India Inc has generally welcomed the Land Acquisition Bill cleared by the Cabinet on Monday and endorsed its objective of ensuring reasonable compensation to land owners who sell their land to the industry. But corporates have also expressed concern over the likely burden of procedures and the high cost of the relief and rehabilitation (R&R) policy which could finally lie on the industry.

The Confederation of Indian Industry (CII) welcomed the fact that R&R is being dealt with comprehensively in a single piece of legislation, and the fact that ?implicitly? the government has said that beyond a reasonable threshold, land acquisition for public purpose would be done by the government. However, the industry chamber voiced its concern about the cost of R&R that would be loaded on industry and the solatium ratios that are spelt out. ?While CII is absolutely in favour of appropriate and adequate compensation for people who are affected by land acquisition, we believe that the costs have to be reasonable for industry to remain viable,? it said in a statement.

Ficci also welcomed the Bill. ?We welcome the Bill as it allows companies to acquire land directly from the land owner and has streamlined the land acquisition process. However, it may be applicable on a retrospective basis and not prospective basis due to which all industries in the process of taking land may have to rework their financial model,? the industry body said.

The industry has also voiced its concern on the burdensome provisions of the Bill which may lead to an increase in cost of housing and general expenses.

Infrastructure company Lanco though doesn?t find the Bill a burden, it said that tribal areas may face some problems because of this. ?For us, land is only 1-2% of the overall project cost. So, it will not be load on us. Policies are much transparent now but there are certain pockets in tribal and left wing extremism affected areas where the problem is of exploitation and it might be difficult to convince them,? said a senior Lanco official.

?There is no flexibility in terms of the compensation package. Moreover, the 5% cap on the multicrop land is as good as no because 5% is nothing when infrastructure development is concerned,? the Ficci official added.

As for the consent of 80% of the people, the industry is asking why should they go back to the government and is asking for a drop in the number to 50-60%.

Niranjan Hiranandani, founder and managing director, Hiranandani Constructions said: ?While the Bill was necessary because the farmers have felt in the past that they were not adequately compensated for the land acquired from them. The process for government acquisitions is fine but norms for private acquisition need a re-look. For example, it has been said that if I purchased say 100 acre of land but utilise only 80 acre, the remaining 20 acre needs to be returned back to the land owner. This will not be good as not everything is utilised in one go and is kept for future expansion of the business. Whereas in the case of government acqusition, it can be utilised for some other development by them.?

Paras Gundecha, president, Maharashtra Chamber of Housing Industry: ?It will not be pro-industry. Who will buy land if he has to pay six times the determined market value. It is going to be completely unaffordable to buy large tracts of land?. ?It is not pro-industry. There will be lot of issues on prima facie,? said a senior official from a leading power company.

Meanwhile, official sources said that during Monday?s one-and-half hour Cabinet meeting, while all the ministers agreed for a need to have comprehensive legislation to govern land purchase in the country, Prime Minister Manmohan Singh stated that ?we need the Bill, but also need economic growth with speedy industrialisation and urbanisation.?

Singh also decided to refer the National Land Acquisition and Rehabilitation and Resettlement Bill, 2011 to National Development Council where respective chief ministers would express their views on the contentious issue. The NDC is slated to be held during October 15-16.

Rural development minister Jairam Ramesh while called the Bill as ?historic?, on Monday said the Bill ?brings about balance between the objective of faster industrialisation and the need to protect land owners and livelihood losers?.

The Bill slated to be introduced in Parliament on Wednesday also specifies timelines for the payment of compensation. The compensation has to be paid within three months of the award, the other monetary compensations within six months and the infrastructure entitlements under the R&R package within 18 months. Penalties will be levied on violation.