Ordinance makes land acquisition for private hospitals, educational institutions public purpose

In a major boost to private companies seeking land to set up hospitals and educational institutions, the government has eased the way for them under the comprehensive amendment to the Land Acquisition Act, 2013, wherein it has redefined 'public purpose' to now include private hospitals and institutions.

The government has also done away with the time limit of five years to start construction of work on the acquired land, enabling public and private players to hang on to the acquired land as per their plan through the recently promulgated ordinance issued to bring about changes in the Act.

"We have redefined 'public purpose' for which land will be acquired by the government to now include even private hospitals and private educational institutions because the government does not have the capacity to set up big universities, institutes and hospitals on its own," The Economic Times cited an unnamed senior government official as saying.

The original provisions of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 prohibited government from acquiring land for private hospitals, private educational institutions and private hotels.

However, the ordinance, which has come into effect from 1 January after being approved by the President, said, "In the principal Act, in Section 2, the words 'private hospitals, private educational institutions and' shall be omitted."

This means that barring private hotels, the government will go out and acquire land for private players to create social infrastructure.

Besides, the government has succumbed to industry pressure to ease time-bound utilisation of the acquired land, in the absence of which it would have gone back to the original owners under the original Act.

The government has amended Section 101 of the Act by doing away with the five-year timeline. Instead, it has substituted it with "a period specified for setting up of any project or for five years, whichever is later," says the ordinance. This will be a major relief to big players in power projects where gestation period is sometimes longer than five years.