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Indian Stock Market News, Equity Market and Sensex Today in India | Equitymaster
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India Inc disappointed with Land Bill 
(Mon, 2 Sep Pre-Open) 
 
Project execution in India is identified as anything but a smooth process. Amongst the many issues that crop up over time include the delay in receiving the green signal from the government or either the unwillingness of the landowners to part with their properties.

With the proposed Land Acquisition Bill, the aim would be to ultimately make the process simpler and smoother.

While the bill may have made the process simple it turns out that it has not gone down well with the corporate world. Why? Because it increases the costs of setting up facilities substantially! Given the conditions of the bill, companies' cost would move up by about three times as per certain estimates. It is reported that the companies would be required to make a payment of about 4 times the market prices in rural areas to compensate the landowners for the price increases that occur in the area post the development of projects. In urban areas, the requirement would be to pay two times the market price.

Secondly, depending on the type of organisation - private or public - it would be required to get as much as 70-80% consent of the land owners whose land is being acquired. That in itself would be a task. Over and above that, the bill requires the companies to make adequate provisions for the affected people including payments for their rehabilitation and resettlement as well as either a job or annual payments (adjusted for inflation) for up to two decades.

While the intent of the bill may be right, we believe that it does seem to be a bit too harsh. Especially at a time when the sentiments are anything but positive, such an announcement would do nothing to boost investments. Or worse, curtail them!

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