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New Delhi:

The government may be close to pulling off one of India’s most significant policy changes with a near consensus among political parties on a new land acquisition law, taking the country to the verge of removing what’s perceived as the biggest impediment to the next wave of industrialization.

At the conclusion of an all-party meeting convened by the Congress-led United Progressive Alliance (UPA), Sushma Swaraj, leader of the opposition in the Lok Sabha and a senior leader of the Bharatiya Janata Party (BJP), said her party would back the Right to Fair Compensation, Resettlement, Rehabilitation and Transparency in Land Acquisition Bill, 2011, in Parliament.

The existing legislation, over 100 years old, has made it difficult for the acquisition of land to set up new projects. The new law seeks to strike a balance by providing fair compensation for the land acquired from farmers for industrial projects.

The new law, a key reform initiative, is expected to be passed in the budget session resuming on 22 April. Together with the proposed legislation on food security, it could potentially help the Congress party retrieve some of its prestige among voters as well as investors.

Among the controversial provisions on which the political parties, which met for the second time this month to iron out their differences, have reached consensus are an enabling provision for states to enact laws on the leasing of land, ensuring the right to fair compensation for owners and tenants as well as transparency in acquisition.

The Left parties, which insisted on 100% consent from landowners as well as those affected, were unhappy and said they would push for amendments when the UPA moves the revised Bill for approval.

Indian industry was not enthused by the plan.

“This Bill, as per our understanding, will further elongate the process of land acquisition for industry. It would take from three to five years on an average to acquire land. Moreover, we understand that the Bill still provides for consent from 80% of the affected families, which will delay the process and also act as a deterrent for the industry," A. Didar Singh, secretary general of the Federation of Indian Chambers of Commerce and Industry, said in a statement.

Similarly, the Confederation of Indian Industry lobby group said in a release that “agglomerating land from numerous owners is not a task which the corporate sector can do effectively, especially in the absence of proper land records and with small, scattered land-holdings".

“A balanced approach to land acquisition that takes care of needs of all stakeholders and promotes industrialization and inclusive growth is the need of the hour," it said.

The UPA government wants to make it mandatory for companies buying land to win the approval of 80% of land holders; for public-private partnership (PPP) projects, 70% of landowners need to give consent, according to the draft Bill approved by the cabinet in December.

The new Bill seeks to replace the colonial-era Land Acquisition Act, 1894, that allows the state to acquire land at cheap rates if it believes there is a larger public benefit such as the creation of jobs.

The issue had become contentious after efforts to forcibly acquire farmland for industrial projects resulted in violent protests in West Bengal and Orissa.

The members (of various political parties) have evolved a consensus on the Bill," Congress leader and parliamentary affairs minister Kamal Nathsaid after an all-party meeting on Thursday. “Of course, there cannot be unanimity, (but) everybody has largely agreed on the need for the Bill."

Nath also met Swaraj over the Bill and on the functioning of Parliament. “The land acquisition Bill will be moved in the Lok Sabha and the Rajya Sabha. The business advisory committee will fix the date for the tabling," Nath said.

Political parties had last met on 9 April to resolve their differences over provisions in the proposed land acquisition Bill.

On Thursday, “all political parties said we need this Bill in this session" given that it has been in the works since 5 September 2011, said rural development minister Jairam Ramesh. “I am hopeful that if Parliament functions, we will be able to get this Bill through," he said.

The current form of the Bill is vastly different from the 2011 version, Ramesh said, adding: “The new Bill is one that recognizes that you need to be sensitive to investor sentiment."

One of the BJP’s suggestions that the government agreed to relates to enabling states to lease land for PPPs or private industry use. “We have agreed to an enabling provision that will enable states to use the leasing option for all projects if they so desire," Ramesh said.

The government also agreed to another suggestion by the BJP, the Janata Dal (United) and the Shiv Sena to offer adequate compensation to original owners who have recently sold their land.

“There were worries that a lot of land has been purchased after 5 September 2011, (when the Bill was first tabled in Parliament) for the purposes of speculation," Ramesh said. “They feel that this land has been purchased in anticipation of this Bill being passed, so that guys who purchase it end up getting full benefits of compensation (and) the landowner or the farmer does not get anything."

The Centre agreed to introduce a provision in the law to ensure that the extra compensation given under it is shared with the original landowner if a state government acquired land that had been purchased after 5 September 2011, he said.

“The principle has been agreed to," the minister said, adding that it would be decided later if the compensation for farmers should be 40% or 50%. “We will work out the exact formulation and show it to Mr (Arun) Jaitley (leader of the opposition in the Rajya Sabha)," the minister said.

The BJP did not renew its earlier demand that the Bill be referred to the standing committee, said D. Raja, a leader of the Communist Party of India, who attended the meeting.

The government also agreed to incorporate some suggestions made by the Communist Party of India (Marxist), or CPM, Ramesh said.

“There are powers that are given to the government to amend the schedules (sections that refer to compensation and resettlement and rehabilitation). They (CPM) don’t want that power to be misused to dilute the compensation and rehabilitation package. So we have agreed that we will put in a proviso that the power to amend the schedule is in such a manner that the existing resettlement and rehabilitation and compensation do not get diluted," the minister said.

The other suggestion was to compensate tenants of landowners whose land had been acquired. Previously, tenants—who tilled land belonging to owners—were eligible only for rehabilitation packages and not compensation. The government has now agreed to give compensation to the tenants as well.

“Land use should be socially desirable, scientific and pro-people," said Raja. “At a time the government is talking about food security, permitting agricultural land for other purposes in the name of public purposes and public-private participation is not advisable."

The government, however, rejected suggestions from the Left that the permission of 100% of the landowners in an area should be taken before their land is acquired, Ramesh said. The West Bengal government is at liberty to bring in a law of its own seeking the permission of 100% landowners for the purchase of land, he said.

Amrit Raj and Bloomberg contributed to this story.

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