Ashutosh Limaye, Head of Research at Jones Lang LaSalle India, discussed the proposed Land Acquisition and Rehabilitation & Resettlement Bill (LARR) 2011.
Residential Real Estate Development:
Mr. Limaye said that Land acquisition cost may not go up, since most transactions are done at market price, which is higher than the prescribed formula (using guidance rate, which could be a lot lower than market price).
According to JLL, there appears to be ambiguity regarding developers' ability to buy land parcels >50/100 acres in urban/rural areas without invoking difficult RR [Rehabilitation & Resettlement] provisions.
This appears contrary to general belief that larger land parcels will invoke RR provisions, making longer-term value creation difficult. If RR provisions are invoked, the Bill will be non-conforming to the township policies of the state government, which provides incentives for 100+ acre land developments.
Infrastructure / Industrial Development:
The land required for these projects will most likely become expensive. Most of these projects will require large tracts of land and government help in land acquisition, invoking both LA and RR provisions.
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