Industry disappointed over new land bill

Land Acquisition Bill known as Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Bill, 2013, passed recently in the Parliament is likely to create more problems and confusions than solving any of them. Industry bodies were united in criticizing the bill for various reasons. According to FICCI “the Land Acquisition Bill is expected to make key factor of production for manufacturing scarce and expensive”. CII also felt the same way when its spokesperson said “Industry has serious concerns on some of the provisions of the Land Acquisition Bill passed by the Lok Sabha”.

Presently, the Central Government and State Governments acquire land across the country for setting up infrastructure projects like airports, roads, for setting up universities/scientific institutions, projects of basic amenities, water/ sanitation works/hospitals, industry and urban development. The land acquisition process is carried out under the provisions of the Land Acquisition Act, 1894. The government came out with the new law keeping in mind the recent developments. Some of the highlights of the bill are:

• Defining the term ―affected family, which includes both the land losers and livelihood losers.
• Provision of R & R benefits in case of specified private purchase of land equal to or more than 100 acres in rural areas and equal to or more than 50 acre in urban areas
• Provides Social Impact Assessment (SIA) study in all cases where the Government intends to acquire land for a public purpose.
• Putting limitations on acquisition of multi-crop land for safeguarding the food security.
• Provisions of consent of the 80 per-cent affected families for land acquisition for certain projects.
• Provision for enhanced compensation to the land owners and rehabilitation and resettlement entitlements.

The industry fears that the new Act will increase the cost of acquisition manifold and make the industry unviable. “Cost of Land Acquisition is likely to increase by 3-3.5 times, making industrial projects unviable and raising costs in the overall Indian economy”, says S Gopalakrishnan, President, CII. Also the process of land acquisition will become more time consuming than before. According to FICCI “with passage of Bill, cost of land is not only go up significantly, even the process of acquiring land will get stretched by 4 – 5 years”.

Also some states had opposed the idea of applying R&R on all cases of land acquisition by the industry. For example, Government of Maharashtra was of the view that the R&R should not be applied unless somebody‘s house, living or livelihood is acquired. What if transaction is carried through negotiation without involving the Government? In such cases how R&R provisions of the Bill can be applied? “In negotiated price the totality of the premium is paid by the buyer and there is no need for anything beyond that negotiated price” feels CII.

CREDAI is of the opinion that the R&R provisions cannot be made applicable to private companies purchasing land from land owners/families who sell the same of their own volition and free accord. According to CREDAI if private land acquisition is brought under this ambit, then the entire township policies which every State Government has enacted to expedite supply of housing stock will be completely defeated. It will increase the cost of housing.

At a time when major projects are stalled and industrial production is dwindling, one would have expected more facilitative policy from the government to bring back the competitiveness and also attract more investment. However, the government seems to have had other thoughts in its mind.