Govt trying to radically alter 2013 Land Bill, says Jaitley

Amid protests over Land Acquisition Bill, Finance Minister Arun Jaitley has said that the Bharatiya Janata Party-led government is trying to ‘radically alter’ the 2013 Land Bill to ensure developmental activities especially in rural areas.

"That is a very challenging piece of legislation for any government to alter.

“Ostensibly the popular view is you don't allow any land to be acquired," he said while addressing students and faculty at Columbia University in New York on Monday.

"This is the difficulty of passing these laws immediately on the eve of election because you come out with a highly impractical idea which is very difficult for anybody to oppose on the eve of election and then you rush through with it," said Jaitley, who is here on a private visit.

He said every state government, irrespective of political party, is now saying that for it any form of developmental activity in a country which is still developing, has come to an end.

He said land is required for rural roads, irrigation, electrification, affordable housing for the poor and defence projects but under the current provisions of the law, land cannot be acquired until several conditions are satisfied.

"Entire activity in this area has stopped completely. (One) can't get land for any defence projects. 

“That is one of the most challenging things.

“How do you not dilute the compensation mechanism but some of the procedures with regard to national security, rural infrastructure, affordable housing will have to be relaxed.

“That is the challenge which we are currently facing and we will see how we go through with this challenge of Parliament," he said.

The minister acknowledged that ‘certainly land becomes a slow bill’ and to ensure that it is passed, the government will have to try ‘every political methodology’, including persuading the opposition and correcting public opinion.

"Let's not reach a situation where creation of infrastructure and industry become bad words.

“At the end of the day if nothing works, the numbers will. Under the Indian constitution mechanism, numbers are fairly on our side," he said, adding that the 2013 Land Bill is an area that the BJP-led government is trying to "radically alter".

Jaitley, who presented the BJP-led government's first full Budget on February 28, said the "big idea behind this budget is preparing a particular constraint."

The minister said he has mooted the idea that there needs to be an India where projects are started without taking innumerable prior approvals but by just going through a regulatory mechanism and following the guidelines.

"The broad approach for the weaker sections (is) a social security mechanism, for the middle classes a little more money in their pockets and all steps to be taken to ease business and make India more investment friendly.

"That is the broad approach which we have followed," he said.

Jaitley said he is "very conscious" of the challenges that India faces. "Till about a few months ago, there was a large amount of cynicism that existed about India," he said, adding that he wondered where the country was going wrong.

He said while he was "extremely impressed" whenever he met former Prime Minister Manmohan Singh, "but the ability to implement a large number of what he knew and what he believed in was somewhat lacking".

"For a large democracy like India, you must have a regular hardcore politician as its leader," he said.

Jaitley said the other area where India went wrong in the last few years was that instead of adding to and expanding the size of the economy and adding to its productivity, "we just concentrated on redistribution of what we already had".

"Thats is why we stagnated, our growth rates came down and for India if the growth rates come down to below five per cent then there is very little resource left to do anything in the system because that is not the real potential as far as the Indian economy is concerned," he said.

Under such circumstances when the Bharatiya Janata Party government took over, the biggest challenge was that not merely had the international investors written India off but even the domestic industry and investors were completely disillusioned, he said.

Jaitley said he was persuaded to bring about some of the radical changes in the budget, like bringing down the rate of corporate tax in India, was that global and domestic investors told him that they don't trust the Indian tax system, they have to run to "40 offices" before they can start productivity and that India's taxation rate is not comparative to those of Hong Kong, Singapore and the ASEAN nations.

"These are the areas we have gone seriously wrong," he said, adding that is why it was not difficult for the new government to take the initial few steps.

"The first obvious steps were to decide to open out in areas where we were still a closed economy.

"So we decided to open out in terms of our insurance, defence, real estate, medical devices and railway infrastructure.

"Today there is very little left in terms of opening up. So theoretically, the policy is almost as wide as it can be," he said, adding that opening up the sectors were not very difficult decisions.