New govt to scrutinise two key laws of UPA

MGNREGA and Land Acquisition Act to undergo complete overhaul, officials say

Officials are set to propose to the Narendra Modi-led government to modify two major laws of the outgoing UPA government to boost the country’s economy.

The Mahatma Gandhi National Rural Employment Act (MGNREGA) and the Land Acquisition Act will come under scrutiny as officials believe both laws require a complete overhaul to spur development. They are likely to suggest to the new rural development minister that it is better to limit the MGNREGA to select backward districts instead of the entire country, as the ministry is struggling to get sufficient funds. 

In the review by Cabinet Secretary Ajit Seth, Rural Development Secretary L C Goyal suggested that it would be better to focus on 330 backward districts instead of implementing the scheme in 600 odd districts. The government spends around Rs 40,000 crore in a year for the flagship scheme of the UPA government. It entails 100 days of guaranteed unskilled work per year to every rural household.

Modi, during election campaigning, had also expressed his eagerness to review the scheme claiming that tangible assets were not being created from it. In order to reduce the number of beneficiary districts, the new government would have to amend the Act.

The job guarantee scheme came under attack from many corners and it was said that money was being wasted as the programme faced numerous problems like delay in wage payment, bogus names in beneficiaries’ list and so on.

Several officials also suggested the need for amending the new Land Acquisition Bill, known as the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act approved by UPA II in its last leg.

They felt it had became a major hurdle to acquire land for setting up projects. Though the Act aimed to ensure that owners got fair compensation for land taken away from them for various projects, officials said that this had resulted in high acquisition costs.

There was an increase in the cost of land from three to four-fold in rural areas, and double in urban areas after the new law came into force, they said. Officials of the department of industrial policy and promotion (DIPP), ministries of road transport and highways, railways, power and port suggested that the amendments need to be brought in immediately to develop infrastructure and set up industries. Seth is likely to brief the new prime minister next week, sources said.