Ordinance for Legal Acquisition Reforms will increase 'Political Risks'

Ordinance for Legal Acquisition Reforms will increase 'Political Risks' for Investors

The Government of India on Monday (29.12.2014) approved an ordinance to amend the Land Acquisition Act to remove barriers in a range of sectors like power, housing and defense to kick-start stalled projects.

At a news briefing, finance minister Arun Jaitley said the five areas were clearance for land for defense purposes, rural infrastructure, affordable housing and housing projects for poor, industrial corridors, and infrastructure or social infrastructure projects, including those in public-private projects in which ownership of land will remain with the government.

Mr. Jaitley said while the compensation will remain high as per the act, and rehabilitation and resettlement will be followed, the procedure for acquiring land for these projects will be easier by omitting steps like social impact assessment, impact on food security, and consent of 80 per cent land owners, among other features of the act

Why consensus is important for Investment?

Purpose of Parliamentary democracy is develop consensus on various issues and then make suitable laws or suitable amendments in the exist laws based on broad base consensus.

Ordinance should be used only in case of emergencies to meet situations which has emerged due to unforeseen situation and can create threat to nation security or public life.

The current trend to bring legal amendments is sending wrong signal to all the concerned citizens. When livelihood of people is at stake and laws are amended through ordinances for the benefit of investments or industrial houses will lead to wrong trends.

Now, in this situation, what is the difference between India and China?  Please read how dictators in middle east and Africa make rules?

I understand ruling establishments may be keen to show the investments on ground in hurry, but is this the only way?

If government has all convincing arguments and all state governments are on broad, why special session of Parliament is not called to discuss all these urgent bills? Is this necessary to have holidays when national interest is at stake?

The argument will be opposition will not support the bills. It is true and understandable. It means opposition feels public opinion is not favor government move. In that case why political leaders of ruling combination can't organize rallies and go for massive debate son TV channels to educate the citizens of India about the merits of the amendments.

This will bring all views in public forums and public opinion will decide which way political parties have to behave.

In order to save time and going through Ordinance route will undermine the credibility of democratic political process of India.

Who will stop new government from bringing out ordinance to nullify any particular decision taken by this government through ordinance route?

Can current political leadership oppose the ordinance route in future?

Citizens believe that current ruling Government of India is pro-development but no one wants that it should be through undemocratic means. This will reduce the biggest strength to serious invest risk.

Even if intentions are good, but if process is wrong this reduces the legitimacy of the good work done. 

This will hurt India forever, because it will be easy for any future government to follow the bad precedence.

This will add to political risk for large investments. This will add uncertainties for future projects. Is this good for India and Indian democracy?

It will be interesting to see how many Foreign companies will line up for investment once ordinance is passes but before amendments to law is passed by the Parliament? 

My Suggestion:
1. Remove word "industrial corridor" from Sec. 10A(d) 
2. Remove proposed amendment in Section 87 from the ordinance. All litigation to any affected party.
3. Prepare database of land holding with all registered companies in India including subsidiaries and shell companies.
This will resolve all issues related to land in India.