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land bill : Delay unlikely to impact overaoverall Indian economy

With the Congress opposing any change in retrospective clause of the Land Act brought in by the UPA in 2013, the Joint Parliamentary Committee examining the proposed amendments in the Act will now be able to submit its report only in the Winter session of Parliament. While this gives a moral victory to the Congress and other Opposition parties, economists say that the delay is unlikely to have much impact on the overall economic situation.
Madan Sabnavis, chief economist, CARE Ratings, said that while the Bill per se will not have any effect on the economy, which was growing even in the absence of Land Act 2013, it “will certainly help in improving the sentiments for investments in the country”.
“If the Land Bill is delayed and status quo maintained, there will be no adverse effect. However, if the Bill is passed it will certainly give an impetus to the overall economy,” he said adding that with the private sector operating at a capacity of 70-80 per cent, there is no urgency in the land acquisition.
“The real estate sector has been witnessing land acquisition with the buyers paying at market prices, so I don’t think the sector will be hit due to this. However, sectors like mining may be impacted,” he added.
According to sources, NDA’s version of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Second Amendment) Bill, 2015, will be closer to what the UPA enacted in 2013. The JPC is expected to roll back six amendments proposed in the Bill while restoring consent clause and social impact assessment provision. Industry says it will not face any adverse impact if the earlier provisions are restored.
“Consent is obviously needed if you acquire their (farmers’) land. Economy will not be adversely impacted by the delay in passage of amendments though it will accelerate if the Bill is passed,” Venugopal Dhoot, chairman, Videocon Industries Ltd, told The Indian Express. Currently land acquisition is governed by the 2013 Act which came into effect on January 1, 2014. Before this Act, the land acquisition was governed by 1894 legislation. The UPA had introduced changes including narrowing the definition of public purpose, requirement of consent of land owners for PPP projects or projects of private company, higher compensation at 2-4 times of the prevailing market rates along with a social impact assessment mandatory to determine whether the potential benefits of the project would outweigh the social costs.
However, with the industry criticising the Bill, the NDA government promulgated an Ordinance in December 2014 amending the 2013 Act and diluting it in the process. Further, failing to garner consent on the amendments, the Ordinance was re-promulgated in April and May 2015. The amended Bill was introduced in the Lok Sabha on May 11 to replace the Ordinance further to which it was referred to the JPC for vetting following the Opposition’s demand

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