Land Acquisition Bill passed in Lok Sabha: Impact on Real Estate

The controversial Land Acquisition Bill was passed in Lok Sabha on March 10th, 2015, with as many as nine amendments made to the law enacted by the UPA government in 2013. Many of the amendments suggested were of utmost significance while others were controversial. The passage of the Bill witnessed unruly scenes with the walk-out of many opposition parties like the Congress, Samajwadi Party, Trinamool Congress and Biju Janatha Dal. However, the government would face a stiff task to get the Bill passed in Rajya Sabha where it lacks a majority.

Some of the important amendments that were brought about in the Bill are the following:

• Land acquisition can be carried out only for the industrial corridors proposed by the government. The ordinance brought about earlier had left a window of ambiguity so as to suggest the inclusion of projects by private players as well.
• The land acquired for the industrial corridor cannot exceed 1 km on either side of designated rail line or road.
• Compulsory employment for one member of the affected farm labourer’s family in the project coming up on the land that has been acquired from him.
• Courts can take cognizance of offense by a government employee; the ordinance had sought government sanction for prosecution of accused. This makes it easier for a government employee below the rank of Joint Secretary to be prosecuted.
• Complaints related to compensation can be redressed locally.
• “Social infrastructure” projects will exempted from the consent clause and social impact assessment; the 2013 law had proposed that land could be acquired for government projects and by private companies only after getting 80 per cent consent of farmers affected (this is 70 per cent in case of public-private partnerships).
• Drop in earlier proposal that required the government to acquire land for private educational institutions and hospitals.
• Removal of bottlenecks for industry acquisition of multi-cropped property.

Impact on Real Estate

The impact of the amendments in the Land Acquisition Bill is expected to streamline the process of land acquisition so that land thus acquired can be put to good use like in the development of industrial corridors along major highways and expressways. Besides, by curtailing the land that can be acquired for industrial corridors to within 1 km of designated railway lines or roads, the government also intends to protect the interests of farmers with land beyond this limit, besides providing employment to those farmers who are forced to part with their land. However, this amendment is likely to have an adverse impact on the Smart cities proposed to be developed along the DMIC (Delhi-Mumbai Industrial Corridor). The removal of the content clause will ease land acquisition restrictions thereby facilitating the smooth progress of infrastructure projects. The same is applicable with regards to acquiring of multi-cropped property. Hence the amendments proposed by the government are expected to benefit the real estate sector immensely.