Business Standard

Industry bodies balk at higher rehabilitation and resettlement in new law

Image

BS Reporter New Delhi

Even as the Union Cabinet cleared the new Land Acquisition Bill in a diluted form, industry associations on Tuesday complained it would both cut their business and economic growth, while leading to litigation. And, warned it would mean expensive housing for the middle class.

Their complaints are focused on the rehabilitation and resettlement (R&R) provisions. The Bill calls for compensation costs to land owners and shares in any further transactions in the land. Also, it mandates the developers to offer other benefits to the original owners. However, it has cut compensation to land owners to four times the prevailing market rate from six times proposed in the draft bill.

 

With plans to approach the standing committee which would scrutinise the Bill after it is tabled in Parliament, the Confederation of Real Estate Developers’ Associations of India (Credai) has termed the provisions an “extreme step”.

Lalit K Jain, president of Credai, said, “It is an extreme step that the government has taken, which completely goes in favour of the landlord. This would lead to a spurt in litigation and cost escalation and growth would move to the backburner.”

On rehabilitation, Jain said, “People who do not work on the farm might make false claims, leading to blackmailing and exploitation.”

The Confederation of Indian Industry (CII) said it welcomed R&R being dealt with land acquisition in the same piece of legislation. However, it said, “While CII is absolutely in favour of appropriate and adequate compensation for people affected by land acquisition, we believe the costs have to be reasonable for industry to remain viable.”

Others said higher land acquisition costs would mean a surge in housing prices. “The interests of farmers are protected but the affordable housing requirements of the middle class have been completely ignored, as the land (acquisition) cost will go up by 60-80 per cent,” said Associated Chambers of Commerce and Industry of India’s secretary general, D S Rawat.

He said the Bill was heavily in favour of land owners and did not have a win-win formula for both parties.

The Federation of Indian Chambers of Commerce and Industry also said the R&R provisions were stringent and burdensome, though it appreciated the replacing of an archaic law and allowing private companies to acquire land.

Don't miss the most important news and views of the day. Get them on our Telegram channel

First Published: Sep 07 2011 | 1:07 AM IST

Explore News