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Liberalisation of India's land market will be uneven

Wednesday, January 14, 2015

Significance

The legislation had sought to ameliorate problems in land acquisition for infrastructure and industrial projects, which had deepened over the previous five years and contributed to the overall economic slowdown. However, the law has been criticised for being ineffective, even counterproductive. The ordinance seeks to accelerate land acquisition by reducing mandatory consultation and social impact assessments while improving the financial terms of compensation. However, it faces rising political opposition and is unlikely to ease land acquisition at the state level.

Impacts

  • Legislation will not resolve such key problems as short supply of land and the lack of clear ownership documents.
  • The domestic land market will remain fractured, with liberal reforms advancing in some states faster than others.
  • Greater government transparency in land acquisition for private players, which would limit popular resistance, is unlikely to occur.
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