Worries of business houses over Land Act exaggerated: Studies

Amid concerns of industry over the newly-enacted Land Acquisition Act, studies conducted by two private financial institutions have given a thumbs up to the measure, observing that some of the worries of business houses might be "exaggerated and overblown".
Studies conducted by ICICI Bank and Kotak Institutional Equities come at a time when the two major industry bodies -- CII and FICCI -- thoroughly scrutinising the Act.
The study conducted by ICICI Bank says that the industrial concerns over the retrospective applicability of the Act might be exaggerated.
"The retrospective applicability is only on selective cases and that too only pertains to compensation, not resettlement and rehabilitation," it says alleviating the concerns raised by the investors.

The study says that the new law is likely to exclude most retail and commercial real estate projects.
It termed as "largely out of place" the concerns raised by the industry over the "higher than market price" compensation.

"The 'market price', according to the bill, is the price as per official records, which are generally under-reported," the ICICI bank study says.
In its report, the Kotak Institutional Equities says that "the biggets upshot of the bill will be clarity of process: Land acquisition will now be a time-bound activity and will involve massive local participation."
"More important, private companies do not need to be concerned about this process as this is not applicable to them; only rehabilitation and resettlement part may be applicable if the project crossess a threshold," it says.

The Kotak study, however, has noted that there can be delays since land records have not been digitised in many places and setting the records right in two months can be a challenge for the local collector.
"There will now be new and multiple claimants to the same land and this can add to the timelines and process," it says.
The historic Act to provide just and fair compensation to farmers will come into force from January 1 next year.