The stringent land acquisition rules are probably blocking investments and key projects, the Mid-Year Economic Analysis 2014-15 tabled in Parliament indicated on Friday, suggesting changes to the existing law.
The finance ministry has discussed the matter in its recently instituted consultative process — “North Block Policy Charcha.”
According to consultations during the charcha between finance ministry officials and external experts, the government should be given the power to compulsorily acquire land for economic development.
The Right to Fair Compensation and Transparency in Land Acquisition, Resettlement and Rehabilitation Act 2013 can be improved to reduce obstacles to investment, while protecting the most vulnerable, the report said.
The new Act must avoid litigation, facilitate additional compensation above the market value and speedier environmental clearances, which would allow expeditious transfer of land.
The report also said that since the matter comes under the concurrent list, the Centre should not hesitate to give freedom to the states to modify the Act.
“In Indian conditions, land titles are often disputed and a private purchaser gets no better title than the seller, and this discourages market transactions…when land is acquired by government, the title defects are automatically cured by statute and the allottee gets clean title,” the report said, adding “Thus provisions for compulsory acquisition are essential for economic development.”