Infra stocks gain after Cabinet approves certain amendments in Land Acquisition Act

Eleven infrastructure stocks rose by 0.03% to 5.53% at 11:00 IST on BSE after the Union Cabinet approved certain amendments in the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.

The announcement was made after market hours yesterday, 29 December 2014.

Meanwhile, the S&P BSE Sensex was up 4.28 points or 0.02% at 27,397.89.

Among infra stocks, IL&FS Transportation Network (up 0.03%), Hindustan Construction Company (up 1.2%), NCC (up 4.23%), L&T (up 0.99%), IVRCL (up 2.5%), Gammon India (up 0.77%), IRB Infrastructure & Developers (up 2.99%), Adani Ports & Special Economic Zone (up 5.53%), Unity Infraprojects (up 1.13%), and Valecha Engineering (up 1.17%) gained..

The Union Cabinet, chaired by the Prime Minister Narendra Modi, has approved certain amendments in the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. Proposed amendments meet the twin objectives of farmer welfare; along with expeditiously meeting the strategic and developmental needs of the country.

The Act came into effect from 1 January 2014 but it has been reported that many difficulties are being faced in its implementation. In order to remove them, certain amendments have been made in the Act to further strengthen the provisions to protect the interests of the 'affected families'. In addition, procedural difficulties in the acquisition of lands required for important national projects required to be mitigated.

States, Ministries and stakeholders had been reporting many difficulties in the implementation of this Act. Several suggestions came up in interactions with State Revenue Ministers and key implementing Ministries. Proposed amendments meet the twin objectives of farmer welfare; along with expeditiously meeting the strategic and developmental needs of the country.

Considered as a pro-farmer step amendments excluded Acts brought under RFCTLARR Act for Compensation and R&R. The existing Act vide Section 105 (read with Schedule IV) has kept 13 most frequently used Acts for Land Acquisition for the Central Government Projects out of the purview. These acts are applicable for national highways, metro rail, atomic energy projects, electricity related other projects etc. Thus a large percentage of famers and affected families were denied the compensation and R&R measures prescribed under the Act. The present amendments bring all those exempted 13 Acts under the purview of this Act for the purpose of compensation as well as rehabilitation and resettlement. Therefore, the amendment benefits the farmers and the affected families.

The second important aspect of the amendment is to make developmental and security related works much faster without compromising on the benefits/compensation to be given to the farmers. In the process of prolonged procedure for land acquisition, neither the farmer is able to get benefit nor is the project completed in time for the benefit of society at large.

Therefore the present changes allow a fast track process for defence and defence production, rural infrastructure including electrification, housing for poor including affordable housing, industrial corridors and infrastructure projects including projects taken up under Public Private Partnership mode where ownership of the land continues to be vested with the government. These projects are essential for bringing in better economic opportunities for the people living in these areas and would also help in improving quality of life.

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