Changes in Land Acquisition Act Hailed

  • The decision of the Union Cabinet on 29.12.2014 evening to take the ordinance route to bring amendments to the Land Acquisition Act has been welcomed by the Indian real estate sector.
  • The issue of Land acquisition has for long been the bugbear for industry as several infrastructure projects .
  • The large real estate development projects had come to a virtual standstill.
  • The draft ordinance envisages that projects in the field of defence, rural electrification, rural housing and industrial corridors would be exempted from seeking 80 per cent approval from affected persons as earlier required.
  • Farmers will continue to be compensated at four times the market rate for land in rural areas and twice the rate in urban areas.
  • Private hospitals, private educational institutions and private hotels arealso to be included in the definition of public purpose.
  • These would also be exempt from social impact studies which industry felt delayed project approvals.
  • Also 80 per cent of land owners affected in a sale will have to provide consent for land acquisition for a private project.
  • The ordinance will have to be cleared by the next parliamentary session commencing February 2015.
  • Industry felt the chronic delays with regard to approvals has been a major obstacle for projects and any pick up in infrastructure will have a beneficial ‘knock-on’ effect for the realty sector.
  • L. K. Jain, Chairman, Confederation of Real Estate Developers Associations of India (CREDAI) said  that infrastructure and realty projects in excess of $ 300 billion had been held up.
  • There has been a huge emphasis on infrastructure development by the government and any step to simplify procedures will have a beneficial impact for the real estate sector.
  • The Act which came into force on January 1, 2014 under the previous government was perceived to have put in place too stringent restrictions leading to large number of projects in areas such as railways, steel and roads being held up.