March 17, 2015 / 2:53 PM / in 2 years

Indian opposition unites to oppose Modi land reform push

India's Congress Party chief Sonia Gandhi walks after paying homage at the Mahatma Gandhi memorial on the 145th birth anniversary of Mahatma Gandhi at Rajghat in New Delhi October 2, 2014.Adnan Abidi

NEW DELHI (Reuters) - India's usually fractious opposition parties joined forces on Tuesday for a march against a bill to ease land acquisition rules, a rare show of unity that bodes badly for a key part of Prime Minister Narendra Modi's economic overhaul plans.

Opposition parties from across the political spectrum, including Congress President Sonia Gandhi, walked from parliament to the president's home demanding the government drop its plans.

"We have come together to oppose the Modi government’s amendments," Gandhi said, demanding the right to fair compensation for farmers and transparency in land acquisition. She was flanked by former Prime Minister Manmohan Singh and the leaders from 13 other political parties.

Conflict between farmers and companies trying to secure land for industrial projects has hampered India's plans to expand its network of highways, build mines and other infrastructure, holding up about $300 billion of investment.

Analysts say India's poor infrastructure is one of the main impediments to the nation enjoying economic growth needed to help lift hundreds of millions of people out of poverty.

In December, the government passed an urgent executive order to make it easier to buy land. The government needs lawmakers in both houses of parliament to pass the bill before the end of this parliamentary session in May to prevent the order lapsing.

The proposed changes to the law would mean projects in defense, rural electrification, rural housing and industrial corridors would not need to seek the consent of 80 percent of the affected landowners as mandated.

They will also be exempt from holding a social impact study involving public hearings - procedures that industry executives say can drag out the acquisition process for years. Compensation to landholders will stay at four times the market price.

While the government has had success raising billions of dollars through the sale of coal blocks and telephone spectrum, Modi has struggled to pass legislation through the upper house of parliament where his party is in a minority.

In Modi's first major economic reform almost a year after coming to power, parliament voted to allow more foreign investment in the insurance sector last week. The land acquisition bill and other reforms will be more difficult to pass because of the lack of support from rival parties.

Reporting by Andrew MacAskill; Editing by Frank Jack Daniel and Mark Trevelyan

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