Finance Minister Arun Jaitley Finance Minister Arun Jaitley

In a bid to ease the process of acquiring land, the Union Cabinet on Monday recommended the promulgation of an ordinance to amend the Land Acquisiton Act, 2013, by including five new categories of projects that would not require prior consent from affected families as well as Social Impact Assessment (SIA). These include projects related to defence, rural infrastructure and industrial corridors.

The sensitive provisions relating to compensation, relief and rehabilitation have been left untouched. The amendment also includes 13 legislation that are currently exempted under the purview of the Act in the compensation, rehabilitation and resettlement provisions.

The Indian Express had reported last week that the rural development ministry had been directed to get the draft ordinance vetted by the law ministry so that it could be cleared by the Cabinet this week.

Announcing the decision, Finance Minister Arun Jaitley said, “In a nutshell, we have tried to achieve a balance… higher compensation will continue… procedural rigours would be loosened or eased in relation to the five defined purposes.”

When the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, was brought in last year by the previous UPA government, it was touted as a landmark legislation. But the Act has been criticised by the industry and certain other sections for making land acquisition more complicated and tedious.

The NDA government has amended Section 10(A) of the Act to expand the list of projects that would not require SIA and prior consent of affected families. These include projects for defence and defence production, rural infrastructure including rural electrification, affordable housing and housing for the poor, industrial corridors as well as infrastructure and social infrastructure projects including public private partnership projects wherein the ownership continues to vest with the government.

No other changes have been made to the consent and SIA requirements, except in the case of these five categories. Under the Act, prior consent is required from 70 per cent of the affected families if land is being acquired for PPP projects and from 80 per cent in case of private companies. SIA is mandatory and has to be completed within six months.

“… It has been reported that many difficulties are being faced in its implementation. In order to remove them, certain amendments have been made in the Act to further strengthen the provisions to protect the interests of the ‘affected families’.

In addition, procedural difficulties in the acquisition of lands required for important national projects required to be mitigated…..Proposed amendments meet the twin objectives of farmer welfare, along with expeditiously meeting the strategic and developmental needs of the country,” said a government release.

It also claimed that certain provisions prolong the procedure for land acquisition, and “neither the farmer is able to get benefit nor is the project completed in time for the benefit of society at large.”

The changes will come into effect from January 1, 2015.

Explaining the urgency to bring in an ordinance, Jaitley said the government had to amend the Act before the end of the year since Section 105 of the Act, which provides for excluding 13 central legislation, would otherwise have to be notified by December 31. The 13 legislation included Land Acquisition (Mines) Act 1885, Atomic Energy Act, 1962, Railway Act 1989, National Highways Act 1956 and Metro Railways (Construction of Works) Act, 1978.

Jaitley said the higher compensation and R&R package would apply to the 13 exempted legislation as well. “With regard to the process of land acquisition, the priority of the government was that the interest of farmer whose land is to be acquired is paramount,” Jaitley said.

Currently, the Act also contains an urgency clause — related to natural disasters and wars — where the acquisition of land is exempted from the stringent requirements laid down in the legislation.

The NDA government began the process of easing the Act soon after it came to power in May this year. In July the ministry had sent a report to the PMO based on inputs received from states suggesting changes to the Act which would make it more industry-friendly, including doing away with the consent clause for PPP projects, removing the requirement for mandatory SIA study and relaxing the retrospective clause.

However, the BJP’s push to amend the Act has come despite its full support to the Bill in Parliament in 2013, after its suggestions were accepted. The Bill was brought to Parliament after the then UPA government held consultations with opposition parties and the BJP’s two key suggestions were accepted, following which the party extended its support.

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