Column: Why the land law needs fixing

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Updated: Sep 03, 2015 11:06 AM

The proposed amendments are central to the success of many of the govt’s policies to spur growth

Land ordinanceWith the land Ordinance having lapsed after being promulgated thrice, it remains to be seen what the Modi government will do to ensure that land acquisition for economic growth is not stumped.

The prime minister himself clarified that the government will not be repromulgating the land acquisition Ordinance. Undoubtedly, the change in position—by agreeing to hold back on some of the contentious clauses of the land Bill—has been one of the biggest embarrassments for the Modi government. Since it was voted to power in May 2014, the NDA government has been trying every possible means to get certain critical amendments to the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (LARR Act) passed. In the meanwhile, it took the ordinance route to this end several times. However, each time the government tried, it was unsuccessful in translating the ordinance into a full-fledged amendment in the law despite having a majority in the Lok Sabha.

In the recent meeting of the joint parliamentary committee on land Bill, the government seems to have agreed to drop most of the contentious amendments, bringing back the clauses related to consent of affected families and the mandatory social impact assessment (SIA).

In this column , we have tried to decipher the changes to the consent clause, a major bone of contention amongst the political parties.

The consent clause under the LARR Act necessitates the approval of at least 80% of the affected families in the case of land acquired by the government for private companies, and of at least 70% in the case of land acquired for public-private partnership (PPP) projects. Further, the acquisition of irrigated multi-cropped land is all but prohibited. The amendment Bill had sought to exempt land acquisition for defence, rural infrastructure, industrial corridors, affordable housing and infrastructure projects from the consent clause. It had also proposed that acquisition of ‘irrigated multi-cropped land’ will be allowed for the aforementioned projects.

The NDA government’s intent in changing the consent clause is easy to decipher. All the exempt sectors under the amendment Bill are critical from the perspective of economic growth of the country. With the opening up of FDI in defence, global majors have evinced considerable interest to set up shop in India and ‘make in India’. This interest has also translated into credible action with some important investments already undertaken. In this backdrop, there is a strong case for exempting defence from the rigours of the consent clause.

Infrastructure, including rural and urban housing and electrification, is another focus area for ramping up development and needs immediate attention. While the past decade has seen new cities come up, as satellites of existing cities in many cases, massive urbanisation is already taking place and is set to continue for the next 10-15 years. This requires major investments in housing so that our cities and towns are more liveable. With the changes in the land acquisition laws, one could have expected moderation of prices of houses as the pressures on the supply-side would have eased considerably and stalled housing projects could have restarted. Indian cities must shed their Manhattan-style skyscrapers and Africa-style slums mix.

The Make-in-India initiative has been one of the landmark announcements of the government. But establishing manufacturing hubs across India requires large tracts of land being available to set up the units that would populate these hubs. Relaxing the consent clause for this purpose, therefore, makes perfect sense. The other clauses of the amendment Bill have also sought to relax the stringent provisions of the LARR Act, which make the law appear like the ‘land non-acquisition Act’.

With the land Ordinance having lapsed after being promulgated thrice, it remains to be seen what the Modi government will do to ensure that land acquisition for economic growth is not stumped. One can only hope for the best.

CV Srikant also contributed to this article.

The author is partner, J Sagar Associates, Advocates and Solicitors. Views are personal

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