NEW DELHI—India’s prime minister said he wouldn’t renew a contentious executive order aimed at making it easier for the state toacquire land for infrastructure and industry—confirming a reversal on a measure his administration had touted as important for reviving the economy.
Worried about alienating rural voters and facing protests from the opposition, Prime Minister Narendra Modi earlier this month effectively abandoned efforts to amend India’s strict land-acquisition law in Parliament. Allowing his temporary executive order to lapse underlines his unwillingness to push unpopular policies.
Mr. Modi’s U-turn a few months before a key election in the agrarian state of Bihar will likely further disappoint investors as other economic measures, including crucial tax proposals, have stalled in the legislature.
Business executives have long complained that difficulty in acquiring land has stymied development in India.
In a radio address on Sunday, Mr. Modi blamed his political opponents for “spreading misinformation” about the land-law changes. He said that his proposals would aid rural development and create jobs but that he didn’t want to give anyone “more opportunities to scare farmers.”
“Every voice is important to me, but the farmers’ voice has special importance,” Mr. Modi said. “Now, there is no reason for delusions. If someone tries to frighten you, there is no need to be scared.”
Mr. Modi’s rivals swiftly claimed victory. At an election rally in Bihar, opposition leader Nitish Kumar said protests had forced the prime minister to give up and “bow before the will of the people.”
In 2013, before Mr. Modi’s election, the then-governing Congress party, passed a land-acquisition law that raised the prices the state had to pay to acquire land and imposed a series of other requirements. Among them: the government had to obtain the consent of 80% of landowners when the acquisition was for private enterprises and 70% in the case of public-private partnerships.
Through temporary executive orders, Mr. Modi’s government exempted certain kinds of projects, such as rural infrastructure and industrial corridors, from these provisions. The prime minister also moved to make the changes permanent by amending the law. In February, Finance Minister Arun Jaitley warned that failure to do so would “add to the poverty of India.”
The left-leaning Congress party called the changes “anti-farmer” and “pro-corporate” and some of Mr. Modi’s own allies refused to support him. A parliamentary committee set up to build a political consensus around the law received hundreds of letters from nonprofits and farmers groups, most of them critical of Mr. Modi’s proposed steps.