Union Minister for Finance, Corporate Affairs and Information & Broadcasting, Arun Jaitley speaks to ET Now about the Land Acquisition Bill.
In an interview with ET Now, Arun Jaitley, Finance Minister, Union of India, shares his own and the government’s apprehensions on the land bill.
ET Now: The newspapers are divided on what you have done with the land bill. Today on August 31, the ordinance lapses. In your own words, the earlier bill is one of the worst drafted legislations. Why would you allow it to lapse? Do you agree with the common perception that you have gone back on the land bill?
Arun Jaitley: This perception may have been shaped by lack of understanding by people who shape public opinion. Therefore, it is extremely important for those in public life, politics, policy making and media to understand the importance of what we are doing.
I have some reservations regarding the content of the 2013 law. Its content may hamper India’s development and I feel it is one of worst drafted piece of legislation. For example, it creates a huge amount of ambiguity as to whether consent is required or not required. The person who drafted this probably wanted to provide for consent quickly. They ended up with a draft, which exempts consent in many cases.
When they exempts consent, can the private sector also participate in land acquisition or not? What is the distinction between section 2(1) and section 2(2) of the act? I am going to elaborate this very shortly in a written piece that I am going to speak on. It creates all kinds of ambiguities, which have to be corrected.
For instance, on social impact assessment if you add the various steps, it totals 52 months but then it says social impact assessment is not for more than six months or not more than three months. How can this time frame be compressed if you want a social impact assessment?
We honestly felt wrong about this. All the chief ministers, all the states that we consulted requested us to amend it. Once we took steps to amend it, the Congress changed its stance and said they were going to oppose it. As a result, we have a parliamentary stalemate. We called the chief ministers again who said to us that they wanted a few changes.
They said if such changes can be executed at the centre, it would be good for them. Land is a concurrent list subject. So, if we come to a stalemate, we shall leave it to the states.
Coming back to your question, on whether it is a rollback or a step backwards, we did say in section 10 in the order that the ambiguity in the 2013 law was not desirable. All we said is there are five purposes, which are really identified with development of rural areas. The appropriate agency of state, which is the state government is entitled to exempt any or all of them. So, under the ordinance we empowered the states.
The states said do not empower us under the ordinance. It is a concurrent list subject, you assure us you will give consent to our proposals. The net effect is actually the same following either route. Therefore, rather than allow the parliamentary stalemate to carry on and on and on, you follow an alternative route and that alternative route is that you empower the states by assuring them we give you flexibility, whatever changes you want to bring out in the law, please bring them out as soon as possible.
ET Now: Fair point indeed. That is one way of looking at it. Again, you have the might of numbers with you in Parliament. Why is it that you did not take the opposition head on because the opposition has now changed its stance on this? Why is it that you did not call for a joint session of parliament and let this pass through because you have the upper hand in numbers?
Arun Jaitley: The provision for a joint session is that one house has to accept it and the other has to reject it. In the upper house, we are in a minority. I think, the opposition with their larger numbers decided to indefinitely delay it. We, therefore, referred it to a select committee where there is also stalemate. This leads to a situation where you have to wait for a particular period of time, which may amount to almost a year before a joint session is called. Now should we continue to evolve ourselves in that traffic jam or should we take the bypass, which is a faster and an easier bypass with very low political costs.
ET Now: Are you still hopeful of some kind of resolution coming in through the Rajya Sabha considering the draft is with the joint panel or have you given up on the parliamentary process altogether?
Arun Jaitley: The bill to replace the ordinance is before the committee and I am sure there are some provisions on which a consensus is going to be brought out. For instance, take the five year rule. As I understand, if a project if not completed within five years, you restore the land back to the party from, which you have acquired it. Can a township be completed in five years?
ET Now: So you will have pockets of agriculture happening…
Arun Jaitley: You have pockets of agriculture and pockets of built up areas. Now these are impractical situations and that is why I called it the worst drafted legislation ever because in drafting perception, it does not actually take into consideration the realities of the situation.
ET Now: Corporate India is looking at this legislation with a lot of hope. On the other hand, if it is left to the states, they are not expecting a resolution at the earliest because every state will….
Arun Jaitley: That is right. Tamil Nadu has already initiated a process and made some recommendations. I am sure you will have two categories of states — those who are content with the 2013 law and those who want land for developmental purposes and therefore…
ET Now: And that is where investments will be happening.
Arun Jaitley: Exactly, that is where investments will come in. Frankly speaking, all the Congress states, Maharashtra and Haryana at that time ruled by the Congress led the suggestion for a change in the 2013 law.
ET Now: You have very ambitious targets. You are looking at mass scale industrialisation, which is going to create jobs. You are looking at urbanisation. You are looking at smart cities. What kind of a setback if at all will come about with a lack of central law in the picture that your government has envisioned?
Arun Jaitley: I do not call it a setback. I think it is a step forward. Rather than involve yourself in a political stalemate and remain parked in a traffic jam situation, you take the alternative route, which has lesser political cost, allows greater flexibility to the states. States which want to benefit from this process, emerge as the beneficiary and there is no complaint from anybody.
ET Now: The prime minister says we are back to the position we enjoyed legislatively before this government came to power. This is chiefly owing to the stalemate that the opposition has created. Did you underestimate the political opposition to this because there has been a lot of grandstanding.
Arun Jaitley: Land is always a sensitive issue. Therefore, there is no question of underestimating the opposition. I have never been in doubt that the opposition’s actions have been purely for positioning purposes. After all, the chief ministers of a party come up (to me) and said they wanted changes to the law. Then the party decides to say no because of political reasons. They decide to oppose the changes. It was this change of stance that actually created the problem.
ET Now: Competitive federalism may take care of the land legislation. However, the buzz in New Delhi is that the opposition will let the GST bill through because you let the states handle the subject of land. Is there any truth to this because a special session was being talked about where the GST bill would have been dealth with. Well, sir?
Arun Jaitley: I have been in touch with the Congress party. Mr Venkaiah Naidu has been in touch with the Congress Party. I have not the least doubt in saying that they are very unsure of their stand on the GST. Once, they were the ones who pioneered the GST. Now, they are picking holes in their own proposals. That is a politically unsustainable situation. Therefore, in the budget session they told us that they would work with us on this during the next session. Now, they say we are not against the GST but we had some suggestions. Alright, we discuss the suggestions with them and now they say do not want to do it right now but want to do it after a little while. They will avoid its implementation on one pretext or the other.
ET Now: Does the global economic and financial turmoil, rest the moral authority both on the government and the opposition to let the GST bill through?
Arun Jaitley: I have always believed there is a spread of political power. It is a constitutional requirement. You need larger support for such legislation and therefore, the nature of this discourse in India has to change. Looking at the global situation and the impact of that global situation on India, can we convert it into an opportunity? Are we just busy scoring political points against each other or are we responding to the situation by taking steps, which will enable India to take advantage of the current global situation, which has been created?
ET Now: I am going to take a cue from what you just said because many people believe this is a historic opportunity for India to seize the centrepoint for that growth engine that China will no longer be. India can seize that opportunity and you said that in an interview to the BBC. However, RBI governor Rajan told the same broadcaster that India is a long way away from being the central growth engine owing to the difference in size of the two economies of India and China.
Arun Jaitley: Both the statements are correct.
ET Now: How do you justify that sir?
Arun Jaitley: China was singularly shouldering 50 per cent of global growth. India at a its very best can shoulder 10 per cent to 15 per cent of global growth. Therefore, the size of our economy is different from that of China’s. So, the governor is absolutely correct when he analyses this as an economist. At the same time, if we are able to shoulder about 15 per cent of global growth on our shoulders, we could still be that central engine. We probably are the only economy, which grew last year by 7.3 per cent. This year we hope to better that figure. Therefore, there are not too many major economies in that range. China slowed down.
Now, the world needs more viable shoulders to carry it on. Today, the worst affected sectors are commodities and oil. We are net importers. Therefore, we are buying products at a cheaper price. We do not have to sell them or under sell them at a cheaper price so we are the beneficiaries of the slowdown in the oil prices and the commodity prices. We are not a part of China’s production chain in that sense. We have huge domestic demand. One of the weaknesses of our economy is we need to increase that domestic demand a little bit.
Therefore, under the current situation, if investors who are pulling moneys from wherever they can pull out and are looking for alternative avenues to invest in; if we carry on our reform process, supposing we have the GST through either by the centre or by the states; we can get our land laws a little liberalised, we take the necessary monetary policy steps, our private sector investment picks up, then of course, our ability to move into still higher range of economic growth is there and that is where the real opportunity lies for India.
Source: Economic Times