Land bill shocks India Inc, will govt accept panel's proposals?

A Parliamentary panel has reject a key provision in the land acquisition bill allowing the government to acquire plots for private companies. The panel proposed tougher norms for acquiring land for industrial use, as it finalised the new Land Acquisition, Rehabilitation and Resettlement Bill.

The Standing Committee’s report, which insists that land acquisition by the government can only be done for infrastructure and social projects and not for private profit, has been slammed not only by India Inc but also by Rural development minister Jairam Ramesh.

Ramesh told Times of India, “The state will have to have a role in acquiring land (for private sector) but what that role is to be, can be discussed.” He added that the report will be studied and the bill willb e brought in the monsoon session of Parliament. " But everyone will agree that industrialization and urbanization are both desirable and inevitable," he said.

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Industry body CII said the suggestions would “adversely affect” the industry, especially the manufacturing sector.

“Unfortunately, rather than addressing concerns of the industry over the provisions of compensation and consent required for land acquisition, the recommendations of the Committee do not seem to be taking into account the need of the industry, thereby, leaving it to fend for itself,” CII President Adi Godrej said in a statement.

The bill is aimed at protecting farmers and landowners from exploitation. The report tabled in Lok Sabha on Thursday recommends that land can only be acquired for public purpose which includes highways, rail, power and irrigation. It also recommends that the government cannot acquire land for public-private partnership projects.

According to the report, industry will have to acquire land from the landowner on their own and the state governments will decide on compensation on the basis of population.

“All cases of land acquisition must entail obligations for adequate compensation, rehabilitation and resettlement to all land losers and other affected persons,” said the Parliamentary Standing Committee on Rural Development, chaired by BJP leader Sumitra Mahajan, in its report on the Bill tabled today.

Godrej said this would make the land acquisition more complex and difficult leading to slower growth in industry and therefore, the economy.

Assocham said the recommendations needed consultation with industry as their implementation would affect manufacturing zones the government plans to set up.

The revamped bill proposes that land cannot be acquired by the state for any profit-making enterprise. This virtually reverses the government’s plan to facilitate land acquisitions for industry and townships with better compensation.

Under the revised bill, private players and public-private partnerships would have to buy land in the open market if their ventures involve any element of profit. It would be up to the companies to win the consent of the landowners.

National Real Estate Development Council too opposed the Land Acquisition Bill saying it should not be applicable to private builders as it will impact development of infrastructure across the country. “Redefining public purpose, as suggest by Parliamentary committee, will impact infrastructure, industrial and township development severely,” National Real Estate Development Council (NAREDCO) Chairman Navin Raheja said in a statement.

“Provisions of LA and R&R Bill should not apply to private acquisitions done by developers after direct negotiation with land owners/farmers. Privately negotiated prices, in almost all cases, are much higher than acquisition compensation suggested in the bill,” Raheja said.

The proposal of 20 percent of developed land going back to owner in the Bill will make township development difficult, he added.

“Putting all land under agricultural cultivation in the same bracket as multi cropped land will make land acquisition for township more difficult,” Raheja said, adding the ceiling of 5 per cent on multi cropped land acquisition in a district is to follow if acquisitions for all purposes taken into consideration together.

Expressing similar views, Confederation of Real Estate Developer’s Associations of India NCR President Pankaj Bajaj said: “Today, all significant projects in the country are stuck due to land assembly issues. Industry needs government help. Whether it is China or any other competing economy, the government goes out of the way to facilitate industry.”

Agencies