Arun Jaitley slams opposition parties for opposing amendments to the Land Act; says the amendments balance the developmental needs of rural India while still providing enhanced compensation to the land owners

In a post put up on his facebook page today, Union Finance Minister, Mr. Arun Jaitley, launching a staunch defence of his Government’s recent promulgation of an ordinance to effect amendments to the Land Act, has explained the necessity of amending the Right to Fair Compensation and Transparency in Land Acquisition, Resettlement and Rehabilitation (Amendment) Act, 2013 through the ordinance route, instead of routing it through Parliament. 

Acknowledging the reality that the 1894 Act had become obsolete and needed amendments, and stating that the 2013 Act provided for higher compensation coupled with a rehabilitation and resettlement package, Mr. Jaitley said that he supported the 2013 Act on that ground. 

File Picture: Arun Jaitley

Explaining the reason for promulgating the ordinance, he said that Section 105 of the 2013 Act empowered the Government to issue a notification directing ‘any’ provision of the Act relating to compensation or R&R to be made applicable to the exempted acts (13 in number) which were put in the Fourth Schedule of the Act, but that the “Proposed” notification had to be placed before Parliament for a period of 30 days and Parliament was expected to approve, disapprove or modify the said proposed notification .  He said that the necessity for an ordinance arose “because such a notification would have to be put before Parliament in the Budget session itself in July-August, 2014 and the approval or disapproval taken accordingly. 31st December, 2014 being the last day for such a notification, the Government decided to amend the Section 105 and apply all the compensation and R&R provisions of the 2013 Act to the thirteen exempted laws.” He said that if the Government had not issued such an ordinance, it “would have been in default of the complicated approval provisions outlined in the 2013 Act.”

Mr. Jaitley held out a word of assurance to the farmers of the country by stating that as a result of the amendments brought about, the present ordinance would ensure that they would get higher compensation if land is acquired under any of the exempted laws. “It goes a step further than the 2013 Act itself. he said.

Defending the amendments, Mr. Jaitley said, “When the 1894 law is amended in the 21st century, it must provide for a 21st century compensation and cater to the developmental needs of the 21st century. It cannot completely ignore the developmental needs of the society and mandate that India does not grow.”

He said that the amendment which carves out five exceptions for which the complicated process of acquisition would not apply, namely defence and security of India, rural infrastructure, affordable housing and housing for poor, Industrial corridors and infrastructure and social infrastructure projects,would benefit rural India. “They would enhance the value of land, create employment and provide rural areas with better infrastructure and social infrastructure. This is in addition to the enhanced compensation and R&R provisions being expanded to the thirteen exempted acts”, claimed Mr. Jaitley. 

He said that the amendment balances the developmental needs of India, particularly rural India, while still providing enhanced compensation to the land owners.

Mr. Jaitley also stated that the 2013 Act had over 50 drafting errors, which would be cured thanks to the provision with regard to the rectification of the said errors in the amendment brought about as a result of the ordinance.  “Some are being cured through this ordinance which alters the earlier mandate of the 2013 law that unused land has to be returned five years after the acquisition. The earlier provision was clearly defective. Creation of smart cities, townships, industrial corridors, business centers, defence projects, cantonments, ports, nuclear installations, building of highways, irrigation projects, dams have a long gestations period. They cannot be completed in five years. If the earlier provision is to be effected, we would be a nation of incomplete projects on account of defective legislative drafting", said Mr. Jaitley, elucidating his point about the 2013 Act having errors, with a specific example. 

Pointing out another instance of an error that had crept into the 2013 Act, Mr. Jaitley said: “The draft provisions of the 2013 Act enthusiastically provide that no part of an acquired land could be used for a private educational institution or a hospital. How will new smart cities and townships come up? Will they only have a civil hospital and a Government school/ college and no other healthcare and educational institutions will be allowed to be established there? The ordinance permits hospitals and educational institutions to be established on an acquired land. That is the purpose of acquisition for townships. A township without a social infrastructure would be inherently incomplete.”

Slamming the opposition parties for criticizing the Govt move to introduce the ordinance, Mr. Jaitley throwing down the gauntlet to them, asked,  “Will the State Governments ruled by political parties, which are opposed to this ordinance, publically declare that they will not use the law which provides for enhanced compensation in the case of exempted acts and acquisition process which balances the developmental needs of society, particularly those of poor, weaker sections, rural India alongwith defence requirements of the country?”

He said that the amendment ordinance is based on extensive consultations where State Government of most political parties supported these changes.  “Those who are opposed to it can certainly mandate their party’s State Governments not to use the provisions of the ordinance. History will judge how these States will lose out in the era of competitive federalism”, added Mr. Jaitley, while concluding his facebook post.  

Communist Party of India (Marxist) MP moves privilege notice against Arun Jaitley and Dharmendra Pradhan, ministers in the NDA Government

The Communist Party of India (Marxist) [CPM] on Friday moved a notice of privilege against Finance minister Arun Jaitley and Petroleum minister Dharmendra Pradhan for increasing the excise duty on petrol and diesel when a statutory motion against the earlier notification to hike the excise duty on petrol and diesel is pending with the Upper House, where the NDA Government is in a minority at present.

The notice of privilege has been moved by CPM MP K.N. Balagopal in the Rajya Sabha of which he is a member.

File Picture: TV grab of K.N. Balagopal speaking in the Rajya Sabha

“This increase was done arbitrarily at a time when the notice for statutory motion to disallow the earlier notification to increase excise duty of the petrol and diesel, is pending before the Rajya Sabha,” K.N Balagopal said in the notice sent to Rajya Sabha chairman Hamid Ansari, a day after the government raised excise duty on petrol and diesel by Rs. 2 per litre.

Balagopal alleged that both Jaitley and Pradhan took the decision “bypassing” the Parliament. He said the notice for amending the earlier notification was given by him and his party leader and Rajya Sabha MP Sitaram Yechury and it was accepted by the Chairman and is included in the list of business.

“The Business advisory committee has allotted time for the discussion. But due to the negative attitude of the government, the statutory motion was not discussed in the last session. Now it is pending before the House. Since such an important motion is pending before the house for discussion and finalisation, it is the responsibility of the government to respect the Parliamentary practices and procedures,” the notice said.

“They (Jaitley and Pradhan) negated the Parliamentary privileges and etiquettes. Hence I feel this as a grave case of breach of parliamentary privilege, which affected me the personally and the Rajya Sabha, in general,” Balagopal said, seeking necessary action to protect the privilege of members.

The third excise duty hike since November was done to help raise an additional amount of Rs. 6,000 crore during the remaining three months of the current fiscal as the government took advantage of a slump in global oil prices to five-year low to shore up revenue without stoking inflation. Balagopal said when the international price of crude has been decreased from $115 per barrel to $55 per barrel, the government is increasing the “real price” of petroleum products.

“If the government passes over the international price of petroleum to Indian consumers, it would be less than Rs. 40 per litre of petrol and diesel,” he said.

If admitted by the Rajya Sabha Chairman Mr. Hamid Ansari , the notice will go to the Privileges Committee of the Rajya Sabha, headed by Deputy Chairman PJ Kurien. The ruling NDA has just two members in the 10-member Privileges Committee, which will take a decision on the notice and report its decision to the Upper House.

Union Government to soon implement many reforms recommended by the Financial Sector Legislative Reforms Commission : Finance Minister Arun Jaitley

Finance minister Arun Jaitley said this past Saturday, at an event organized by the Institute of Company Secretaries of India in Mumbai, that the government is keenly studying the Financial Sector Legislative Reforms Commission (FSLRC) report and will implement several of its recommendations in the coming days.

(Arun Jaitley at an event organized by the ICSI in Mumbai on Saturday)

 The Financial Sector Legislative Reforms Commission (FSLRC) headed by Justice (retd.) B.N. Srikrishna was constituted by the Ministry of Finance, Government of India in March 2011 with a mandate to comprehensively review and redraw the legislations governing India’s financial system. According to the FSLRC, the current regulatory architecture is fragmented and is fraught with regulatory gaps, overlaps, inconsistencies and arbitrage. 

To address this, the FSLRC submitted its report to the Ministry of Finance on March 22, 2013, containing an exhaustive analysis of the current regulatory architecture and mooted a draft Indian Financial Code to replace the bulk of the existing financial laws.  The draft Code seeks to move away from the current sector-wise regulation to a system where the RBI regulates the banking and payments system and a Unified Financial Agency subsumes existing regulators like SEBI, IRDA, PFRDA and FMC, to regulate the rest of the financial markets. This was in tune with the Commission’s recommendation of pursuing a non-sectoral, principle-based, legislative architecture for the financial sector through restructuring and upgrade of existing regulatory agencies, and creating new agencies wherever needed for better governance and accountability.

In September this year, the National Democratic Alliance Government had formed task forces to work on the FSLRC recommendations. Jaitley said the four expert groups were currently examining the various aspects of the committee’s suggestions, as many changes to existing laws and regulations might be required. The task forces would lay down the road map for upgrade of existing agencies and establishment of new agencies — the Financial Sector Appellate Tribunal, Resolution Corporation, Public Debt Management Agency and Financial Data Management Centre.  He did not comment on the current status of the work done by these groups. However he said that “Under present circumstances some administrative and legislative changes may be required to the recommendations of the FSLRC report.,”

The FSLRC report has been a bone of contention between the Union Government and the Reserve Bank of India. In June, RBI Governor Raghuram Rajan had called certain recommendations of the report “somewhat schizophrenic” and “faddish and impressionistic rather than based on deep analysis”.

The stiff opposition by the Reserve Bank of India (RBI) over the financial sector reforms recommended by the Financial Sector Legislative Reforms Committee (FSLRC) had even prompted President Pranab Mukherjee to make an unusual intervention and take up the issue with Prime Minister Narendra Modi.  Reports indicate that following the President’s intervention, the Prime Minister’s Office had asked the Finance Ministry to explain the inordinate delay in implementing the recommendations of the committee. 

Report submitted by the Financial Sector Legislative Reforms Commission (FSLRC) headed by Justice (retd.) B.N. Srikrishna can be accessed here.

Finance minister Arun Jaitley said on Saturday that the government is keenly studying the Financial Sector Legislative Reforms Commission (FSLRC) report and will implement several of its recommendations in the coming days.

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