India government introduces long-delayed land reform bill

NEW DELHI, (Reuters) – India’s government edged  closer to replacing a century-old land acquisition law yesterday, introducing a bill in parliament that seeks to  placate a rural voter base worried it is being short-changed in  the country’s rush into modernisation.

Delayed for months by anti-corruption protests that  paralysed parliament, the bill that would increase compensation  for forced and large land  sales was squeezed into the  lower house ahead of a recess and could be voted on in December.

Compulsory land acquisition for the public good is a  contentious issue as crowded India seeks to industrialize, often  at the expense of small landholders. The new bill proposes  paying four times market value for land earmarked for  infrastructure projects in rural areas.

The legislation, spearheaded by ruling Congress party leader  Sonia Gandhi and her son Rahul, is seen as crucial for the  government’s chances of winning elections in the heartland state  of Uttar Pradesh next summer.

The Gandhi family has staked their political future on  making big gains there ahead  of a general election in  2014, where Rahul Gandhi is seen by many as a potential prime  ministerial candidate for the Congress party.

“The entire credit for this bill should go to Rahul Gandhi,”  Rural Development Minister Jairam Ramesh told reporters. He said  opposition parties broadly supported the reform, which he hoped  will be approved in December.

The mainly poor farmers who make up the bulk of India’s 1.2  billion population worry they are being ripped off by rapacious  businessmen and politicians in land deals, while companies are  wary of making large investments for fear courts will strip them  of their holdings.

The government wants to meet the needs of the farmers but  must also keep India’s economy growing at a fast rate by  attracting investment for new roads, housing and factories.

Major infrastructure projects are currently held up by  clashes over land. Tata Motors had to abandon plans in  2008 to build a car factory in West Bengal state due to violent  protests by farmers.

‘LAND FOR LAND’

In the poor coastal state of Orissa, protests by farmers  have slowed the construction of India’s biggest single foreign  direct investment, a $12 billion steel mill belonging to South  Korea’s POSCO .

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