Land ordinance: A bold step forward

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Bikky Khosla | 06 Jan, 2015
The Modi government has tweaked the land acquisition norms. The Land Acquisition Act 2013 came into force last year, replacing an archaic law enacted in 1894. The earlier UPA government that had put the new Act in place termed it as progressive and farmer-friendly, but for many the Act swung the pendulum far the other way. Since then, the industry and most of the states have been lobbying for easing of some of the restrictive provisions of the Act. The latest move by the Centre, although somewhat falls short of expectations, sounds encouraging.

One of the major irritants in the Act was the provision that said that unused land must be returned after five years after the acquisition. The ordinance amending the Act extends this period to "a period specified for setting up of any project, or five years, whichever is later". This is a welcome move as a five-year period is too short for several types of projects to kick off. Similarly, I support the inclusion of a new section that has made five exceptions to the consent clause, including industrial corridors, defence, rural infrastructure, and infrastructure & social infrastructure projects, including those under PPP mode. This section removes one big bottleneck for such crucial projects.

I think the government is on the right track. In the past, it has initiated a number of reform measures -- most remarkably initiation of labour reforms, simplification of environmental regulations, further opening up of different sectors like defence, railways, insurance and construction, etc. -- but still a lot has to be done to achieve the goal of a brighter economic future for the country. So, the reforms must continue. It is unfortunate that some people try to project such efforts as a conflict between the farmers and the industrialists, but the government must think strategically and bite the bullet when necessary.

Meanwhile, there were two other important developments last week: first, it has been reported that the government may ask the public sector banks to form a holding company for itself and its subsidiaries, as the first step towards giving the banks financial autonomy. I think the best way to free the banks from the influence of politicians and bureaucrats is by bringing the government's ownership in them below 51 percent. Second, it has been confirmed that the existing FTP shall now continue till the end of the current financial year. It is a relief that the uncertainty is over now. Exporters would now be able to plan confidently for future export orders.

I invite your valuable opinions.