PM Modi dilutes land bill, wins Lok Sabha vote

By Nigam Prusty

NEW DELHI (Reuters) - India's government rallied its allies on Tuesday behind a land reform bill, setting the stage for a vote in the Rajya Sabha that will test Prime Minister Narendra Modi's ability to pursue his business-friendly agenda.

Amendments introduced by Modi's party to soften the impact of the reforms ensured the backing of most of his coalition partners and victory in a Lok Sabha vote. But they failed to placate opposition parties, who stormed out of the chamber.

Modi, 64, 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 his nationalist Bharatiya Janata Party (BJP) won a sweeping mandate in last May's general election, it lacks the votes in the Rajya Sabha to put those changes permanently on to 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 the BJP say the joint session route is viable but caution that it could cause political friction to escalate both inside and outside parliament.

Among the changes agreed by the BJP and its allies in the ruling coalition, the National Democratic Alliance, were limiting the breadth of an industrial corridor to 1 kilometre on either side of highways and railway lines.

It would also be compulsory to offer employment to one member of a farming family that has to sell its land, and a grievances procedure over land purchases would be established at local level.

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