[aaykarbhavan] source Business Standard

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Govt approves ordinance to ease land acquisition

BS REPORTER New Delhi, 29 December With many infrastructure projects stuck for want of various clearances, the Union Cabinet on Monday paved the way for easing the land acquisition Act for public- private- partnership (PPP) and rural infrastructure projects. It approved an ordinance to make amendments to the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, put in place by the United Progressive Alliance government. The ordinance does away with the requirement of written consent from 70 per cent of landowners for PPP projects in the infrastructure and social infrastructure sectors. Also, social impact assessment won't be required for such projects. PPP projects account for 60 per cent of the ₹ 18 lakh crore worth of stalled projects. In terms of social impact assessment and consent of landowners, exemption has also been granted for projects pertaining to national security, as well as for affordable housing projectsandindustrialcorridors. However, no change has been made in the clause relating to compensation for the land acquired. An official statement issued after the Cabinet meeting said due the prolonged process of land acquisition, neither did farmers benefit nor were projects completed on time. Prime Minister Narendra Modi tweeted the changes would hasten processing, without compromising on compensation and relief and rehabilitation measures for farmers. "Through this ordinance, we have tried to achieve a balance —farmers or others continue to get the higher compensation envisaged in the original Act, while procedures are relaxed for five purposes to meet the developmental needs of the country," Finance Minister Arun Jaitley said after a Cabinet meeting. In the past few weeks, this is the third major reform initiated by the government through the ordinance route. Earlier, it had promulgated ordinances on raising the cap on foreign equity in private insurers, as well as on e- auction of coal blocks. The retrospective clause, which stipulates land- acquisition proceedings will lapse in case compensation is not paid or physical possession is not taken within a mandatory timeframe of five years, has also been relaxed. According to the amendment, the clause will now be applicable after 10 years. "Some procedural changes have also been made in the definition of land acquired by 'companies'; it has been widened to include ' entities'," said a senior official. Turn to Page 16 > |Consent clause, social impact assessment and livelihood requirement to be abolished for PPP projects, affordable housing, industrial corridors, rural infrastructure and defence installations |Modification in retrospective clause, which stipulates annulment of acquisition if compensation isn't paid or possession isn't taken |No clarity on change in definition of 'affected families' |Compensation requirements to be applicable for the remaining 12 central Acts, which the land law seeks to subsume public transport in Delhi could impede growth Amendment to do away with requirement of social impact assessment, consent of 70% landowners for PPP projects in infrastructure

 

Cabinet nod to ordinance tweakingarbitrationlaw  New Delhi, 29 December The Cabinet on Monday approved an ordinance to amend various provisions in the law on arbitration. One is to make India the preferred venue of arbitration. Many foreign companies in a dispute with the government —an example is of Vodafone —have preferred to go outside India for arbitration. The ordinance will amend the Arbitration & Conciliation Act, 1996, to ensure speedy disposal of cases, official sources said. It provides for an arbitrator charging composite fees for disposal of cases and not on the basis of each sitting or each hearing, as is the practice. The ordinance also provides for the arbitration tribunal making its award within nine months. Earlier in the day, Finance Minister Arun Jaitley had wondered why investors repeatedly opted for arbitration outside India. " Is it because our domestic systems have a tendency to interfere too much even in the domestic tribunals which are created for the purpose of dispute resolution?" he asked. AAI proposal to give land to Navy, coast guard approved The Cabinet approved the Airports Authority of India ( AAI)' s proposal to lease some of its land spread over four airports, including the one at Porbandar in Gujarat, to the Navy and the coast guard for various projects. The Cabinet has given its approval to lease 4.62 acres of AAI land to the Navy and 7,326 sqm of land to the coast guard at the Porbandar airport. It also approved the lease of 6,200 sqm of AAI land at the Juhu airport to the coast guard for two hangars with apron and a link taxi track. The government also granted its approval to lease five acres of AAI land at the Visakhapatnam airport to the coast guard, the release said, adding 0.9 acres of its land has also been allowed to be leased to the coast guard to construct taxi track at Tuticorin Airport.     Insuranceordinancesilent onexit clause for promoters ARUP ROYCHOUDHURY New Delhi, 29 December The Insurance Laws ( Amendment) Ordinance, 2014, promulgated last week, raised the foreign investment limit in the sector to 49 per cent from 26 per cent. However, it is silent on how will the limit can be raised — through equity dilution by promoters or raising of fresh equity. Business Standard has learnt from sources that such an exit clause for the promoters will be in the regulatory rules being formulated by the government. The clause is likely to provide these options for Indian promoters. Officials said there was no timeline on when the new rules would be out. The rules might allow a companys board of directors to take this decision, subject to some conditions, officials said. Dissent notes to Parliament's select committee on the issue had apprehended that promoters would dilute their equity, instead of raising fresh capital. The panel's recommendations are the basis for the ordinance. The government took the ordinance route after the Opposition repeatedly stalled proceedings in the Rajya Sabha in the just- concluded session. The ordinance says the new 49 per cent limit applies to the aggregate holdings of equity shares by foreign investors, including portfolio investors, of the paid- up equity capital. It has to be Indian- owned and controlled. Finance Minister Arun Jaitley expressed hope recently that raising of the limit to 49 per cent, a measure pending since 2008, would result in capital inflow of $ 6- 8 billion.

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