India land bill gets new name but no consensus

New legislation aimed at updating Indian land acquisition laws from the existing colonial-era rules adopted in 1894 has been kicked into the long grass.

India’s Congress-led ruling coalition had hoped to pass the new regulations in the current Parliamentary session. Many companies, too, had been hoping for speedy passage of new rules to help overcome what is seen as one of the biggest obstacles to the infrastructure and industrial development: conflicts over land.

The legislation crafted by Jairam Ramesh, the rural development minister, had sought to balance the pressing need for infrastructure and land for industry with the interests of farmers and other rural dwellers, who were being asked to sacrifice their land.

The idea was that villagers giving up land for infrastructure and industry should be assured a better future rather than becoming victims of development.

The draft legislation would have required private sector companies to pay four times the market value for rural land and provide comprehensive resettlement packages to all those affected. It would also require companies to obtain the consent of 80 per cent of those who would give up their land before the government would step in to override any local holdouts.

As it stood, the draft did not please anyone entirely: business groups complained it would raise the raise the cost of land and resettlement from around 3 to 4 per cent of the total project cost to 7 to 9 per cent, though Vinayak Chatterjee, the founder of Feedback Infrastructure and an expert on the legislation, said he believed companies should be able to bear the extra cost without too much difficulty.

Social activists objected to the idea of any forcible land acquisition from anyone at all, even if most of those in a community were willing to sell.

The opposition from both sides suggested the government may have actually managed a bill that achieved a reasonable and fair balance in a seemingly intractable debate.

But now the new legislation has been referred to a committee of ministers, as several in the cabinet expressed concerns that the bill was too unfriendly to industry.

While putting the crucial legislation on hold, they did agree one thing: to rename the proposed bill from the simple ‘land acquisition act’ to ‘the right to fair compensation, resettlement, rehabilitation and transparency in land acquisition.’ There’s progress.

Meanwhile, the search for balance continues, while industrialists looking for land will be forced to wait.

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