Column: Messiah or monster

Written by Sidharrth Shankar | Sidharrth Shankar | Updated: Aug 12 2013, 06:10am hrs
If the news reports are to be believed then it appears that the colonial-era Land Acquisition Act, 1894, will be replaced with the Land Acquisition Bill, 2011. The current monsoon session of Parliament is expected to take up this much-awaited Bill.

After the massive storms in Tatas Singur plant, Yamuna Expressway project and Greater Noida land acquisition, the need of the hour, especially for the corporate players, was an effectual and time-saving redressal arrangement for the disposal of cases concerning land disputes. It may be safely concluded that the cost of land is slated to rise pursuant to the passing of this Bill. The developers are likely to transfer the added tariff onto the consumers. For this reason, the housing prices are likely to go beyond the purchasing power of the customer.

Given below are some of the key features of the proposed Bill.

As per the Bill, the government can acquire the land only for public purposes. The Bill mandates an assent of 80% of the land owners before land can be acquired by private companies. Further, in the situation where the land is acquired for the purposes of projects carried out by public-private projects, it is imperative that 70% of the land owners agree to such a proposal. It has been evidently outlined that the consent would be attained along with the Social Impact Assessment (SIA) report.

To start off the exercise of land acquisition, the government will have to conclude SIA within 6 months pursuant to a discussion with the panchayats at the village level and at the municipality or the municipal corporation at the urban level. Furthermore, it notes that the Environmental Impact Assessment will also be conducted simultaneously along with SIA.

The next step will be the appraisal of SIA by an expert group, which will constitute of 2 representatives of panchayat or gram sabha (or the municipality); 2 experts on rehabilitations; a technical expert concerning the subject matter of the proposed project; and finally 2 non-official social scientists. The major objective of the expert group is to examine whether the project in question qualifies for any public purpose or not. Finally, a committee would be established by the government for the purposes of further review of the proposal. This committee would be required to evaluate the report of the expert group on the SIA study, verifying the above mentioned findings of the expert group.

Another key highlight of the Bill is the computation process. The market value of the land will be based on the higher of (1) market value specified in the Indian Stamp Act for the registration of sale deeds; or (2) average of the top 50% of all the sale deeds in the similar type of land situated in the vicinity; or (3) the amount agreed upon as compensation for acquisition of land for private companies or PPPs.

There is also the rehabilitation and resettlement policy that has been introduced in the Bill. Following the publication of preliminary acquisition, the government will appoint an officer not below the rank of joint collector or additional collector or deputy collector or equivalent official of revenue department to be the administrator for rehabilitation and resettlement (R&R). The administrator will carry a survey and finally formulate the R&R scheme. The report will be submitted to the collector, who is required to review the process and forward it to the R&R commissioner for the final approval. Once all these steps are duly completed, a declaration will be published by the government for the purposes of discernment of areas chosen for the implementation of R&R scheme. The administrator and commissioner are entrusted with the task of implementing the scheme.

Further, the Bill provides for setting up an R&R committee in certain cases which involves an acquisition of more than 100 acres. A National Monitoring Committee and State Monitoring Committees have also been proposed to be established at the respective levels.

Interestingly, even for the private purchases, R&R provisions are mandatory if the quantum of the privately purchased land exceeds the limit specified by the state government. It may be noted that the earlier draft of the Bill provided for a threshold limit of 100 acres in rural areas and 50 acres in urban areas. However, it was felt that this threshold may be circumvented by a private company by purchasing multiple parcels of land, each under the prescribed limit, through other entities.

The Bill now provides that that temporary acquisition of land by the government may be done for public purposes only and not for the use by a company as was contemplated in one of the earlier versions of the Bill.

Also, it may not be wrong to anticipate a rise in time and costs of the procedure of land acquisitions. Another cause of concern may sprout out of the provision requiring the return of land to the owner if it remains unutilised for 5 years. However, it may be observed that many a times the land is purchased by the state government en masse to implement a holistic policy framework.

In conclusion, we find that after much negotiation and debating the government has finally taken a strong unprecedented stance. It remains to be seen whether the proposed Bill is likely to affect the implementation of most of the real estate projects including housing projects and whether the Bill in the current form could lead to an increase in the cost of a project and also prolong the time required to implement the project. It will be interesting to see whether the proposed Bill in its current form turns out to be messiah or a monster for the corporate world and the state governments.

The author is a partner with J Sagar Associates.