Friday, August 30, 2013

Land Bill: India Inc wary of rising costs; but welcomes aim

Aug 29, 2013, 10.33 (7star news):-As voting for the Land Acquisition, Rehabilitation and Resettlement Bill, 2011 gets underway in the Lok Sabha, India Inc expresses mixed reactions to the proposal. Some industrialists feel that this will throttle industrial growth in the country, expressing reservations against crucial clauses in the document, yet some others also welcomed the overall intentions of the Bill. While they foresee lesser delays in acquiring land for development, project costs may also see a surge going forward.

Also read: Here is why India Inc is miffed by Land Acquisition Bill

Vinayak Chatterjee, chairman of Feedback Infrastructure believes that the Bill is a much needed reform and needs to be looked from a broader perspective. However, some implementation aspects of it will require restructuring, he told CNBC-TV18.

Venugopal Dhoot of Videocon Industries is also positive about the Bill and its retrospective effect as stalled projects could see a silver lining if it is passed. The Bill is also good for farmers and landowners as it largely favours them, while the industry should be happy on lesser hurdles to projects.

The Bill includes a clause where the compensation to the landowner is four times the market value in rural areas and double in urban areas. Also, consent from 80 percent of displaced people will be required to acquire a chunk of land.

However, Niranjan Hiranandani, managing director of Hiranandani Group of Companies strongly criticised the Bill in its current form. He says that cost of affordable housing will see a spike of 20-25 percent. The state government will also have problems as land acquisition costs will shoot up. As a result, a lot of industrialists will look to invest overseas, Hiranandani affirms.

Ajit Mittal, group ED of Indiabulls group echoed Hiranandani's views on rising housing costs. He felt that not only will cost of housing in India will substantially go up, but industrial projects will become financially unviable in some cases. He is also worried about implementation of the resettlement and the rehabilitation (R&R) clause, which calls for provisioning for land, housing, employment and annuities above a certain threshold of acquisition.
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