Recap on the Land Acquisition Bill
Jan 03, 2014
Source : The Times of India


MUMBAI: The much awaited and discussed among stakeholders of the Indian real estate industry, the Land Acquisition Bill, is going to be effective from the very first day of the year 2014. This bill will replace the old Land Acquisition Act, 1894 and is expected to remove hurdles that the industry has been confronted for a long time. Let us have a quick recap of the Bill before discussions, execution and affects start:

This bill incorporates rehabilitation and relief to the marginal land sellers and this process was initiated by the government almost a decade ago. The Bill tries to ensure sufficient compensation to the marginal sellers.

Another point that has been incorporated into the bill is that the land can be acquired for projects under Public Private Partnerships (PPP), government and private purposes. For any project under PPP or private purpose, the state has to carry out assessment of the social as well as environmental impacts of the proposed project. These assessments are focused on ensuring that the marginal sellers are not affected badly in any way.

Additionally, any private entity buying land must get the consent of eighty per cent of the families whose lands are being acquired. However, for PPP projects this limit is seventy per cent.

During all these processes of assessments and getting consent from marginal sellers in order to acquire land for PPP and private projects, the buying entity also needs to ensure that the state government’s approval of payment is made to the sellers and compliances to relief and rehabilitation obligations are fulfilled.

The Bill itself describes the compensation structure required to be given to the influenced family which incorporates laborers and farm laborers, inhabitants, tenants and specialists in the zone for three years before obtaining the land. The remuneration might be Rs 5 lakh or employment. Additionally, an allowance of Rs 3,000 per month needs to be given for a period of one year and a sum of Rs 1.25 lakh must be given to each family.

Another provision of the Bill states that if the compensation is not given to the marginal sellers till five years of the acquisition, the process shall be begun once again. To resolve any dispute in this acquiring process and rehabilitation, an authority has to be established.

The Bill also allows land buyers to get the land on lease rather than buying it. This decision will be of the marginal sellers and the concerned states only. Buyers can seek or demand it.

Now, it is clear that such a hectic, tardy and burdensome acquiring process is going to shoot-up project costs many times. If a developer wants to buy a land for its projects under-planning, it has to start the acquiring process three years prior. The next hurdle is the assessment of the project for environmental and social impacts. Above all, providing burdensome relief to the marginal sellers if not met, the process would restart again. All such provisions make the projects costlier and delayed which was already there and the efforts should have been to curb that.

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