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Economic interests and land rights. The recent ordinance to amend the central land
acquisition law excludes (1) the requirement of a social impact study for land acquisition
by any government or government entity and (2) a special provision that barred
acquisition of irrigated, multi-cropped land (except in certain cases), for certain types of
projects. However, other key provisions have been left unchanged. The new law
possibly makes the timeline to acquire land shorter, thereby making the process efficient.
�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��
��
One of the many ordinances promulgated recently
The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and
Resettlement Act was amended by an ordinance promulgated by the President on December
31, 2014. This ordinance is a part of a series of ordinances (see Exhibit 1) that the government
has promulgated just after the close of the winter session of the parliament with the stated
intention of making it easier to do business in India.
The key change is to make certain provisions inapplicable
The act details a process of doing a social impact assessment (SIA) and identifying the public
purpose in cases where any land is to be acquired by any government. This activity could take
around two to three years (see Exhibit 2) and has been ‘blamed’ for making the process of land
acquisition longer. The ordinance now makes these provisions inapplicable in a few cases,
which we discuss below. The ordinance also requires that any action against a government
official for contravention of this Act will require a previous sanction of the relevant government;
the earlier version deemed the officer guilty until he was proved otherwise.
The purposes for which land acquisition could become easier are not many
The purposes for which land acquisition could become quicker are (1) projects vital to national
security or defense, (2) rural infrastructure, including electrification, (3) affordable housing and
housing for the poor people, (4) industrial corridors and (5) infrastructure and social
infrastructure projects, including PPP projects where the ownership of the land continues to vest
with the government. Interestingly, the old Act had provisions to obviate SIA in cases of
urgency.
Many key provisions remain untouched
There were expectations that amendments to the Act would touch upon other provisions that
have been deemed to make land acquisition either difficult or costly. Such provisions include the
requirement of super-majority of consent, paying of a multiple of the market price for land and
relief from stringent rehabilitation norms. The ordinance does not amend any of these sections.
The urgency in passing laws by ordinance shows the ‘economic’ intent of the government
The promulgation of various ordinances by the government shows its intent to make the
process of doing business easier. However, we note that these ordinances will need to be
approved by the parliament eventually or they will lapse. It is possible that the government may
want to force a discussion on some of the issues in the parliament or even look at the option of
a joint session of the parliament in case one of the two houses (upper house where the
government is in a minority position) rejects a bill that will be introduced eventually in the
parliament to replace the ordinances. We would refer readers to our December 31, 2014 report
titled Rajya Sabha, legislations and ordinances for more details on India’s legislative processes.
LINK
http://www.kotaksecurities.com/pdf/indiadaily/indiadaily08012015ax.pdf
Economic interests and land rights. The recent ordinance to amend the central land
acquisition law excludes (1) the requirement of a social impact study for land acquisition
by any government or government entity and (2) a special provision that barred
acquisition of irrigated, multi-cropped land (except in certain cases), for certain types of
projects. However, other key provisions have been left unchanged. The new law
possibly makes the timeline to acquire land shorter, thereby making the process efficient.
�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��
��
One of the many ordinances promulgated recently
The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and
Resettlement Act was amended by an ordinance promulgated by the President on December
31, 2014. This ordinance is a part of a series of ordinances (see Exhibit 1) that the government
has promulgated just after the close of the winter session of the parliament with the stated
intention of making it easier to do business in India.
The key change is to make certain provisions inapplicable
The act details a process of doing a social impact assessment (SIA) and identifying the public
purpose in cases where any land is to be acquired by any government. This activity could take
around two to three years (see Exhibit 2) and has been ‘blamed’ for making the process of land
acquisition longer. The ordinance now makes these provisions inapplicable in a few cases,
which we discuss below. The ordinance also requires that any action against a government
official for contravention of this Act will require a previous sanction of the relevant government;
the earlier version deemed the officer guilty until he was proved otherwise.
The purposes for which land acquisition could become easier are not many
The purposes for which land acquisition could become quicker are (1) projects vital to national
security or defense, (2) rural infrastructure, including electrification, (3) affordable housing and
housing for the poor people, (4) industrial corridors and (5) infrastructure and social
infrastructure projects, including PPP projects where the ownership of the land continues to vest
with the government. Interestingly, the old Act had provisions to obviate SIA in cases of
urgency.
Many key provisions remain untouched
There were expectations that amendments to the Act would touch upon other provisions that
have been deemed to make land acquisition either difficult or costly. Such provisions include the
requirement of super-majority of consent, paying of a multiple of the market price for land and
relief from stringent rehabilitation norms. The ordinance does not amend any of these sections.
The urgency in passing laws by ordinance shows the ‘economic’ intent of the government
The promulgation of various ordinances by the government shows its intent to make the
process of doing business easier. However, we note that these ordinances will need to be
approved by the parliament eventually or they will lapse. It is possible that the government may
want to force a discussion on some of the issues in the parliament or even look at the option of
a joint session of the parliament in case one of the two houses (upper house where the
government is in a minority position) rejects a bill that will be introduced eventually in the
parliament to replace the ordinances. We would refer readers to our December 31, 2014 report
titled Rajya Sabha, legislations and ordinances for more details on India’s legislative processes.
LINK
http://www.kotaksecurities.com/pdf/indiadaily/indiadaily08012015ax.pdf
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