New Land Bill not investor friendly: Pronab Sen

The new land acquisition Bill, which is set to replace the Land Acquisition Act, 1894, would make acquiring large tracts of land infeasible, said Pronab Sen, principal advisor, planning commission, government of India, here on Thursday.

The new Bill says compensation to land owners has to be four times the market value of land in rural areas, and two times the market value in urban areas. “The land acquisition Bill makes land acquisition more expensive. It makes large tracts of land infeasible. We need a method where sensible pricing becomes a norm,” said Sen, at an interactive session at the Bharat Chamber of Commerce.

States like West Bengal should have a land acquisition policy based on number of job created per acre of the industrial project, said Sen.

Fragmented land holdings and pricing have stalled a number of big ticket investments in West Bengal.

“For too long we have under-priced land. The land policies led to suboptimal use of land. The land market does not exist in most states. We have too many examples of companies acquiring land, two or three times more than requirement,” said Sen.

Apart from higher compensation, the new Bill stipulates mandatory approval of 80 per cent of land owners for acquiring land for a project, except in instances where land is acquired for public purposes.

Food Prices
In reversal to the current trend of negative inflation, food inflation would rise to seven per cent by March this year, said Sen.

Food inflation remained in the negative zone at (—)2.90 per cent for the week ended December 31, 2011.

“By March food inflation should be back to 7 per cent level. This is not alarming, as between 2004-2009, the average food inflation was seven per cent. The rise would be because of the rising consumption in rural areas,” said Sen.

Also trashing hopes of a fall in interest rate in the near future, Sen said that “there was no possibility that the RBI will cut rates in the next quarter, if not in the quarter and half.”

“RBI will not reverse interest rates until RBI has credible information that headline inflation comes down,” said Sen.

The gross domestic product (GDP) growth rate this year could be around 7.2-7.3 per cent, while in the revised estimates it should be 7.5-7.7 per cent, he said.