Opinion – The Controversial Land Ordinance

Recently the government of India had decided to pass an amendment to the ‘Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act’ (LARR Act) through the ordinance route.

A quick summary of the changes proposed in the ordinance:

  • The 13 Central laws which have been exempted earlier are brought under the act, as a result land acquisitions under these laws must also pay the fair compensation as per the act.
  • Addition of a new Section 10A : Special category of projects has been created for – Defence, Industrial Corridors, Housing, Rural Infrastructure and Social Infrastructure, for which the provisions involving the consent (of 70-80% of project affected people), acquisition of agricultural land and social impact assessment have been diluted.
  • Expansion of the definition of “public purpose” which includes the privately run hospitals and hotels.

First, what prompted the state to initiate the amendments to the mere 1 year old act? The concern of the industry that the act is slowing down the process of land acquisition is genuine, at least from the industry point of view and thus it needs to be addressed. The government claims that the ordinance will address these concerns and improve the ‘Ease of Doing Business With’ ranking of India. On the other hand, the concerns of the farmers and other land dependent people are also genuine which is why the LARR Act contains several provisions like consent and social impact assessment. So the challenge here is to strike a balance between these two, which seem to be contradicting with each other. The question is how to strike this balance.

LARR Act has been made after due consultations with various political parties, civil societies and all the other stakeholders. Now to bring in changes to such an act through the path of ordinance by attempting to overcome such consultations doesn’t sound appropriate. Ordinance path is not a desired path in a democracy and that too on such important legislation. The changes made by the government through the ordinance may be legitimate, but they must come through the same level of consultation process, which was made during the formulation of the act. In the worst case, they must come after due deliberations in the Parliament, where it will be subjected to the Parliamentary scrutiny before bringing in the changes. Otherwise, the amendments made in such haste might have several serious ramifications later.

If we were to take a look at the benefits that the industry would gain from this ordinance, we will find an interesting observation. Though the industry welcomes this move, it doesn’t place adequate confidence as it is not sure if the ordinance would survive the Parliamentary approval within 6 weeks after the session begins. As the result, the status quo prevails leaving no added benefits to the ‘ordinance’ path. So it is better that the ordinance be withdrawn and the issue be taken up in the Parliament, and any changes coming out will at least enjoy the confidence of the public and the industry.

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