Modi to dilute pro-business changes to land bill

By Nigam Prusty

NEW DELHI (Reuters) - The central government sought on Tuesday to break a political deadlock over reforms that would make it easier to buy land, in a test of Prime Minister Narendra Modi's ability to steer his business-friendly agenda through parliament.

In a day of hectic parliamentary dealings, leaders from Modi's ruling party proposed changes to soften the impact of the reforms in an attempt to secure the passage of a law that would replace a temporary government order now in force.

"The government will move amendments - there may be six to seven amendments," said a senior strategist from Modi's Bharatiya Janata Party (BJP), who requested anonymity due to the sensitivity of the matter.

Modi wants to overhaul a land acquisition act passed by the last government which, his backers say, has tied up billions of dollars in infrastructure and industry investments in red tape.

Yet although Modi's nationalist party won a sweeping lower-house mandate in last May's general election, he lacks the votes in the upper house to put those changes permanently onto the statute book.

Modi issued an executive order in December to exempt projects in defence, rural electrification, rural housing and industrial corridors from provisions of the 2013 law requiring 80 percent of affected landowners to agree to a deal.

He also scrapped the need for companies to conduct a social impact study for such projects, a process requiring public hearings that can drag on for years.

Failure to pass the law in both houses would lead the executive order, or ordinance, to lapse when the current session of parliament ends. That in turn could open the way for Modi to convene a rare joint session of parliament, where his coalition would have a majority on paper, to pass the land law.

Strategists from Modi's BJP say the joint session route is viable but caution that it could cause political friction to escalate both inside and outside parliament.

They are therefore proposing changes - including restoring a diluted consent clause for landowners - to placate critics who say the bill as it stands now risks being branded "anti-farmer".

The amendments were expected to be put to a vote in the lower house at around 5 p.m. (1130 GMT).

(Additional reporting by Rupam Jain Nair; Writing by Douglas Busvine; Editing by Alan Raybould)