 "Land acquisition Act needs to be junked: Gulabchand")
The Centre should scrap the land acquisition Act introduced by the United Progressive Alliance (UPA) government last year and replace it with a new law so that large projects related to roads, ports and airports aren't delayed for years, says Ajit Gulabchand, chairman of infrastructure firm HCC.
"The new land acquisition Act has not only increased the cost of acquisition…it is so complex that it is not workable. If a company goes to acquire land according to the Act, it will take at least 56 months to meet all the conditions. Besides, litigation can be started by a land owner at any step. And, after all this is done, the company is still married to the seller of land for the next 10 years," Gulabchand told Business Standard.
Industry has criticised the Act, which virtually blocks any land acquisition by companies and increases the cost of projects substantially. The law makes it mandatory to pay landowners at least twice the market price for land acquired in urban areas, and four times the market price in rural areas. The cost of land acquired will also depend on the number of families displaced.
Apart from Gulabchand, chiefs of other big infrastructure companies such as L&T Group Executive Chairman A M Naik, too, have expressed concern about the Act.
Gulabchand says Budget 2014-15, scheduled to be presented nest week, should give a positive and clear direction on economic reforms and indicate where the country's economy is headed. He adds the Budget should also announce big-ticket and game-changing ideas. "The UPA government has created a lot of mess in the last four years, including the faulty Companies Act, environment terrorism and tax terrorism…we have to give some time to the new government to clear the mess," he says.
Gulabchand, who has taken the environment ministry to court for stalling his pet Lavasa project for three years on environmental grounds, says it is time to reform the ministry, which should have clear, objective and measurable standards.
He says the country should create 15 million jobs every year, or about 300 million jobs in 20 years. "The new jobs will be created only when investment takes place; so far, investment wasn't coming, as the investment climate wasn't favourable. There was unpredictability. Now, things should change for the better," he says.
"There is a real possibility that all the problems plaguing growth and investment will go. Prime Minister Narendra Modi's philosophy and his outlook towards economy is in contrast to what the UPA did and stood for. There is a good chance things will change and so, there is optimism in the air. Though the problems have still not gone, I think the promises made by the NDA (National Democratic Alliance) will be kept," he added.
"The new land acquisition Act has not only increased the cost of acquisition…it is so complex that it is not workable. If a company goes to acquire land according to the Act, it will take at least 56 months to meet all the conditions. Besides, litigation can be started by a land owner at any step. And, after all this is done, the company is still married to the seller of land for the next 10 years," Gulabchand told Business Standard.
Industry has criticised the Act, which virtually blocks any land acquisition by companies and increases the cost of projects substantially. The law makes it mandatory to pay landowners at least twice the market price for land acquired in urban areas, and four times the market price in rural areas. The cost of land acquired will also depend on the number of families displaced.
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Industry expects the Act will lead to a threefold rise in relief and rehabilitation (R&R) entitlements. As a result, many large projects have come to a halt, while costs of projects such as the Navi Mumbai airport here have risen by Rs 5,000 crore.
Apart from Gulabchand, chiefs of other big infrastructure companies such as L&T Group Executive Chairman A M Naik, too, have expressed concern about the Act.
Gulabchand says Budget 2014-15, scheduled to be presented nest week, should give a positive and clear direction on economic reforms and indicate where the country's economy is headed. He adds the Budget should also announce big-ticket and game-changing ideas. "The UPA government has created a lot of mess in the last four years, including the faulty Companies Act, environment terrorism and tax terrorism…we have to give some time to the new government to clear the mess," he says.
Gulabchand, who has taken the environment ministry to court for stalling his pet Lavasa project for three years on environmental grounds, says it is time to reform the ministry, which should have clear, objective and measurable standards.
He says the country should create 15 million jobs every year, or about 300 million jobs in 20 years. "The new jobs will be created only when investment takes place; so far, investment wasn't coming, as the investment climate wasn't favourable. There was unpredictability. Now, things should change for the better," he says.
"There is a real possibility that all the problems plaguing growth and investment will go. Prime Minister Narendra Modi's philosophy and his outlook towards economy is in contrast to what the UPA did and stood for. There is a good chance things will change and so, there is optimism in the air. Though the problems have still not gone, I think the promises made by the NDA (National Democratic Alliance) will be kept," he added.