Thursday, 26 May 2016

Land Acquisition Bill- Boon or Bane for Realty Sector?

For regulating the process of land acquisition, Indian government has been in the process of passage of the LandAcquisition Act, 2013, which stipulates rules for granting compensation, rehabilitation and resettlement to the affected people in India. With the intention of bringing transparency to the process of acquisition of land for setting up buildings or factories, infrastructural projects etc., the act promises fair compensation to the affected persons. The scope of this Act extends to all land acquisition done by central government and state governments, except in the state of Jammu & Kashmir.

The multi-folded objectives of the Act include ensuring a participative and transparent process of land acquisition for developmental activities in consultation with local bodies, providing just and fair compensation to the affected families,  making sufficient facilities for their rehabilitation and resettlement, and ensuring that the affected persons to be the partners in development. The Act authorises the government to acquire land for its own use, hold and control, and to transfer it to private companies for public purpose. However, the Act restricts any acquisition of multi-crop irrigated area. In case of any acquisition of such area, the state is liable to develop an equivalent area of cultivable wasteland for agricultural purposes.

This had a bad impact on the sectors like power and infrastructure. In the age of rising population and rapid urbanisation and industrialisation, it stayed as a question mark in front of such sectors. As infrastructure is termed as the driver of development, the act came as an earthquake in this sector, resulting in the slip down of stock market.

Flats in Zirakpur, Punjab

In 2015, the Act was thrown into controversy, when it was amended to address industry concerns by diluting the vigour of some of the provisions of 2013 Act. The social impact assessment and consent requirement were done away for some specified sectors including infrastructure projects. This has been made for developing a robust infrastructure like roads, airports and residential projects in India. The amended version enables companies stuck in land acquisition by making the process easier. Moreover, no cap on the area of multi-crop fertile agricultural land is mentioned; it enables private hospitals and private educational institutions for land acquisition. Being criticised as anti-farmer and pro-corporate, the government had to finally leave the ordinance route, and travel along a democratic path. Due to severe opposition, government is thinking of reviewing the amendments. 

The latest genre will affect the realty sector in India positively by making the land acquisition process easier for the development of industrial areas and major highway and expressways. Confederation of Real Estate Developers Association of India (CREDA) has assessed that in the amended form, the proposed Bill can help farmers without impacting or affecting the realty sector, if handled in the right perspective and manner. 

Understanding the need of making land available for the Housing For All programme by 2020, Modi government is pitching forward for the passage of the legislation. The debate goes on until the Bill would be settled by satisfying all the stakeholders. As a democratic government, pro-poor and pro-farmer policies have to be taken, keeping in view the larger spectrum of national development.

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