“Impact of Amendment to the Land Acquisition, Rehabilitation and Resettlement Act”
Apart from red tapism, the cumbersome process of land acquisition is often cited as the foremost reason for the late start of various projects critical for the development. In order to turnaround the fortunes of Indian economy, new government has already announced that from now on, new projects would be welcomed with red carpet rather than red tapism.
But the other major roadblock, the cumbersome land acquisition process, could not be passed by the parliament due to non-majority of government in the upper house of Parliament i.e. RajyaSabha. Under article 123 of the constitution of India, government can pass an ordinance if parliament is not in the session.
Soon after the winter session of parliament was over, government took little time to announce three ordinances – Ordinance to facilitate land acquisition for certain projects, the Coal Mine Ordinance and the Ordinance to hike foreign cap up to 49 percent in insurance sector. An ordinance has the same force as an act of the parliament but once promulgated, ordinance should be passed by the parliament within six months.
The amendment ordinance to the Right to Fair Compensation and Transparency in Rehabilitation and Resettlement Act, 2013, passed by the erstwhile UPA government, omitted the consent clause, the mandatory social-impact assessment (SIA) and impact on food security in five areas viz defence, rural infrastructure, affordable housing and housing projects for poor, industrial corridors, and infrastructure or social infrastructure projects.
The ordinance will make it easy to acquire land for such key sectors kick-start the stalled projects worth USD300 billion. The earlier act required the consent of 80 percent of the affected families if land was to be taken for private parties and 70 percent for PPP projects. With the new amendment, now even multi crop land can be acquired.
However, the provisions related to rehabilitation and compensation were left untouched. The compensation amounting to four times the market price in rural areas and twice the market price in urban price was remained untouched. In the erstwhile act, all those who were dependent on the land were also needed to be compensated. But the new ordinance ensures that only land owners will be compensated. In short, the ordinance made it easier to acquire land for projects but didn’t make the land cheaper.
Restrictions on buying land, under the erstwhile law were among barriers holding up projects worth almost USD300 billion. As we all know that policy paralysis and slow growth have stalled the economy of India for the past few years, some bold measures were required to put the economy back on the path of higher growth.
The latest moves by the government have shown some resolve to the change the fortunes of the economy. While the livelihood security to farmers also remains critical for holistic development of country, government justified the amendment citing that it would meet the twin objectives of farmer welfare, along with expeditiously meeting the strategic and developmental needs of the country.
The procedures like social impact assessment which required a social impact study involving public hearings among the affected population was dragging the land acquisition process for several years. Industries like infrastructure, defence, housing, industrial corridor and energy would definitely see positive growth now with easier land acquisition procedure.
The industries exempted are the crucial from the strategic point of view as well as long term development of the country. The defence projects held up due to ambiguous and dragging acts not only affected the employment generation and growth but also indirectly affected the security of the country.
Since the ordinance granted exemption to the industrial corridors, manufacturing sector would also get a boost now which not only generate employment but also create localized growth engines. Thus in a way, latest move is also an impetus to make in India drive. It is true that some people who depend on the land for livelihood would lose employment but this is also stark reality that Indian agriculture sector is an example of disguised unemployment.
So with the development of industries, that surplus labour can be transferred from agriculture to industry and provided with more gainful employment. In this way, in the long term, balanced occupational structure can be achieved if industries are allowed to develop with least possible hurdles.
Though the opposition parties had opposed the ordinance calling it anti-farmer, many states like Haryana, Kerala, Karnataka, Maharashtra and Manipur have also demanded the dilution of act to make development projects move forward. Now it is to be seen if ordinance can get it passed in the parliament eventually and or a revised ordinance will be promulgated after six months to bring fresh investment and boost the manufacturing sector without trampling on the rights of the poor.