New land law a setback to $1 trillion infra target: Experts
Mumbai: Criticising the new land law, experts and analysts have said it is body blow to the ambitious USD 1 trillion investment target for the infra sector during the 12th Plan as the new rules envisage high compensation and near-total consent from affected parties to acquire land.
The Land Acquisition Bill was passed by the Lok Sabha with overwhelming majority last week.
"Infrastructure projects will receive the sharpest blow due to the new land bill as the rise in input costs is likely to make them unviable. Infrastructure projects are already under pressure, so the private sector is not interested in them.
"Economic growth is largely dependent on infrastructure development which the government cannot take up single handedly and the private sector cooperation is necessary," Cushman & Wakefield Executive Managing Director for South Asia Sanjay Dutt said.
The Land Acquisition Bill, which will replace decades-old Land Acquisition Act of 1894, has set out clearly the compensation to be paid for land acquisition.
Developers are required to get the consent of up to 80 percent of people whose land is to be acquired for private projects, and 70 percent of affected people for public-private partnership (PPP) projects.
"The consent clause will delay the start of the project further making the required returns from the project difficult to achieve," Dutt said.
According to HCC group Chief Operating Officer Rajgopal Nogja, the Bill would lead to further holding up of the infrastructure development where many projects are already languishing due to the failure of authorities to acquire the necessary land for development.
"The linear and multiple process norms will make land acquisition difficult and may result into even dropping of development idea itself in some cases. The bill will add to all-round escalation in the cost of projects and would have cascading effect on the future of development in the country," he said.
Terming these as unfavourable conditions, experts said the USD 1 trillion investment target during 12th Plan may not be achieved.