India eases land acquisition law
December 29, 2014, 12:27 pm

Last year’s legislation had ensured that buyers pay four times the market value for land earmarked for infrastructure projects in rural areas [Xinhua]

This was decided during a Cabinet meeting on Monday in New Delhi to discuss the ordinance (executive order) as a Parliament logjam had resulted in the blocking of several new legislation.

“The changes in Land Acquisition Act have been done after extensive consultations with states. There is a need to strike a balance between farmers’ interest & industrial growth,” Indian Finance Minister Arun Jaitley said at a press conference in New Delhi on Monday.

A law brought in by the previous government had placed restrictions on buying land, and strived to provide fair compensation to landowners and outlined measures to rehabilitate those affected by land sales.

The law, “Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Law 2013” passed by the Indian Parliament last year gave landowners the right to greater compensation but potentially raised costs for businesses and government.

The Narendra Modi-led government’s emergency executive orders on Monday to ease land-acquisition rules would overhaul the earlier law passed last year.

Monday’s decision by the Modi government would also remove a requirement to get 80 per cent of the landholders’ consent in the case of projects in defence, rural electrification, rural housing and industrial corridors.

The order will have to be cleared by the next parliamentary session which starts in February.

As the second largest growing economy in the world expands there have been increasing concerns for a rural populace that are being forced to sell their land for industrial and commercial use.

Last year’s legislation had ensured that buyers pay four times the market value for land earmarked for infrastructure projects in rural areas.

Earlier in July last year, global steel major POSCO had to pull out of a $5.3 billion steel mill project in India.

Land acquisition is a contentious issue in India, where small holdings by families with no source of income other than farming are common.

TBP and Agencies