New Delhi: Government edged closer to overhauling a century-old land acquisition law on Wednesday by introducing a bill in parliament that aims to placate a rural voter base while also attracting much-needed infrastructure investment.
The current parliamentary session ends on Thursday and the bill is unlikely to be passed before parliament reconvenes later this year at the earliest.
Compulsory land acquisition for the public good is a contentious issue as crowded India seeks to industrialize, with major factories, housing and transport projects held up by conflicts over land.
Across the nation of 1.2 billion people, rural landowners and poor farmers complain they are not adequately compensated for land, while companies are wary of making large investments for fear that courts will strip them of their holdings.
The law, spearheaded by Congress party leader Sonia Gandhi and her son Rahul, is seen as crucial for the centre-left’s chances of winning state elections in Uttar Pradesh next summer.
In the poor coastal state of Orissa, protests by farmers have held up the construction of India’s biggest single foreign direct investment, a $12 billion steel mill belonging to South Korea’s Posco.
Farmers there say they will have no livelihood if they sell and accuse police of burning crops and beaten them to force them out on orders of corrupt officials in cahoots with business.
“For Posco, most farmers are just not willing to sell their land, said Madhuresh Kumar, a land activist with the National Alliance of Peoples’ Movement. He said farmers wanted their land replaced with farms of the same quality.
“Money can never replace land or livelihood, In urban areas maybe money can satisfy, not in rural areas. There should be a land for land clause.”
The bill has broadly been praised by industry for setting clearer rules, but there is also concern in the private sector that the law will significant increase the cost of buying land, which will then be passed on to consumers.
“Costs will possibly be very large, and if India’s plan really is to make more affordable housing, this (bill) is only going to make housing even more unaffordable,” Rajeev Talwar, executive director of DLF , India’s largest developer, told Reuters.
First created in 2007, the bill would replace an 1894 law written by the British.
It has until now been held up by political wrangling. The government of Prime Minister Manmohan Singh has been criticised for failing to push through more quickly this and other reforms seen as vital for driving growth.