Ordinance Raj begins, 2 days ahead of 2015: Land acquisitions can now be accelerated

landNEW DELHI: The Modi regime made good on its pledge to amend the land acquisition law, often accused of having brought development to a grinding halt, by unveiling an ordinance that will drastically free up the process in areas such as defence, affordable housing, rural infrastructure and industrial corridors.

This was one of two ordinances proposed on Monday and follows such moves on coal and insurance last week, making it clear that the government is determined to push ahead with policy changes through emergency decrees and won’t let the lack of numbers in the Rajya Sabha stand in its way. More such measures are expected, including one to alter legislation on mining.

The ordinance to amend the Right to Fair Compensation & Transparency in Rehabilitation & Resettlement Act, 2013, which came into force on Jan 1, has to be approved by President Pranab Mukherjee.

The legislation that was put in place by the UPA government is said to have stalled hundreds of projects. It had been introduced to amend legislation dating back to 1894 after violent protests broke out over land being taken away from farmers.

Finance Minister Arun Jaitley said the government has sought to be fair. “The priority of the government is to protect the interest of the farmers but it has to be balanced with the development needs of the society,” he said after the Cabinet approved the ordinance on Monday.

The ordinance relaxes norms for land purchases for affordable housing, defence and defence manufacturing, public-private partnership (PPP) projects, industrial corridors and rural infrastructure. Such projects won’t require the mandatory consent of land owners nor will they need social impact assessments to be carried out. Such assessments call for public hearings that can drag out the acquisition process. Under the current law, acquirers also need the consent of 70% of land holders in case of public and PPP projects and 80% in the case of private ones.

On the other hand, the government has retained other parts of the new law. “We have tried to achieve a balance where higher compensation and the entire resettlement and rehabilitation package will apply even to the 13 exempted Acts while the procedural rigours will be eased in relation to five purposes related to development,” Jaitley said.

The ordinance was welcomed by industry and experts, but Opposition politicians were critical.

Congress condemned the move, saying that every word changed in the law brought by the previous gov ernment will have to stand the scrutiny of Parliament during the budget session. “If you want to correct something, there is a method to it,” Congress spokesperson Abhishek Sanghvi said, adding, “Ordinance raj cannot last beyond the budget session… They (the government) are scared and afraid of public accountability.” The Confederation of Indian Industry welcomed the move as a serious commitment to economic reforms. “CII has always advocated the need for a simple and transparent land acquisition framework, which is also commercially affordable for industry,” it said in a statement. Economists said the move will be a relief to investors.

“Industry needs clarity on procedures related to land acquisition.

This is a first step in that direction and the legislation when passed by Parliament will give complete comfort to investors,” said DK Joshi of Crisil. ET had reported on November 11 that the government will take the ordinance route to bring about changes in the land acquisition Act.

By inserting Section 10 A, the government has defined five purposes for which the procedural requirements of the Act will not be applicable. “Projects vital to national securi ty and defence, rural infrastructure including electrification, affordable housing and housing for poor, industrial corridors, infrastructure and social infrastructure projects, including PPP, where ownership of the land rests with the government, will be exempt from the consent clause, the mandatory social impact assessment and food security,” Jaitley said.

The consent requirements under the law included land acquisition under public purposes for industrial corridors and National Investment and Manufacturing Zones (NIMZ). It provided for compensation as high as four times the market cost of the land in rural areas and two times in urban areas.

The decision to adopt the ordinance route was taken after the government failed to amend as many as 13 central pieces of legislation to bring rehabilitation and resettlement and compensation provisions on par with those of the new law on buying land across the country under the Act’s Section 105.

The Act specifically said that the laws — including the Coal Bearing Areas Acquisition & Development Act, 1957, the National Highways Act, 1956, and the Land Acquisition (Mines) Act, 1885 — had to be amended within a year to bring them in line with provisions of the new legislation.

The other laws that were to be amended include the Atomic Energy Act, 1962, the Indian Tramways Act, 1886, the Railways Act, 1989, the Ancient Monuments and Archaeological Sites and Remains Act, 1958, the Petroleum and Minerals Pipelines (Acquisition of Right of User in Land) Act, 1962, and the Damodar Valley Corporation Act, 1948.

Several states, including those ruled by Congress, government departments and industry had repeatedly criticised the law, which set the time frame for acquisition at 50 months, saying it would lead to huge cost escalations. Kerala and Karnataka had slammed the Act saying the identification of land owners was a Herculean task.

States such as West Bengal and Tamil Nadu saw the Act as an infringement upon their autonomy.

Industry had demanded removal of the consent clause from PPP projects, re-examination of the definition of ‘affected’ families, restriction of social impact assessment to large projects, modification in the retrospective clause for compensation and deleting the provision of returning un-utilised land to original owners.

Source: Economic Times
Dated: 30th December 2014

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http://economictimes.indiatimes.com/articleshow/45682175.cms?flstry=1&utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

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