CII for cap on subsidy, review of relief for land acquisition

Sanjeev Sharma

Tribune News Service

New Delhi, May 27

Industry chamber CII has said it is hopeful that the government would continue to maintain strong momentum of reforms going forward and has suggested a cap on subsidy and a review of the compensation package for land acquisition.

Outlining the area of reforms requiring further policy attention, CII has urged the government to consider policy strategies in critical areas that would bring huge economic benefits for growth, investment and employment creation.

Setting a ceiling on subsidy expenditure would be an important step in that direction, stressed the CII president Sumit Mazumder. CII has said all subsidy disbursals may be converted into direct benefit transfer (DBT) by linking Jan Dhan Yojana, Aadhaar and mobile technology or the JAM trinity, including for foodgrains, LPG and kerosene, within two years.

PSU disinvestment must be rolled out through the year while restructuring and privatisation of loss-making PSUs should be initiated, it added.

Welcoming the government’s initiative to introduce GST, CII said this would add 1.5 percentage points to the GDP growth rate.

On the issue of land acquisition, CII has supported the government’s efforts to get the legislation through Parliament and has suggested that it should review the compensation package to reduce rehabilitation and resettlement costs as sellers receive multiples of market value on acquisition. The consent clause from gram sabhas should be dropped as it is already required from land owners for the schedule V areas, suggests CII.

“There is a huge need for ex ante zoning of land for identification of land use over a 100-year time horizon and establishment of State Land Bank Corporations for scientific acquisition and disbursal of land parcels for industrialisation and urbanisation,” Mazumder said.

According to CII, the infrastructure sectors require multiple interventions across cross-cutting areas such as renegotiation of PPPs, securing government approvals before award of projects, long-term financing options, systematic exit policies and dispute resolution, among others. It is important to distinguish treatment of non-performing assets in the infrastructure sectors from those in other sectors, CII said.

On the issue of labour reforms, to encourage mass manufacturing operations, CII urged the government to modernise the Industrial Disputes Act, 1947, to apply to establishments with over 500 workers instead of 100 workers. This may be supplemented with increased provision for compensation in case of retrenchment, it said.

Mazumder observed, “CII has suggested that labour laws be converged and simplified to avoid contradictions and ensure easy compliance. This will promote creation of jobs in factories.” It recommended permitting contract labour and distinguishing contract workers working with large contractors as primary employers. Several amendments are also required in the Factories Act and Trade Unions Act, 1926, while pending legislation relating to labour issues should be passed without delay, the CII release said.