Land Acquisition Bill will Make Non-Government Acquistions Expensive

The new proposed land acquisition bill, in our view, makes private land acquisition far more difficult to achieve than it already is. Land, under the proposed legislation, can be acquired by the state only for public purposes (highways, etc) and not for any "for profit” enterprise including any PPP project, thus leaving the private sector to fend for itself.

The matter will likely be debated by the parliament before it becomes a law. Nonetheless, even on a "watered down" basis, land prices will likely increase as a result.

The standing committee, in its review of last year' proposed land bill, has rejected a key provision of allowing the government to acquire plots for private companies.

Given that land is also a state subject, in a Federal structure such as India, a lot of “progressive” states are likely to bring in their own land acquisition acts, which the respective governments may think is more progressive than the Central act in order to aid industry and job creation. These provisions thus additionally may temper down the potential impact of the central act.

Land aggregation and conversion was one of the most complicated part of any industrial activity in the best of times and post this bill becomes potentially even more difficult.