thailand that prevented the signing of the FTA in December last year. This is the first multilateral FTA that India has negotiated and any further extension of the already protracted negotiations will only ensure that it will lag Asean?s FTA with China that takes effect next year. Indeed, the FTA may force greater pressures on some sectors of the economy like plantation crops and auto ancillaries. But hiding behind tariff walls is not an option we can afford anymore.
