Why NDA's land law changes may need a joint session of parliament

The NDA government, stuck with the growth-retarding legacy of the Sonia-Rahul Gandhi Land Acquisition Act, is said to be working on a gameplan to rework and rewrite the worst aspects of the law.

According to this Financial Express report, the proposals for change include the “scrapping of the consent clause for public-private-partnership (PPP) projects to narrowing the definition of ‘affected families’ eligible for rehabilitation and resettlement,” among other things.

Grandiosely named the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Ac t, 2013, the act was one of the UPA government’s last-ditch attempts to buy the rural vote, and the BJP made things worse by refusing to block it for fear of losing votes ahead of a general election. It is now Rural Development Minister Nitin Gadkari’s job to rescue the law and make it somewhat palatable to business. Given the big investments planned in the PPP mode, changing the law is vital to reviving growth and investments on a large scale.

It is unlikely to happen before the state assembly elections to Maharashtra, Haryana and Delhi are over, since the Congress is bound to oppose it tooth and nail in the Rajya Sabha. If the Congress is prepared to create a god-awful fuss about amending the Trai Act to allow someone to be appointed Principal Secretary to Narendra Modi, it is sure to raise hell over efforts to change its precious, dynasty-backed land law. In fact, changing this law could well need a joint session of parliament to overcome the NDA’s Rajya Sabha seat deficit.

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The best thing to do would be to scrap the Act and start reworking the clauses in the 1894 Act that need change. While it is always tempting to write a new law, the fact is much of case law and legal precedents have been set under the old law. Creating an absolutely new law means the whole judicial history of the old law is gone, wiped clean - and completely new decisions will have to be taken by the courts and quasi-judicial authorities with the new, untested law.

If scrapping is not possible, the second best-thing to do is to amend the worst aspects of the law, as now being proposed by Gadkari’s ministry, and also insert a single enabling clause to specifiy that any state which wants to make amendments to the central law will automatically be allowed to do so and their law will be given precedence in that state - as allowed under article 254(2) of the Constitution.

The third-best thing is to do what Gadkari is proposing - and change only some aspects of the UPA law. The Financial Express report lists the following among the key changes proposed: removal of the “consent clause” which requires 70 percent of those whose land is being taken over to agree to it; restricting the mandatory Social Impact Assessment to only large projects; redefining the ambit of “affected families” to include only some people; modifying a clause that says the land acquisition would lapse if there is delay in paying compensation or taking possession of it.

While all this is fine, the biggest drawback in the Gadkari proposals is that the clauses specifying the rate of compensation to be paid - two times the market rate for land close to urban areas, and four times elsewhere - is being retained. This is not sensible for it is this clause that interferes completely with market mechanisms in land pricing. Fixing any price always leads to corruption and funny deals. The UPA Land Act is tailor-made for corruption.

Apart from corruption, the main problem with the UPA law is pure politics - and that is why it may be difficult to make big beneficial changes easily. At a revenue ministers’ conference that Gadkari presided over before the budget, many Congress-ruled states - Maharashtra, Haryana, Karnataka, Kerala, Meghalaya, Uttarakhand and Himachal Pradesh - and all non-Congress, non-BJP states (excluding West Bengal) “expressed serious reservations against the law,” said a Times of India report at that time. The BJP-ruled states of Gujarat, Chhattisgarh, Goa and Rajasthan wanted the Act scrapped.

But it is one thing for Congress-ruled states to tell Gadkari that they don’t like the law, quite another for Congress MPs in parliament to get around to supporting it. As we noted before , “the reality of Indian politics has never been more exposed than with this law. It shows that no one will oppose bad laws during election time for fear of losing votes. When the law was passed in the dying days of the UPA, the BJP’s only intervention was to make it worse, by inserting poison pills in it. In effect, a law intended only to benefit the ruling dynasty politically was legislated without considering its consequences for national interest.” So it is a moot point if Congress MPs in parliament will back the changes even if their state-level CMs are keen on them.

The BJP has to be prepared for a big political fight over efforts to change the Land Acquisition Act. This is one law that may require a lot of backstage negotiations with other opposition parties, and the convening of a joint session of parlilament to get it done.

It is unlikely to happen till the assembly elections are over in November-December.