Finance Minister Arun Jaitley briefs the media on the Union Cabinet meeting.
The cabinet has cleared emergency executive orders to greatly ease land-acquisition rules and auction minerals such as iron ore to kickstart hundreds of billions of dollars in stalled projects. Finance Minister Arun Jaitley said that while the interests of farmers have been protected, five categories of projects including defense and national security and rural infrastructure and low-cost housing will be exempt from strict regulations cleared earlier.
Restrictions on buying land, under a law championed by the last Congress government, are among barriers holding up projects worth almost $300 billion or nearly Rs 20 lakh crore in sectors such as rail, steel, mining and roads.
Farmers are still to be compensated at four times the market rate for land in rural areas and twice the rate in urban areas, but the extent of consent needed for land acquisition has been trimmed considerably, especially for public-private partnerships.
"Procedural requirements have been relaxed - like the required consent of 70 per cent of affected landowners and a study on the social impact - provisions like that will not apply; higher compensation will apply," said the Finance Minister, referring to five types of projects that include industrial corridors around major highways.
Four-fifths of all landholders concerned in a sale must give their consent before any land is acquired for a private project.
The ordinance will have to be cleared by the next parliamentary session which starts in February.
The government has now in its seven months in office used an ordinance six times due to a lack of majority in the upper house of Parliament or Rajya Sabha.
After the last Parliament session ended in a legislative logjam on December 23, the government passed two orders to let foreign firms raise their stakes in insurance ventures and allow the commercial mining of coal.
But Parliament, in its winter session which ended last week, did not ratify the November ordinance on coal, forcing the government to pass another ordinance to allow the auction of coal mines.