Business Today, June 3 2014: “The Right to Fair Compensation and Transparency in Rehabilitation and Resettlement Act 2013 commonly referred to as the Land Acquisition Act is a move into the right direction. According to the new Act, state governments will have to set up at least six bodies, including the state-level Land Acquisition Rehabilitation and Resettlement Authority, to hear disputes arising out of projects where land acquisition has been initiated by the state or its agencies.
Further, as per the rules of the Act, the state governments will take immediate steps to create and establish the State Social Impact Assessment Unit, the office of the Commissioner Rehabilitation and Resettlement, and the State Level Monitoring Committee. It paves way for further reforms on the matter of land acquisition. While the Act has been notified, it still needs amendments in several areas. The salient feature of the Act says that private developers acquiring land for projects will need the consent of up to 80 per cent of people whose land is acquired for private projects and of 70 per cent of the landowners in the case of public-private partnership projects. It also provides for compensation as high as four times of the in rural areas and two times in urban areas. This clause in particular would impact the calculation of the overall project and will eventually impact property pricing.
Due to the proposed calculations set to reach the final value, the total cost of land acquisition is bound to go up for all projects, irrespective of them being government or private or public private partnership (PPP) projects. Moreover, the consent clause will also add to the delay of projects. The clause of mandatory consent of 80 per cent of owners for private projects and consent of 70 per cent landowners for PPP projects will delay the process of land acquisition and the projects in turn. A country which is already battling problems of policy impediments and regulatory bottlenecks at the time of project approvals might not get enough support from the new Act.
The BJP manifesto also says that the new government will focus on creation of affordable housing, which is the need considering we have a housing shortage of 18 million and land availability is an issue. The new Act is significant in creation of the new cities, as the mammoth task requires more land. The new Act requires further amendment and clarity on provisions and clauses. For example, while the Act will form bodies at the state level, monitoring will be a key issue. How will the process run at the state level is unclear.
Also, how will be the values be calculated is a big concern. In the current format, chances are that valuations may be calculated incorrectly. Moreover, to calculate the correct value of land for further transaction, there is need for professional and trained valuers. Our country has a shortage of qualified professionals in this field. The biggest challenge for the new government would be to bring the necessary amendments to the Act. Also, while the implementation will be a huge task, tackling a number of litigations in the way of land acquisition for government infrastructure projects will be an impediment.”