Economy
Land acquisition in India to become a costly affair, says Nomura

Food Security Bill and Land Acquisition Bill are the two main election planks for the UPA government. However, if companies defer their capex plans due to the steep rise in land costs, then transactions may fall and the supposed gains to farmers may be minimal, Nomura says

The Lok Sabha debated and passed an updated version of the 19th-century legislation governing land acquisition. The ‘Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation & Resettlement Bill, 2012’ seeks to give a fair deal to farmers losing their land, especially multi-crop land, to industrial needs.

 

In a research note, Nomura Financial Advisory and Securities (India) Pvt Ltd, said post the Bill, land acquisition in India would become a costly affair. "The challenge with the land bill is to balance the benefit to farmers with the cost to industry. The bill fits well with the government’s 'inclusive growth' agenda, also furthered by the Food Security Bill. In fact, the Food Security Bill and the Land Acquisition Bill are the two main election planks for the United Progressive Alliance (UPA) government. However, if companies defer their capex plans due to the steep rise in land costs, then transactions may fall and the supposed gains to farmers may be minimal. From a macro perspective, the Land Bill is a negative for the private sector, as it increases land costs significantly and extends the acquisition process," the report said.

 

Here are the key features of the bill

 

1.  Pre-conditions for land acquisition:

 

Mandatory social impact assessment (SIA) to identify families that would be affected.

 

In the case of land acquisition for use by private companies or public private partnerships (PPP), consent of 80% and 70%, respectively, is required from the people that would be displaced.

 

Payment of compensation and a provision for rehabilitation and resettlement (R&R).

 

2.  Compensation policy: Up to four times the market value in rural areas and twice in urban areas. If the acquired land is sold to a third party for a higher price, 40% of the appreciated land value (or profit) will be shared among the original owners.

 

3.  Rehabilitation & resettlement rules: Families affected by land acquisition (farm labourers, tenants, sharecroppers and workers) need to be given compensation of Rs5 lakh or a job; a subsistence allowance of Rs3,000 per month for a year; miscellaneous allowances of up to Rs1.25 lakh per family.

 

4.  Retrospective clause: The new rules will apply retrospectively to cases where no land acquisition award has been made and to those where land was acquired up to five years prior, but no compensation was paid or no possession took place.

 

5.  Definition of market value: The market value of the acquired land shall be based on the higher of (i) market value specified in the Indian Stamp Act for the registration of sale deeds; or (ii) the average of the top 50% of all the sale deeds of similar types of land situated in the vicinity; or (iii) an amount agreed upon as compensation for acquisition of land for private companies or PPPs.

 

6.  Lease option: Companies can lease the land instead of purchasing it, but the decision is that of the state rather than the landowner.

 

According to Nomura, the main benefit of Land Acquisition bill is that it ensures equity and fair dealing with farmers. Clear guidelines on the process of acquiring land and rules for compensation packages will ensure that the process of land acquisition is clear.

 

"However," Nomura said, "the bill has negative consequences for industry. First, market prices of land have already been rising. By providing a compensation package that is a multiple of the current market price, the bill can raise the cost of land acquisition significantly, increasing the overall cost of a project. In some cases, this could make the overall project unviable and hurt capex. Second, rising land costs will have an overall inflationary impact on the economy. Third, the bill will elongate the process of land acquisition."

 

The Bill, which replaces the British-era Land Acquisition Act of 1894 provides for land acquisition as well as rehabilitation and resettlement. It will now be taken up by the Rajya Sabha.

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COMMENTS

Vinayak Bhimarao Mudholkar

3 years ago

Ways to overcome this law : 1) Lease Dead 2) Verticle Growth of buildings 3) Wherever possible, work from home 4) Three shift working 5) Use of technology to improve space utilisation

RTI Judgement Series: Farce of investigation going on for over two years

The Assessment and Collector Department of New Delhi was found conducting investigation of an individual's property file for over two years. This is 165th in a series of important judgements given by former Central Information Commissioner Shailesh Gandhi that can be used or quoted in an RTI application

The Central Information Commission (CIC), while allowing an appeal, directed Public Information Officer of Assessment and Collector Department (ACD) at New Delhi to provide information about progress of an investigation that was going on for over two years along with the names of officers and file notings.

 

While giving this judgement on 18 June 2011, Shailesh Gandhi, the then Central Information Commissioner said, “It is a farce in the name of vigilance investigation if it takes two years to investigate into the case of a missing file. Greater incompetence is difficult to imagine.”

 

Delhi resident Zameer Ahmed Zamlana, on 29 December 2010, sought from the PIO of ACD information about his property file stolen or lost in Sadar Pahar Ganj Zone in Delhi. Here is the information he sought and the reply provide by the PIO under the RTI Act...

 

1. Inform about the vigilance enquiry, name and designation of the enquiry officer in the case of missing file of property no. 1093-94, Mohalla Kishan Gunj, Teliwara, Delhi.

2. It is requested that this RTI Application be transferred to the concerned PIO as per the provisions of the RTI act to give proper and timely information.

 

PIO's Reply- With the respect to the RTI application received, it is informed that the appellant has not informed date of any complaint in the matter. Moreover, as per records, no record is available with respect of any enquiry on the above cited subject matter and hence information sought for cannot be supplied.

 

Claiming the PIO's reply as misleading, Zamlana, the appellant, filed his first appeal. In his order, the First Appellate Authority (FAA), while dismissing the appeal said that complete information has been already provided to the appellant.

 

Not satisfied with the order of FAA and citing continuous misleading and self-contradictory information being provided by the PIO, the appellant approached the CIC with his second appeal.

 

During the hearing, Mr Gandhi, the then CIC, noted that Zamlana's property file was reported to have been stolen or lost in Sadar Pahar Ganj Zone. On 22 May 2009, the SP Zone wrote to the A&C (HQ) Vigilance Cell to conduct an investigation into this and the appellant was seeking the report of the investigation.

 

The PIO stated that in the two years that have elapsed, the investigation is continuing in slow motion and the investigation is not completed as yet.

 

While allowing the appeal, Mr Gandhi, directed the PIO to provide the progress of the investigation since the letter was received from SP Zone. "The PIO will give dates on which various actions were taken names of officers who were carrying out the investigation and file notings if any. The PIO will also furnish to the Appellant whatever reports have been produced by this investigation. To take a plea that any investigation could be impeded by giving the information would be a mockery since it appears that the process of investigation itself appears to be designed to be impeded," the Bench said in its order.

 

CENTRAL INFORMATION COMMISSION

 

Decision No. CIC/SG/A/2011/001175/12941

http://www.rti.india.gov.in/cic_decisions/CIC_SG_A_2011_001175_12941_M_58711.pdf

Appeal No. CIC/SG/A/2011/001175

 

Appellant                                          : Zameer Ahmed Zamlana,

                                                                  Delhi - 110006

 

Respondent                                     : Anil Agnihotri

                                                            PIO & Dy. A & C,

                                                            Property Tax Building,

                                                            Assessment and Collector Department (HQ),

                                                            Ring Road, Lajpat nagar-III,

                                                            New Delhi 110024

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Nationalised banks write off Rs14,549 crore in March quarter

During the last quarter of FY13, public sector banks wrote off Rs14,549 crore as loans and recovered Rs16,464 core from assets that turned bad

Public sector banks (PSB) or state-run lenders wrote off Rs14,549 crore as loans, while recovering Rs16,464 crore from assets that turned bad during the March quarter.

 

In a written reply in Lok Sabha, minister of state for finance Namo Narain Meena said, “Banks resort to write off only after exhausting all other possible avenues for recovery or when the asset coverage is not enough”.

 

He further said that banks are required to adhere to Reserve Bank of India (RBI) guidelines on write offs as well its board approved policy.

 

“The banks should either make full provision as per the guidelines or write-off such advances and claim such tax benefits as are applicable,” the minister said.

 

In reply to a separate question on long term capital need of the banks, the Minister said that the government is considering setting up a holding company to meet these requirements.

 

“To meet the long-term needs of capital of PSBs, the government in consultation with Reserve Bank of India, is considering formation of holding company.

 

The matter is under consultation with Department of Legal Affairs and Legislative Department,” Meena said.

 

The public sector banks need capitalisation to meet their enhanced lending, which is increasing every year. This fiscal, the government has made provisions of Rs14,000 crore for bank recapitalisation.

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COMMENTS

RAJ

3 years ago

ONCE UPON A TIME BANK EMPLOYEES WERE PAID HIGH. NOW IN BOTTOM AND LEAST PAID. ONCE IN 5 YEARS IBA AGREES TO PAY ONLY 8 TO 10 % INCREASE. WHEREAS VI PAY COMMISSION GRANTED 50 TO 60% INCREASE TO GOVT EMPLOYEES. EXAMPLE: Nationalised banks write off Rs14,549 crore in March 2013 quarter. BANKS HAVE GOT MONEY TO WRITE OFF EVERY YEAR IN 5 DIGIT CRORES BUT THEY DO NOT HAVE MONEY TO PAY ITS EMPLOYEES WHICH AMOUNTS TO 3 DIGIT CRORES EVERY YEAR

RAJ

3 years ago

IT'S PAINFUL TO KNOW THAT public sector banks wrote off Rs14,549 crore as loans During the last quarter of FY13. It's all the hard earned money of income tax payers which are being used to write off loans and waiver of interest and giving subsidies. Why should you give loans without proper security. Most of these write offs are the result of giving loans to farmers under various schemes. BORROWERS COME TO BANK WHEN EVER MINISTERS SAY THAT LOANS TO FARMERS WILL BE WRITTEN-OFF. WHAT RIGHT MINISTERS HAVE TO WRITE-OFF LOANS? MORE LOOP HOLES GIVEN FOR BUSINESS CLASS, BUREAUCRATS AND GIVING EXEMPTIONS IN INCOMETAX. Hard earned money of income tax paid by govt and public sector employees are mis-used by the government by way NATIONAL RURAL EMPLOYMENT SCHEME LIKE NREGA, MREGA,ETC WHERE MONEY IS BEING LOOTED BY THE MINISTERS AND GRAM PANCHAYAT OFFICES. UNDER THE SCHEMES, THE GRAM PANCHAYAT CONTRACTORS SELECT CERTAIN CUSTOMERS WHOSE ACCOUNTS ARE IN-OPERATIVE AND MAKE THAT OPERATIVE TO GET NREGA ETC FUNDS BY CLAIMING THAT THE VILLAGERS ARE PAID FOR CLEANING DRAINAGE AND SWEEPING ROADS WHICH ARE ACTUALLY NOT DONE AT ALL. THE AMOUNT SO CREDITED TO VILLAGERS ACCOUNTS ARE WITHDRAWN BY THE ACCOUNT HOLDERS AND THE CONTRACTORS ACCOMPANY THE ACCOUNT HOLDERS TO COLLECT BACK THE COOLIE PAID TO UNEMPLOYED PEOPLE AND SHARED BY MINISTERS, GOVT DEPT PANCHAYAT HEADS AND CONTRACTORS . I HAVE PROOF FOR COLLECTING BACK THE COOLIE PAID TO A VILLAGER WHO IS 80 YEARS OLD AND HAS CLEANED DRAINAGE AND SWEEPED ROADS (ACTUALLY NOT WORKED AT ALL SINCE SHE CANNOT STAND PROPERLY). THE GOVT HAS REMITTED COOLIE UNDER THE SCHEMES TO IN-OPERATIVE ACCOUNTS VIA NEFT .THIS IS HOW GOVT IS SPENDING MONEY AND MINISTERS ARE ACCUMULATING ASSETS.

Asokan

3 years ago

Pl. do publish details like which are companies loans were written off, and catagories.This will give how the banks are favouring ..

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