The long-pending Land Acquisition Bill may finally see the light of the day as all political parties reached a consensus on most issues on April 18. It was expected to be tabled in Parliament but the second Budget session was adjourned mid-way.
So, what is Land Acquisition Bill?
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- The Bill proposes the payment of compensation that is upto four times the market value in rural areas and two times the market value in urban areas.
- It seeks to compensate 50 percent to the original farmers whose land has been purchased after the introduction of the Bill in Lok Sabha in September 5, 2011.
- Instead of acquisition, land could be leased to developers so that its ownership will remain with the farmers and would provide them with regular annual income.
- The Bill seeks to address problems of industry regarding acquisition of land for setting up projects. It provides for land acquisition, rehabilitation and resettlement of the displaced people and proposes to replace the Land Acquisition Act, 1894.
- The government agreed to amend the Bill to provide for an enabling provision for states to enact laws in this regard as leasing of land is a state subject.
- It stipulates that consent of 80 percent of the people are required for acquiring land for private industry.
- The Centre is likely to insert a provision that if government acquires land that changed hands after September 5, the compensation would be divided equally between the current landowner and the one prior to cutoff date.
Impact on real estate prices and volumes
- Developers say cost of land will go up by 60-80 percent because of the compensation clause. This will lead to increase in property prices, thus impacting demand.
- This wiill make it very difficult for the industry to be viable.
- If Bill gets passed, developers will also hesitate to go in for big projects.
- High consent rates will make acquisitions very difficult.
- According to the provisions, 80 percent of the displaced people would have to give their consent in case of private acquisitions, while in case of government and public-private partnership projects, this number stands at 70 percent.
- Confederation of Real Estate Developers' Associations of India (Credai) says developers should be kept out of the ambit of the bill and should be applicable only to govt bodies.