ARE AMEND­MENTS THE WAY FOR­WARD?

Some pro­vi­sions of the Act have made land ac­qui­si­tion a cum­ber­some and ex­pen­sive process which could de­lay schemes like 100 smart ci­ties and Hous­ing For All by 2022

HT Estates - - FRONT PAGE - Van­dana Ram­nani Talk to us Would it be easy for the gov­ern­ment to de­velop 100 smart ci­ties?

Fi­nance min­is­ter Arun Jait­ley this week promised to go ahead with t he amend­ment of the Land Ac­qui­si­tion Act. The Right to Fair Com­pen­sa­tion, Re­set­tle­ment, Re­ha­bil­i­ta­tion and Trans­parency in Land Ac­qui­si­tion Bill 2013 was passed by the UPA gov­ern­ment and seeks to fix fair com­pen­sa­tion for farm­land be­ing taken over for in­dus­trial projects. How­ever, it has made land ac­qui­si­tion process dif fi­cult, which is im­pact­ing projects.

Real es­tate ex­perts and econ­o­mists are con­cerned that the Act in its present form will ad­versely im­pact both ur­ban­i­sa­tion and de­vel­op­ment. They be­lieve that the clause to seek con­sent of a majority of gram sabha or adult mem­bers of a vil- lage and the manda­tory so­cial im­pact as­sess­ment that aims to as­sess the so­cial costs of the project ver­sus its ben­e­fits will be a long-drawn process. Many are also crit­i­cal of the re­quire­ment of con­sent of at least 70% peo­ple for ac­qui­si­tion of land for pub­lic pri­vate part­ner­ship projects and 80% for ac­quir­ing land for pri­vate com­pa­nies.

Such strin­gent mea­sures can pose prob­lems for re­al­is­ing am­bi­tious projects such as the two mega in­fra­struc­ture projects — the Delhi Mumbai In­dus­trial Cor­ri­dor and Mumbai Chen­nai In­dus­trial Cor­ri­dor. It is likely to pose a chal­lenge to de­vel­op­ment of a 100 smart ci­ties for which 7,060 crore has been al­lo­cated .

Prime Min­is­ter Naren­dra Modi’s Make in In­dia cam­paign to re­vive man­u­fac­tur­ing also re­quires free flow of raw ma­te­ri­als, im­prov­ing lo­gis­tics in­fra­struc­ture such as port to in­land con­nec­tiv­ity, cargo air­ports etc. The Act also calls for an ad­di­tional com­pen­sa­tion to the af­fected fam­i­lies for their re­ha­bil­i­ta­tion and re­set­tle­ment. Com­pa­nies are also ex­pected to em­ploy those who are from dis­placed fam­i­lies.

Ac­cord­ing to Neeraj Bansal, part­ner and head, real es­tate and con­struc­tion, KPMG in In­dia, the new LARR ( Land Ac­qui­si­tion Re­ha­bil­i­ta­tion and Re­set­tle­ment) Act, 2013, — which re­placed the ar­chaic Land Ac­qui­si­tion Act, 1894 — seeks to bal­ance out the in­ter­ests of the land own­ers; project af­fected fam­i­lies; and the ac­quir­ers. How­ever, cer­tain pro­vi­sions of the Act have made land ac­qui­si­tion process an un­wieldy, cum­ber­some ex­er­cise and sig­nif­i­cantly in­creased ac­qui­si­tion cost which may neg­a­tively af­fect the vi­a­bil­ity of large in­fra­struc­ture, town­ships and SEZ projects. Slow de­vel­op­ment of in­fra­struc­ture in the coun­try could de­lay ma­jor gov­ern­ment projects such as 100 smart ci­ties and Hous­ing For All by 2022.

To meet the grow­ing re­quire­ments of ur­ban­i­sa­tion and af­ford­able hous­ing in the coun­try, large tract of land parcels have to be made avail­able on time and at ap­pro­pri­ate pric­ing to en­able de­vel­op­ment of af­ford­able ur­ban in­fra­struc­ture and hous­ing. The LARR Act, 2013, pro­vi­sions in the cur­rent form re­strict the abil­ity of the gover nment/ de­vel­op­ers to ex­pe­dite ac­qui­si­tion of large land parcels at op­ti­mum cost, thereby re­sult­ing in pres­sure on ex­ist­ing avail­able land and in­di­rectly im­pact­ing pric­ing as well, Bansal adds.

“The cost of ac­qui­si­tion of land may in­crease, given the higher com­pen­sa­tion mul­ti­ple in­di­cated in the new Act. How­ever, much will de­pend on the way in which the smart city con­cept will be for­mu­lated and the con­se­quent role to be played by the Cen­tre and state gov­ern­ments. Per­mit­ting higher floor space in­dex (FSI) in or­der to op­ti­mise land re­quire­ments, con­sid­er­ing al­ter­na­tive land lo­ca­tions, pro­vid­ing ben­e­fits like share of de­vel­oped area to landown­ers could be some vari­ables which could op­ti­mise the over­all land ac­qui­si­tion cost,” says Shee­tal Sharad, as­sis­tant vice pres­i­dent, ICRA Limited.

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