The Confederation of Real Estate Developers Association of India (Credai) has expressed concern on some of the provisions of the draft National Land Acquisition and Rehabilitation & Resettlement Bill, 2011.
Reacting to reports of the Cabinet approval accorded to the Bill earlier today, the real estate developers' organisation reiterated its concerns on the provisions relating to the valuation of land and bringing private acquisition of land under the ambit of this law.
Mr Lalit Kumar Jain, National President, Credai, said the proposed law is a ‘huge setback' for industrial development and urbanisation.
Private developers
Bringing private acquisition of land under the ambit of this law which covers rehabilitation and resettlement is ‘disastrous' and creates opportunity for more legal complication.
For instance, private developers who purchase land for development after negotiations with land owners to mutual satisfaction simply cannot afford the provisions of rehabilitation and annuity. This provision only creates permanent land encumbrance and enable unlimited claims that will make township development unviable.
Simply ruling out agriculture land from development is also unviable in terms of industrialisation and urbanisation. Both these happen only as an expansion of developed areas and in river basins. The Government should look at creating irrigation infrastructure to expand agriculture land. It should abandon its populist, please-all approach for more pragmatic policies, Mr Jain said.
Mr Prakash Challa, Managing Director, SSPDL Ltd and Chairman, Finance and Taxation Committee, Credai, said the proposed law in its present form will result in escalation of land costs. It also provides a window for the influential to manipulate land availability by ‘unhealthy cornering of land' by a few.
While Credai is for providing adequate compensation and protecting the livelihood of the land owners, the Bill does not adequately address the valuation of land. Simply providing for multiple times the market value as compensation will only contribute to driving up prices. While the Bill provides for land acquisition for public good, driving up land cost will have an adverse impact in the long run, he said.
Reacting to the Cabinet decision, the Chairman-cum-Managing Director of Raheja Developers, Mr Navin M. Raheja, apprehended that the formulae proposed in the draft Bill would increase the cost of projects.
Mr Raheja, who is also the Chairman of the Real Estate Committee of industry chamber, Assocham, felt that this could also lead to a lot of speculation by investors. Industry chamber FICCI did not seem to be happy either with the broad contours of the Bill. The main concern is implementation of the proposed Act from retrospective affect, it said. It is going to be a big issue as many existing projects will have to spend a big amount on rehabilitation and resettlement, the chamber added.
Mr Niranjan Hiranandani, Chairman, Hiranandani Group, said now the pendulum had swung to the other end.
“I think certain aspects will be considered by the Parliament,” he felt.
There is concern over the issue of government getting into acquisition mode even in private acquisition. Similarly, relief and rehabilitation measures called for beyond 100 acres acquisitions were difficult as it was not assessable in any project such as the number of farm labour who had worked.
(With inputs from Chennai, Delhi and Mumbai)