Will the new land acquisition law help?

Aug 27 2013, 10:33 IST
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SummaryWhile the Bill integrates all aspects of land acquisition in one policy, it is skewed in favour of the landowners and limits the industrys prospects rather severely

than 6-7 years for acquiring land. In what way this would help us improve our ranking for doing business needs to be ruminated.

Further, the retrospective clause has been reinserted in the Bill after the meetings of GoM and the all-party meet. This attaches an uncertainty factor and makes land acquisition predisposed to litigations. Existing land transactions where no award under Section 11 of the Land Acquisition Act 1894 has been made, or even where award has been made but possession has not been taken or compensation has not been paid for 5 years prior to the implementation of new norms, in all such cases the provisions of the new Act will apply. Any legislation, Ficci has been advocating, needs to be prospective in nature in order to retain investors confidence.

Coming to the special provisions of the Bill, it says that, as far as possible, no acquisition of land should be done in scheduled areas (irrespective of any threshold), as per the Fifth Schedule of the Constitution. This would include many areas in the states of Jharkhand, Bihar, Chhattisgarh, Madhya Pradesh, Maharashtra, Orissa, Rajasthan, Gujarat and Andhra Pradesh. So, are we suggesting that these areas require no further development of infrastructure, both physical and social? Industry, which can provide employment to large number of people in these areas, would also not come up in the absence of any adequate infrastructure development in these areas.

The Bill also provides the state governments the right to exercise the option of lease arrangements for the land instead of acquisition, thereby retaining the ownership with the farmer or land-owners. Besides many other concerns, leases have uncertainty factors attached to them as they may or may not come up for renewal. It also limits flexibility over the development and operations on the land.

The Bill has fixed R&R provisions and the market value of the land on the presumption that land transactions are undervalued across the country, but ignoring the fact that land prices have witnessed a sharp increase in the last decade. The Bill is certainly going to escalate the already inflated land prices and make it further difficult for the industry to purchase land for expansion or fresh investments. The Bill provides for land acquisition under public purpose, for industrial corridors and NIMZs, but not for the larger manufacturing sector. In case of large manufacturing projects, the government will not assist, even partially, the industry to

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