JLL’s Anuj Puri analyses Land, Bill passage in LS

The following is an analysis of the Land Acquisition Bill passed by Government in Lok Sabha by Anuj Puri, Chairman & Country Head, JLL India

The Central Government managed to get the amended Land Acquisition Bill passed in Lok Sabha on Tuesday. The ruling dispensation enjoys brute majority in the Lok Sabha and hence had no problem getting the Bill passed through it. This Bill is an amended version of the original Bill introduced and passed in 2013 by the previous Government.

Due to a long-standing demand from industry to relax some provisions which made land acquisition difficult, expensive and time-consuming and thus harming industrial growth, the ruling party brought in some changes by the means of an ordinance. Normally, any ordinance has to be brought to the parliament within six months of it being issued to be passed again by the Parliament to make it a law.

The new Bill introduced and passed in the Lok Sabha had nine additional amendments or concessions, plus two additional clauses made by the government to appease its allies and the opposition to some extent to gain some consensus before introducing it in the Rajya Sabha. The amendments made are:

•Limiting the industrial corridor to 1 km on both sides of highways and railway lines. This is limited to industrial corridors being set up by the government only.
•Employment for at least one member of farm labour families which are affected due to displacement and land acquisition
•Removal of exemption from consent clause extended earlier to five sectors has been taken away from social infrastructure projects under PPP model. SIA will be conducted for such projects also.
•Acquisition to be of bare minimum land
•Survey to be undertaken of wastelands
•Hassle-free grievance redressal to be undertaken at district level and creation of a quasi-judicial authority
•Social Impact Assessment has been made a prerogative for the state Governments
•States can create land banks of vacant land for development projects

The changes above are in addition to the earlier amendments moved through an ordinance where the Government had added five sectors (defence, rural infra, affordable housing, industrial corridors, infra and social infra projects including PPP) to a list that would not require owners’ consent while acquiring land as well as exempted them from submitting a social impact assessment (SIA) and removal of restriction on acquisition of multi-crop lands for these sectors. The last social infra projects including PP have been removed from the exemption list.

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The changes above have managed to appease the allies to some extent, but questions remain whether the opposition is willing to relent as most of them walked out during the vote in the Lok Sabha. In the Rajya Sabha however it is a different story as the ruling NDA does not enjoy a majority there and where the amended Bill is likely to be defeated by an united opposition. The earlier changes or removal of consent clause has been termed anti-farmer, though they are definitely industry-friendly, while removal of SIA will save costs and time both. The main point is that the process should be fair to both farmers as well as the industry.

The Government has the option to either pass the Bill in a joint sitting of the two houses where it will have the requisite numbers to get it passed in case it gets rejected in the Rajya Sabha or it will have to re-promulgate the ordinance again to give itself breathing space. There is also the option of setting up a parliamentary panel and referring the Bill to it, though it is likely to delay passage of the Bill by a further six to eight month period.