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Prime Minister Relaxes Transfer of Land Requirements

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The Press Release of 2 August 2012 (‘PM resolves major Land Transfer bottleneck’) relaxes the Land Transfer policy of the Government on India which earlier necessitated Cabinet Approval for transfer of Government Land.

This comes as a welcome relief, as Infrastructure Projects especially the PPP (Public Private Partnership) Projects  were experiencing major delays because of delay in transfer of land.

The ‘Cabinet Approval’ requirement was brought about by the Office Memorandum of 28 March 2011[1] and the Cabinet Secretariat DO letter No. 511/2/1/2012, as the Government (Department of Economic Affairs) was still in the process of drafting a Land Acquisition policy. It stated that the Ministries and Departments were required to seek Cabinet Approval ‘in the case of sale or long term lease of land belonging to the Government or Government controlled statutory bodies’. (Previously, only the ‘express approval’[2] of the Ministry of Finance was necessary prior to any ’sale/grant/assignment/allocation/disposal of government assets or resources or assets/resources created from Government funds for autonomous bodies’.)

As per the latest Press Release, the PM[3] has relaxed the requirement for the following categories of projects  (except projects relating to forest and defence land):

1.     Land transfer from Ministries to statutory authorities or Public Sector Undertakings subject to other applicable Government Of India Rules;

2.     Land transfer whether on lease or rent or license to a concessionaire appraised through the PPPAC (Public Private Partnership Approval Committee) route approved by Finance Minister/Ministers Concerned/Cabinet, depending on the value of the project;

3.     Development and use of railway land by Rail Land Development Authority (RLDA) as per provisions of Railways Amendment Act, 2005, Rules framed thereunder, and other applicable policies and guidelines.

It is hoped that the time taken for completion of PPP projects will be significantly reduced and therefore this has come as a welcome move for many sector experts. However, how effective this change will be, will depend on the thresholds decided by the Government for seeking approvals, as most infrastructure projects have high valuations.

[1]http://finmin.nic.in/the_ministry/dept_expenditure/gfrs/Cabinet_Long_Term_Lease.pdf Office Memorandum of 28th March 2011

[2] Office Memorandum of 25 June 2012

[3] http://pmindia.nic.in/press-details.php?nodeid=1480 – Press Release of 2 August 2012

[4] http://www.livemint.com/2012/08/02151041/PM-eases-govt-land-transfer-no.html?h=E

Pingal Khan

pingal.khan@pxvlaw.com

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