Indian corporates are plagued by many problems at the moment. While they blamed the UPA government of policy paralysis many of the wounds were self inflicted. After the change in government, corporate India had high hopes. However, things have not proceeded in the way that they wanted. While showing the right intent, the government has been slow to push for decisive reforms. One of the most important issues that corporate India has raised is the Land Acquisition Bill.
This bill was passed in 2013 and was roundly denounced by corporate India. However, if the new Finance Minister is to be believed, some changes to the bill could be on the cards. As per him, even Congress state governments are opposed to the highly restrictive nature of this bill and have petitioned for changes. While the new law did add to the cost of land acquisition and it added an extra level of bureaucracy to the whole process (in terms of rehabilitating project affected people); it did have some positive aspects as well. For one thing, it brought about much needed clarity to the process. Secondly, it provided for sufficient remuneration for land holders and finally it made the process time-bound. However, India Inc was not happy and made no secret about it.
Now they might get a bit of a reprieve from the Modi government. What is interesting to note is that the FM has not stated what the changes might be or when the amendments will be brought in. The next Parliament session is three months away and the government clearly does not want to reveal its cards on this issue right now. The land acquisition bill quite literally stalled the process of land acquisition last year because corporates wanted to see what changes the new government might bring to the law. We will know the government's decision only when the amendments are cleared by the Union Cabinet. Until then large infra projects and manufacturing plants may remain stuck in bureaucratic red tape.
Do you think the government should make decisive changes to the Land Acquisition Bill? Do share your views on the Equitymaster Club.