New Delhi: Rural development minister Nitin Gadkari indicated that the government may change some provisions of the farmer-friendly land acquisition law, introduced by the previous Congress party-led government, to address concerns of the industry such as the rising cost of acquiring land and procedural delays.

The minister, however, said sections of the law that deal with compensation, rehabilitation and resettlement would not be changed. Gadkari’s comments came after a meeting with state revenue ministers in New Delhi. The states that sent representatives included Assam, Chhattisgarh, Delhi, Goa, Himachal Pradesh, Karnataka, Kerala, Madhya Pradesh, Meghalaya, Maharashtra, Telangana and Tamil Nadu.

Many state ministers who attended the meeting expressed reservations about many clauses in the law, barring the provisions relating to compensation, rehabilitation and resettlement, Gadkari said.

“We will take the suggestions of the state governments on board, compile all of them and present the report to Prime Minister Narendra Modi in the next 10 days," Gadkari said, adding that he had assured the states that his ministry would seriously consider all their suggestions. “If needed, we will take the suggestions to cabinet, and if needed we will then take it to Parliament (for incorporation)."

Amendments to the new land acquisition law may make it easier for companies and the government to acquire land from farmers, speeding up the implementation of stalled projects. Projects worth billion of dollars, including South Korean steel maker Posco’s $12 billion (around 72,000 crore) factory in Odisha, have been delayed because of problems related to acquisition of land.

The new law has pushed up land costs to 40% of the project cost from 5% earlier, according to Arpita Mukherjee, a professor at the Indian Council for Research on International Economic Relations, a Delhi-based think tank. “No private player can be attracted to invest in infrastructure and other such projects if the land costs are so high," she said.

Gadkari said the Centre had also asked states to modernize their land records so that the actual owners of the land receive compensation.

“As far as the interests of the farmer are concerned, particularly in compensation, rehabilitation and resettlement, our party and our government have already decided we will not compromise on any sections which are related to beneficiaries, particularly farmers. We will take maximum care of them," Gadkari said.

The Right to Fair Compensation, Resettlement, Rehabilitation and Transparency in Land Acquisition Bill, 2013, was approved by the Lok Sabha on 29 August and the Rajya Sabha on 4 September. It replaced an 1894 Act and seeks to strike a balance by providing fair compensation for the land acquired from farmers for industrial projects, but industry representatives fear the law will escalate land costs, hurting sectors such as manufacturing.

Former rural development minister Jairam Ramesh, who had drafted the land acquisition Bill, had said consent, compensation, rehabilitation and resettlement, and process and procedure formed the core of the new law.

Industry representatives had, however, expressed concerns that processes such as seeking consent of a majority of members of the gram sabha or all adult members of a village, and the social impact assessment (SIA) that aims to assess the social costs of the project vis-à-vis its benefits will be lengthy and long-drawn-out processes. They had also expressed concerns that the retrospective applications of the new law, to land previously acquired but where compensation not awarded and would now have to be computed according to the new law, would multiply their project costs manifold.

“The private sector should not be asked to involve itself in relocation and rehabilitation of the people" displaced when land is acquired, said Hardeep Lamba, assistant vice-president at real estate consulting firm Jones Lang LaSalle (India). “That should be the responsibility of the government or social organizations."

Many states, including Congress-ruled ones, were critical of the requirement that the consent of at least 70% of the people was necessary for acquisition of land for public-private partnership projects and 80% for acquiring land for private companies, according to a person present at the Friday meeting. The states also opposed provisions for SIA study, which has been made mandatory in all land acquisitions, saying that it was “time consuming and leading to cost escalation in small projects".

Another person familiar with the development said most Bharatiya Janata Party (BJP)-ruled states—Madhya Pradesh, Chhattisgarh and Goa, among others—were of the view that the land acquisition Act was passed last year in a big hurry, motivated by seeming political gains given that national polls were due in April-May. The opposition Congress party-ruled Assam and Kerala, too, had concerns about the new law.

“The revenue minister of Goa said that the Act was very difficult to implement," said the person cited above, adding that the Goa minister urged “the need for fast-tracking land acquisitions".

“The Madhya Pradesh minister said that the new land acquisition Act was delaying even small projects," the person cited above said. The newly formed state of Telangana sought 600 crore for modernizing and computerizing land records, the person added, declining to be named.

The BJP-led National Democratic Alliance government, which took office on 26 May, has made acceleration of economic growth a priority. In many of the interviews that Prime Minister Modi gave to newspapers before being elected, he emphasized his goal of making India into a manufacturing hub. In an interview to the Hindustan newspaper, Modi had said in April that if voted into power, his government would “take precise steps to promote infrastructure and manufacturing in a big way. Our priority will also be to create employment for the youth by focusing on manufacturing".

On Thursday, news reports cited Gadkari—who also holds the portfolios of transport and shipping, besides panchayati raj, rural development, drinking water and sanitation—as saying that 265 projects worth 75,000 crore were stuck for lack of clearances.

The minister, who is seeking to expedite the infrastructure in both highways, roads and ports across the country, said in the past few days, nearly 142 projects worth 35,000 crore had been streamlined.

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