The realty space is caught in quite a catch-22 situation. The new Land Acquisition and Rehabilitation Bill coming into force is expected to increase cost for real estate developers by an estimated 80%. The players will now have to either pass on the cost to customers or take a hit in margins. Now, of they do hike land price, they might end up wrecking the already measly sales the industry is seeing.
Run over by all these concerns, DLF was beheaded at the stock market yesterday, the price tumbling more than 7%. The company is just reviving from the blow it took from the CCI penalty, when the land bill has hit it.
Rajeev Talwar, group executive director of DLF joins CNBC-TV18 to discuss the impact of the bill on the company.
Below is the edited transcript of the interview. Also watch the accompanying video.
Q: Just take us through what you are expecting from the bill to be tabled as opposed to draft?
A: I think the bill which is being tabled would probably be the same as the draft. What has been cleared by the cabinet would be definitely tabled. But yes, we expect that during the discussions, either in the parliament or in the standing committee, they would like to distinguish between the pure private sector willing-seller, willing-buyer transactions and those transactions in which the government has any role to play in any partial or complete manner in land acquisition.
Basically, all these transactions which do take place are only as a help to the government substituting the very role which the government plays normally in land acquisition. So we are quite hopeful that there will be some changes to make to lesser the burden on the government machinery and also to see that no malpractices are set in.
Q: What are you expecting to hear and what will make you happy in terms of the coverage for private players in the bill?
A: Private companies transacting direct land transactions with owners on a willing voluntary basis, because market determine rate, those should be kept out of the purview of the bill. There should be no conditions imposed on them. That