Confederation of Real Estate Developers’ Association of India (CREDAI) has opposed the proposed Land Acquisition and Rehabilitation & Resettlement (R&R) Bill, and said with proposed R&R to the farmers the construction industry would become an unviable proposition.
CREDAI criticised various provisions of the Bill in a presentation before the standing committee of Parliament. The association said that the provision of R&R for a private project above 50 acres would severely restrict the supply of land for organised housing.
It said urbanisation is an uncontrolled force. “If we do not facilitate it in an organised manner, all the incremental population will be housed in slums with dire consequences for our economy,” the presentation said, sounding a caveat that housing prices would become even more unaffordable.
In the long run, even farmers whom this bill seeks to protect, the presentation said, will suffer hugely as development of the fringes of urban centres would largely be in the form of unauthorised development and the farmers would then not realise the true economic potential of their lands.
Therefore, the presentation suggested that the Government should do away with the numerous onerous and artificial impediments placed in the way of free commercial transactions, as these would be harmful to the economy.
The presentation said that the compensation package envisaged by the Bill lacks proper assessment and research. Increase in the compensation package would have direct bearing on the final cost to the ultimate customer, as the burden would be shifted on the end user. In case of increased prices, CREDAI said, a wide gap would be created in supply and demand.
The Land Acquisition Act of 1894 provided for a solatium of 30%, which is proposed to be enhanced to 100% under the proposed Bill. As per the Bill, the market value of land for rural areas is sought to be multiplied by a factor of 2 and with addition of 100% solarium, the compensation for land in rural areas would be very high. Similarly the market value for land in urban areas along with 100% solatium would make the compensation double the market price.
These are very high prices, said CREDAI. Therefore, it said that private transaction of purchase of land by private companies should be kept outside the purview of the proposed legislation.
