Only 15% of major projects in India stalled due to land acquisition: RTI

With the NDA govt at the Centre under the PM Narendra Modi deciding to re-promulgate the Land Acquisition Ordinance, for the third time, the debate on the the need for such an act will continue to be a hot topic. The Land Acquisition Act has turned into a political hot potato for the govt but it has not shown any sign of backing off from pushing it through.

The Prime Minister recently said in an interview that Land Acquisition Act wasn’t “a matter of life and death” for him. 

But what is the extent of damage that land acquisition issues have caused to projects in India? Ambit Capital  has now come out with a report on the issue. As per the report, a RTI query was filed in March this year demanding an exhaustive list of stalled projects in India. The report focuses on projects worth Rs. 500 Cr or more and provides the following insights.

According to this report, only 15% of projects (in value terms) are stuck due to land acquisition problems whereas, environmental and non-environmental clearance issues have stalled 37% of these high value projects. 



The report further goes on to say that the Steel and Power generation sectors are the ones most affected by land acquisition problems.

Sector-wise % of projects being stalled due to land acquisition | Create infographics

The top five projects (by value) stuck due to land acquisition are the Kopta SEZ project in Maharashtra, the Tata Steel’s Jharkhand plant, Bhushan Steel’s plant in Salanpur, West Bengal, Torrent’s Pipavav thermal power plant in Gujarat and KSK Energy Venture’s thermal power plant in Orissa.



These conclusions give lie to the assertion that growth has been hobbled by land acquisition issues in India. Moreover, if even these land acquisition issues are resolved,  then Steel and Power generation will be helped the most. Are those two sectors causing a slowdown in India’s growth? Not quite as this Business Standard report shows, India already has surplus power.

The PM and his party have invested massive political capital in pushing through the land acquisition act, asserting that land acquisition is holding India’s growth back. This report by Ambit Capital on the other hand proves that assertion incorrect and makes one wonder whether the PM is putting his money on the wrong horse here to fuel India’s growth.