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Developers oppose ‘draconian' Land Acquisition Bill

Discussion in 'World Economy' started by Naren1987, Sep 11, 2011.

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  1. Naren1987

    Naren1987 Captain SENIOR MEMBER

    May 30, 2010
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    The National Land Acquisition and Rehabilitation & Resettlement Bill tabled in Parliament last week to update the century-old Land Acquisition laws, has proved to be contentious.

    As with any contentious issue, typically, there are disparate views and those in favour of the bill seeking interests of the landowner (farmer) have welcomed it while real estate developers have opposed it.

    While the bill does not prevent private developers from acquiring land from farmers directly after negotiations, if the size of the land being acquired is over 100 acres, then the developer will have to provide for rehabilitation and resettlement benefits. Also, land buyers are to pay land owners four times the market rate in rural areas and twice the market rate in urban areas.

    Pradeep Jain, President, Confederation of Real Estate Developers Associations of India (CREDAI), and Chairman, Kumar Urban Development, told this correspondent that “The government proposal to bring property deals in the private sector into the Land Acquisition Act is unfortunate because property changes hands after negotiations and as per satisfaction of the seller. This move will only increase the hardships and transactional costs for developers.

    “The government should have followed a consultative process and we have requested it for discussionsâ€.

    “The issue of rehabilitation of workers working on the land will lead to a lot of litigation and connivance and can delay the whole process. No doubt the landlord should get appropriate compensation but in the enthusiasm to do so, the process should not become litigious and tedious,†said Mr. Jain, adding that “If the impact of Land Acquisition and Resettlement and Rehabilitation (R&R) is calculated, it will increase the price of land 15 times and at those rates, any project will become unviableâ€.

    While terming the move as ‘draconian', Sunil Mantri, Chairman, Sunil Mantri Group, felt that it would impact several sectors and by bringing private negotiations for land under the government ambit, it would lead to several hurdles to buy land and increase procedural delays.

    Mr. Mantri pointed out that henceforth, ‘affordable housing' projects would cease to be affordable. Hitherto, land was a small component of any project cost but suddenly this could become a significant, if not most significant, cost of any project.

    Citing the example of the proposed Navi Mumbai airport, he said from paying Rs.10-20 lakh per acre for the proposed airport which will cover over 2000 hectares, developers would have to pay in the range of Rs.10-20 crore per acre. The original cost of the Navi Mumbai airport project, covering a total area of 2,020 hectares, was estimated at Rs.10,000 crore. “This could go up exponentially,†he said.

    However, Himadri Mayank, Senior Manager, Research and Real Estate Intelligence Service, Jones Lang LaSalle India, felt that the Bill intended to combine the process of land acquisition with the processes of rehabilitation and resettlement, “as both of them are inseparable in context. The draft bill intends to protect the interest of and adequately compensate both land-owners and those whose livelihood depends on the land being acquired.

    “While some of these initiatives and processes are indeed lengthy and time-consuming, the gradual changeover will become a crucial milestone in the country's history of giving its citizens inclusive rights and ownership over growth, participation and developmentâ€.

    The Hindu : Business News : Developers oppose
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