India's cabinet approved on Monday a bill to reform land acquisition, aimed at giving farmers a better deal while helping fast-track industrialisation in Asia's third-largest economy.
Difficulties in acquiring land for industrial and infrastructure projects is seen as one of the biggest obstacles to India's economic expansion. Several multi-billion-dollar projects have been held up for years because of protests by farmers against the forcible takeover of their land.
The issue is politically hot in a country home to hundreds of millions of rural poor, who often take to the streets to rally against the government acquiring plots at what they say are below-market rates.
The land bill is important for the ruling Congress party to cement support among farmers, ahead of next year's polls in key Uttar Pradesh state -- which has seen several flare-ups over land acquisitions -- and national elections in 2014.
Demonstrations have halted the construction of South Korean Posco's $12 billion steel mill in eastern Orissa state and held up the construction of apartments outside New Delhi.
Prime Minister Manmohan Singh's government released a draft version of the bill in July, which suggested offering farmers as much as six times the price of their land when it is taken over for industrial use. It also proposed at least 80 per cent of owners must consent to such acquisitions.
"It has been approved," Minister for Rural Development Jairam Ramesh told reporters after a cabinet meeting. The bill still needs to be approved by parliament and Ramesh said it was likely to be sent to the lower house on Wednesday.
Ministers did not disclose whether the bill was the same as the draft version released to the public.
India's current land acquisition law was framed over a century ago and allows the government to take over land for a "public purpose" without compensation.
Powerful Congress chief Sonia Gandhi and her son Rahul Gandhi, seen as prime minister-in-waiting, have personally pushed for the new law.