Student message to Narendra Modi: Overhaul Land Acquisition Act

Business Today talks to Abhishek Bhattacharya, PGP class of 2015, Indian School of Business (Mohali), on what should be the new government's agenda -

A strong majority for the NDA will herald a stable regime focused on high GDP growth and job creation.

 

The first item on the agenda should be a total revision of the highly bureaucratic Land Acquisition Act. Under the new Act, acquisition could take up to 50 months (assuming zero extensions) which would impact cost and feasibility of infrastructure projects.

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Second, a timeline for introduction of the Goods and Services Tax (GST) should be set up. Clarity on taxes on transfer of ownership will stem negative investor sentiment that has generated from Vodafone and Nokia tax rows.

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Third, Modi should fulfil his promise of enacting a law only when he repeals ten by revamping our legacy labour laws which are stifling manufacturing sector growth.

Fourth, excess stocks in Food Corporation of India (FCI) warehouses over and above buffer norms should be liquated; this would rake in about Rs 80,000 crore as per estimates by Ashok Gulati and Shweta Saini. Disinvestment should be pursued aggressively. Just by restricting ownership to 51 per cent in public sector banks could bring Rs 32,000 crore in the government's kitty. These measures will help achieve the fiscal deficit target and push prices downward.

Fifth, these reforms should be used to push the Reserve Bank of India (RBI) to lower interest rates to boost investment.

In a nutshell:

>> Revision of Land Acquisition Act is urgent. The new Act could take up to 50 months assuming zero extensions.

>> Timeline for introduction of GST and clarity on taxes on transfer of ownership to stem negative investor sentiment.

>> Revamp labour laws to boost manufacturing sector.

>> Liquidate stocks in FCI warehouses in excess of buffer norms. Pursue disinvestment aggressively, especially in public sector banks.

>> Use reforms to push the RBI to lower interest rates.