Modi rows back on land purchase reforms

NEW DELHI • Indian Prime Minister Narendra Modi will allow an executive order making it easier for businesses to buy land to lapse today, having failed to win support from opposition parties - a major blow to his economic reform agenda.

Mr Modi said yesterday that the government was ready to amend the proposed law, and he criticised the spreading of false rumours that had made farmers fear the changes proposed.

"I have always said that, in the dispute related to the land acquisition law, the government is open-minded," the premier said in his monthly radio address.

"I am willing to accept any suggestion for the benefit of farmers," he added.

He swept to power last year riding on hopes that he would accelerate an economic transformation begun in the 1990s, but he is struggling to build support for his reforms in Parliament. His Bharatiya Janata Party is in the minority in the Upper House.

Party leaders said they had not given up on making it easier to acquire land needed to kick-start hundreds of billions of dollars in stalled projects. However, after failing to win support in Parliament, they might ask states to pass their own laws.

Mr Modi has had to issue temporary executive orders in the past seven months to let the government forcibly buy farmland for industrial development.

He has failed to secure the votes in Parliament needed to make the changes permanent.

Land reform is key to his plans to build new roads, homes and factories. His vision is to have 100 new "smart cities" across India linked by industrial corridors and high-speed rail routes criss-crossing the country.

Conflict between farmers and companies trying to secure land for industrial projects has hampered India's plans to expand its network of highways, put up other key infrastructure and build mines, holding up about US$300 billion (S$423 billion) in investments.

REUTERS

A version of this article appeared in the print edition of The Straits Times on August 31, 2015, with the headline 'Modi rows back on land purchase reforms'. Print Edition | Subscribe