India’s federal government is likely to promulgate an executive order for an unprecedented fourth time after the bill meant to smooth land purchases has stalled in Indian parliament.
The Narendra Modi government in Delhi, in a bid to avoid political conflict, is likely to promulgate the land ordinance after conclusion of the Indian Parliament’s monsoon session.
The government has overhauled an earlier law passed in 2013.
A joint body of Indian lawmakers headed by a member of the ruling Bharatiya Janata Party (BJP), S S Ahluwalia, is unlikely to submit its recommendations on the bill before the end of the monsoon session of the Parliament.
The monsoon session starts on July 21 and ends on August 3.
This would make it necessary for the government to re-promulgate the ordinance once again, in order to reassure industry bodies of its reformist intent.
The executive order was promulgated for the third time on May 31.
“While ordinances can be reissued once they lapse, they may not be perceived as a stable solution by investors wanting secure property rights,” HSBC Securities analysts wrote in a note last year.
An executive order has a life span of six months otherwise, has to be re-promulgated if it does not get the endorsement of Parliament within six weeks of the start of a session.
A law brought in by the previous government had placed restrictions on buying land, and strived to provide fair compensation to landowners and outlined measures to rehabilitate those affected by land sales.
The law, “Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Law 2013” passed by the Indian Parliament gave landowners the right to greater compensation but potentially raised costs for businesses and government.
The decision by the Modi government to overhaul the earlier law would also remove a requirement to get 80 per cent of the landholders’ consent in the case of projects in defence, rural electrification, rural housing and industrial corridors.
As the second largest growing economy in the world expands there have been increasing concerns for a rural populace that are being forced to sell their land for industrial and commercial use.
The 2013 legislation had ensured that buyers pay four times the market value for land earmarked for infrastructure projects in rural areas.
Earlier in July 2013, global steel major POSCO had to pull out of a $5.3 billion steel mill project in India.
Land acquisition is a contentious issue in India, where small holdings by families with no source of income other than farming are common.
An ordinance is an emergency measure that has to be passed by the next parliamentary session.
Modi has already resorted to using it three times in his one year in office due to a lack of majority in the upper house of parliament.
“Either the Centre must build a coalition and pass the land bill quickly, or give the flexibility to the states to pass their own laws,” said Indian Finance Minister Arun Jaitley earlier this week, after nearly half of 31 chief ministers of Indian provinces boycotted the Prime Minister’s meeting to discuss the contentious legislation.
Jaitley, a key lieutenant to Modi, was responding to opposition parties’ criticism that such ordinances undermine the parliamentary system in a democracy.
TBP and Agencies