New Delhi: In the shadow of a Formula One racetrack outside of New Delhi, a village of farmers who helped vote Indian Prime Minister Narendra Modi into power now fears he’s going to take their land.

Modi is one step away from passing a law that would make it easier for private companies to obtain property, one of the biggest hurdles to investing in India. Under the proposal, states will be allowed to force farmers to sell their holdings for companies making everything from missiles to cheap houses.

“This isn’t what we asked for—this isn’t what we thought he meant when he said good days were ahead," said Rambir Pehlwan, 38, a wheat farmer in Bhatta village who voted for Modi’s Bharatiya Janata Party (BJP) in national elections last year. “He was poor, and so we thought he would keep us in mind as he rose to power. We aren’t seeing that."

The bill is Modi’s biggest step yet to make it easier for companies to operate in India, and also his toughest political challenge since taking office 10 months ago. Opposition parties that control the upper house have vowed to block the measure, a move that would force Modi to employ a rarely used parliamentary tactic to get it passed.

“The new law takes India in the right direction," said Raj Kothari, a fixed-income trader at Sun Global Investments Ltd in London. “But there are a lot of ifs and buts that stand in the way. India’s land owners will have to cooperate and maintain peace and order for this policy to be successful."

Investments stalled

Since the previous government passed a 2013 law that required the consent of more than 70% of farmers for most land acquisitions, projects have stalled. The estimated backlog of investment in power plants, factories and mines awaiting approvals grew to about $392 billion in March, according to the Project Monitoring Group, a government body.

Modi issued an executive order in December that exempted investments in defence, rural infrastructure, affordable housing, industrial corridors or government partnerships from the need to win consent—a move that would encompass most of the stalled projects. Called an ordinance, the measure will expire if lawmakers don’t approve it in the session ending on Friday. Modi can try to extend it as long as he’s in power.

Last week Modi’s land bill passed through the lower house, where the BJP holds a majority, after he made several tweaks. They included scrapping a provision to allow private hospitals and schools on government-acquired land.

Joint session

Modi’s coalition controls about a quarter of seats in the upper house, making its passage improbable. The Congress party, which championed the 2013 land law and suffered its worst national electoral defeat ever last year, rallied more than a dozen parties to ask President Pranab Mukherjee to “protect the interest of our farmers" and implore Modi to avoid bringing the bill for a vote in the upper house.

“All the progressive, secular, democratic and forward- looking forces are determined to defeat the Modi government’s design to promote divisions and social disharmony," Sonia Gandhi, Congress’s president, told reporters on Tuesday.

That leaves Modi with the option of calling a joint session, a legislative maneuver that has been used only three times since India won independence in 1947. It was employed in 1961 to prohibit dowries for marriages, in 1978 to repeal a law establishing a commission to select bank employees and in 2002 to pass a tougher anti-terrorism law.

‘Widespread resentment’

“They can get it approved in a joint sitting of parliament because they have a comfortable majority," said D.G. Ahmed Khan, who teaches political science at the Banaras Hindu University in Uttar Pradesh. “There is widespread resentment among the farmers over this move, and such an approval will be considered as having been done to protect prestige and ego."

Since taking office, Modi has increased foreign investment in insurance and defense, promoted local manufacturing and increased transparency in coal auctions. The moves have helped put India’s stocks and currency among Asia’s top gainers over the past year.

Even so, he’s struggled to pass deeper reforms, including the land bill and a goods and services tax, and failed to revamp subsidies in the budget for the year starting 1 April.

The land bill would bring India back toward the policy in place from 1894 to 2013, when farmers were routinely forced off their land. They are demanding that at least 50% of property holders agree to acquisitions, and that barren land is prioritized for projects, according to Prabhakar Kelkar, All India General Secretary of the Indian Farmers’ Union.

Big business has cheered the proposal. The Confederation of Indian Industry, India’s biggest corporate lobby, said its approval by the upper house would “be a major boon to the infrastructure goals of the nation."

Modi fights

No matter when it passes, implementation by India’s 29 states may prove difficult, said Romita Das, South Asia associate analyst with Control Risk Group in Singapore.

“Land acquisition processes have long bedeviled foreign and domestic investments, and the 2013 Land Act made acquisition more complex, onerous and costly," Das said. “Even if the law passes in the current form—and that’s a big if—we do not expect regulatory and operational risks to significantly cease in the short term."

Modi has fought back against the law’s critics during rallies in central India this month and blamed political opposition for pitting India’s farmers against him. He urged those in rural areas to understand the need for land to build infrastructure for their own betterment, and called for parties to stop “instigating farmers."

“We are accused of being anti-farmer, but when I told opposition that I am ready to amend the bill, they couldn’t tell me one thing they wanted changed," he said on 5 March. “The poor need schools. The poor need hospitals. They can’t be built in the sky."

Violent protests

Land disputes have led to violence across India. In 2008, violent protests forced Tata Motors Ltd to scrap a $368 million factory in West Bengal state to produce the world’s cheapest car and shift to Gujarat, which was run by Modi at the time.

Outside of Delhi, the construction of the F-1 track and a 165-kilometer highway connecting the capital to the Taj Mahal’s home city of Agra led to violent protests in 2011. Four people were killed and vehicles were torched as farmers who didn’t consent to selling their land pushed for greater compensation.

Pehlwan lives in the area with his family of six on a wheat farm adjacent from property that’s already been acquired by the local government for development. He’s sure that if the land bill passes, his parcel will be up for grabs next.

“I’ll get some money, but will still have to go find work on someone else’s farm," he said. “Until then, I’ll just work on my farm and hope the bulldozers driving down the road aren’t coming my way." Bloomberg

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