With the number of new projects, in terms of their capital values, down sharply and, within this, the proportion of stalled projects up significantly, it?s not surprising that industrial production for FY12 rose just 2.8% versus 8.2% in FY11. Given that ease of land acquisition is a vital part of any new industrial project/township?think Nano and think Mamata Banerjee?and the spate of judgments in UP that cancelled land acquisitions for industry, the Land Acquisition, Rehabilitation and Resettlement Bill 2011 was eagerly looked forward to. With one-time payments fixed at at least six times the circle rate, generous annuities and jobs, the Bill would definitely raise costs of land acquisition, but land costs are generally a small fraction of the costs, particularly for large projects. While the general idea was to keep government away from land acquisition, a window was left open for government help?if industry managed to get 70% of the land, the government would help it acquire the rest. Some exceptions were also left, where larger government help would be available. The Delhi Metro, for instance, was given 960 acres of land under the Metro Railways (Construction of Works) Act, 1978.
The Parliamentary Standing Committee on Rural Development that is looking at the Bill, however, isn?t convinced the higher economic growth this results in is good for the country, for citizens who lose their land. So, it says, the government is not supposed to acquire land for infrastructure projects executed under PPP?why land acquisition is okay for a government airport but not for a PPP-airport is not clear. Preliminary reports suggest even the 70:30 clause is to be scrapped. So while industry was hoping the government would look at creating land banks and the higher acquisition costs would make life easier for it, that looks like a bit of a pipe dream. The only saving grace is the ceiling on land acquisition, after which R&R obligations would kick in, is to be left to the states instead of being decided by the Centre.
