Business Standard

Govt approves ordinance to ease land acquisition

Amendment to do away with requirement of social impact assessment, consent of 70% landowners for PPP projects in infrastructure

BS Reporter New Delhi
With many infrastructure projects stuck for want of various clearances, the Union Cabinet on Monday paved the way for easing the land acquisition Act for public-private-partnership (PPP) and rural infrastructure projects.

It approved an ordinance to make amendments to the Right to Fair Compensation and Transparency in Land Acquisi-tion, Rehabilitation and Resettlement Act, 2013, put in place by the United Progressive Alliance government. The ordinance does away with the requirement of written consent from 70 per cent of landowners for PPP projects in the infrastructure and social infrastructure sectors. Also, social impact assessment won't be required for such projects.

  • Consent clause, social impact assessment and livelihood requirement to be abolished for PPP projects, affordable housing, industrial corridors, rural infrastructure and defence installations
  • Modification in retrospective clause, which stipulates annulment of acquisition if compensation isn’t paid or possession isn’t taken
  • No clarity on change in definition of ‘affected families’
  • Compensation requirements to be applicable for the remaining 12 central Acts, which the land law seeks to subsume

PPP projects account for 60 per cent of the Rs 18 lakh crore worth of stalled projects.

In terms of social impact assessment and consent of landowners, exemption has also been granted for projects pertaining to national security, as well as for affordable housing projects and industrial corridors.

However, no change has been made in the clause relating to compensation for the land acquired.

An official statement issued after the Cabinet meeting said due the prolonged process of land acquisition, neither did farmers benefit nor were projects completed on time.

Prime Minister Narendra Modi tweeted the changes would hasten processing, without compromising on compensation and relief and rehabilitation measures for farmers.

"Through this ordinance, we have tried to achieve a balance - farmers or others continue to get the higher compensation envisaged in the original Act, while procedures are relaxed for five purposes to meet the developmental needs of the country," Finance Minister Arun Jaitley said after a Cabinet meeting.

In the past few weeks, this is the third major reform initiated by the government through the ordinance route. Earlier, it had promulgated ordinances on raising the cap on foreign equity in private insurers, as well as on e-auction of coal blocks.

The retrospective clause, which stipulates land-acquisition proceedings will lapse in case compensation is not paid or physical possession is not taken within a mandatory timeframe of five years, has also been relaxed. According to the amendment, the clause will now be applicable after 10 years.

"Some procedural changes have also been made in the definition of land acquired by 'companies'; it has been widened to include 'entities'," said a senior official.

The Confederation of Indian Industry said it had always advocated the need for a simple and transparent land acquisition framework, which was commercially viable for industry. A section in the current law provides for amending 13 pieces of central legislation by January 1, 2015, to bring its rehabilitation, resettlement and compensation clauses in sync with the Act. "The compensation applicable under the land Act will also include these pieces of legislation," Jaitley said. The 13 Acts include the Coal Bearing Areas Acquisition and Development Act, 1957, the National Highways Act, 1956, the Land Acquisition (Mines) Act, 1885, the Railways Act and the Electricity Act.

The statement said the original Land Act had kept compensation out of the purview of these 13 acts, which led to denial of compensation to a large percentage of farmers and affected families.

It is unclear whether an amendment has been made in the definition of 'affected family'. Currently, the term includes all those whose livelihoods are affected for three years prior to the acquisition of land. In their discussions with the Union government, states governments had unanimously agreed the land Act hindered economic growth. The Act, which replaced the Land Acquisition Act, 1894, has also drawn criticism from industry.

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First Published: Dec 30 2014 | 12:59 AM IST

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