New land acquisition act hampers infra projects

With industrialists and infrastructure project developers complaining about the increasing cost of land after the new land acquisition act came into force since January, pressure is mounting on the Centre to review certain provisions of law.

The Department of Industrial Policy and Promotion (DIPP) of the Ministry of Commerce and Ministry of Road Transport and Highways have already raised red flag over the law, while other ministries, like Railway, port and power are likely to follow soon.

Apart from increasing the cost of the land three-four times in rural areas and double in urban areas after the new law came into force, development of infrastructure projects like ports, highways or railways has been hit, a senior DIPP official told Deccan Herald. 

The Ministry of Road Transport and Highway had written to the Cabinet Secretary, asking for increase in budgetary allocation for land acquisition to build highways. The ministry also suggested that the government seek views from other ministries, including heavy industries and power, on how to address the issue.

The new land acquisition bill, known as the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, aimed to ensure owners get fair compensation for land taken from them for various projects.

As per the Act, land owners should get up to four times the market value in rural areas and twice that in urban areas.

“Though the Highway Ministry is exempt from implementing the law till January 2015, by next year it will be tough to meet the financial requirements to acquire land unless it gets additional budgetary allocation,” said a senior official from the ministry.  

The National Highway Authority of India (NHAI) on an average acquires around 6,000-7,000 hectares of land in a year, and distributes about Rs 7,000-Rs 8,000 crore as compensation.

DIPP secretary Amitabh Kant openly criticised the law, saying ever since it came into force, land acquisition for roads, ports and similar such activities has not been happening. Unless necessary amendments are enacted to certain provisions of the law, many infrastructure projects would suffer, he said, addressing an industrialists' meeting here.

DIPP sources said once a new government comes to power at the Centre after the Lok Sabha polls, it will take up the matter of amendment to put infrastructure projects on the fast track. Even industries body CII and FICCI also said they would raise the issues with the new government.