Land Acquisition Bill Approved by Cabinet
India Inc balks at Land Acquisition Bill
Agencies
Posted: Friday, Sep 23, 2011 at 0928 hrs IST
Mumbai: Unfinished car shells rusting in a deserted factory in India's West Bengal state lie testimony to flaws in a century-old land-acquisition law the government now wants to replace.
* Jobs, housing, cash to landowners made mandatory
* Costs, project delays to increase – Indian corporates react
* Bill to push up costs by 350 pct for big plots – analysts, cos
* Bill likely to be passed in December
Tata Motors was forced to abandon its Nano plant in 2008 after violent protests by villagers, who claimed they were forced off the land by the local government and paid inadequate compensation.
But companies say an overhaul of the old law envisaged to bring clarity to an often murky part of doing business in India goes too far in favour of rural landowners and will slow development, capacity expansion and economic growth.
The proposed new land bill means cost increases and project delays for developers, thanks to rules that will raise land values and compel them to provide new homes, jobs, monthly stipends and a cut of future profits to former landowners.
This just isn't going to work for buyers, said Rupen P. Patel, managing director of Patel Engineering , an infrastructure firm specialising in power and road projects.