Decoded: What changes has the Narendra Modi government made in the Land Acquisition ordinance

The government has decided to introduce an ordinance to make major changes in the existing Land Acquisition, Rehabilitation and Resettlement Act 2013. It is in many ways aimed to be a course correction after the Act passed by UPA was deemed as restrictive by industry bodies. But it has also increased apprehension that the poorest of the poor, who often cultivate lands but are not the owner, may be left high and dry with no compensation.Government's ordinance has attracted major criticism from the oppositon and Anna Hazare is currently holding a protest in Jantar Mantar against it. 

Here's what has changed and what has been kept unchanged: 

Removal of consent clause and Social Impact Assessment

The government has amended Section 10(A) of the Act to expand sectors where assessment and consent will not be required. For five sectors, the consent clause has been removed. So the government or private individuals/companies will no longer need mandatory 80% consent for land acquisition in those five sectors. According to Arun Jaitley, the mandatory "consent" clause and Social Impact Assessment (SIA) will not be applicable if the land is acquired for national security, defence, rural infrastructure including electrification, industrial corridors and housing for the poor including PPP where ownership of land continues to be vested with the government.

Jaitley said that rehabilitation and resettlement packages will be available as per the new Land Acquisition act. What Jaitley didn't mention was that by omitting the social assessment part, the government in essence has got away with a very important hurdle. In the earlier law, the assessment was meant to find out how many people will be impacted. So apart from the land owner, all those who are dependent on the land also needed to be compensated. But the new ordinance ensures that only land owners will be compensated.

Also whether the land is fertile or not will also not be taken into consideration while acquiring it for these five specific sectors. Thus even if the land is extremely fertile like it was the case in Singur, it can be acquired if it fits the criterion of these five sectors, no question asked. 

'Pro-farmer step'

The government has balanced out the ordinance by including 13 so far excluded Acts under the Land Acquisition Act. It is hailed as a pro-farmer move as with this decision, rehabilitation, resettlement and compensation provisions will be applicable for the 13 existing central pieces of legislation. Till now land could be acquired under these Acts and there was no uniform central policy of rehabilitation and resettlement. 

These Acts include the Coal Bearing Areas Acquisition and Development Act 1957, the National Highways Act 1956, Land Acquisition (Mines) Act 1885,  Atomic Energy Act 1962, the Indian Tramways Act 1886, the Railways Act 1989, the Ancient Monuments and Archaeological Sites and Remains Act 1958, the Petroleum and Minerals Pipelines (Acquisition of Right of User in Land) Act 1962 and the Damodar Valley Corporation Act 1948. The Electricity Act 2003, Requisitioning and Acquisition of Immovable Property Act 1952, the Resettlement of Displaced Persons (Land Acquisition) Act 1948 and the Metro Railways (Construction of Works) Act 1978 are also brought under its purview to provide higher compensation, rehabilitation and resettlement benefits to farmers whose land is being acquired.

Compensation remains the same

The compensation package remains the same. It is four times the market price for rural and and two times for urban land. The government despite pressure from various groups has decided to keep the package intact.

Mint quotes former NAC member NC Saxena who welcomes the changes made to the land acquisition act as he felt Jairam Ramesh's bill was both anti-industry and anti-farmer. 

The erstwhile bill may have had its heart in the right place, but was too rigorous, making it difficult both for industrialists and farmers. In a way, the new ordinance tries to address this problem.  

Why did the government passed the ordinance now?

The official reason given by Finance Minister Arun Jaitley is that under Section 105 of the Land Acquisition Act, a clarity was needed on what provisions apply to the aforesaid 13 legislations and it had to be done before January 1, 2015.

The political reason is that the government is looking to give a message to investors that they're trying their best to free up procedural bottlenecks which are almost a hallmark of any infrastructure investment in India. The government is looking to boost up manufacturing to make Modi's ambitious Make in India project a reality and this is a big bold step towards it. 

Congress's opposition

Congress has strongly opposed the ordinance saying anybody who is pro-farmer should raise their voice against it. But according to an Indian Express report, Haryana and Kerala wanted to remove the consent clause for PPP or bring it upto 50%. States like Assam, Haryana and Himachal Pradesh felt that the definition of affected family is too broad. 

On social impact assessment, Karnataka, Kerala, Maharashtra and Manipur all demanded that the process be restricted to only large projects. 

Other opposition parties like JD(U), Left and AAP have strongly expressed their reservation about the ordinance. So it will be an uphill task for government to pass it in Rajya Sabha where the government is in hopeless minority without Congress's help at least. 

Thus, in a way, the government went through a broad consensus by making the changes. Now it is to be seen if they can get it passed in the parliament eventually and if the revised ordinance will indeed serve the purpose of bringing fresh investment and boost the manufacturing sector without trampling on the rights of the poor. 

With Agency Inputs 

First published on December 30 2014