Land acquisition bill a result of knee jerk reaction?

Track2Realty Roundtable-II

Venue—India Habitat Centre

Moderator—Ravi Sinha, CEO & Managing Editor, Track2Realty

Panelists—Sachin Sandhir, MD, South Asia, RICS

                        Achal Agarwal, ED, Investments, Fire Capital

                        Sunil Dahiya, MD, Vigneshwara Developers

                        J C Khera, GM, Finance, Supertech

Ravi Sinha: You mean to suggest the land acquisition bill has not really been deliberated upon and came as a knee jerk reaction?

Sachin Sandhir: Of course, it is a knee jerk reaction. I think in its current form it is not tenable and it is not implementable. So while the intent is very right, like you mentioned, a lot of key positions have not been thought out yet in detail. And so the ambiguity remains, like for example, how is it to be treated in voluntary acquisitions and in involuntary acquisitions.

They have not talked about many specific things. They talk about multi crop land. Now how to acquire land in areas where all the land available is like that only? So I think there is a lot more deliberation that is required. Even the industry bodies were taken by surprise. Everyone’s recommendations reached after the date that was set and I don’t even know when they set that date and suddenly you realize there is a notification. I don’t know why it had to be done that way.

Ravi Sinha: Achal, if at all the land acquisition bill is passed in its current form, do you think it will drive away the investors from funding into real estate.

Achal Agarwal: Land acquisition in general is an issue across locations, all over India. It is not the first time it has come up. One thing that Mr Dahiya mentioned is that whether Government is really required to step in when there can be a fair market transaction. The thing is that whatever these regulations were trying to, it might actually be defeating the entire purpose because all the cost in the end will be passed to the end user. So I won’t comment on whether an investor would like to get into it because of land acquisition bill. But the thing is, in general, the real estate industry is affected because the underlying costs are getting higher and higher and it is going to impact the overall state of the market.

Sunil Dahiya: See that is basically the purpose of the policy which in recent context you see in Greater Noida. Land was acquired from the farmers at Rs. 800 per sq m and given to the developers at Rs. 8000 per sq m. Now, that way, this land policy is basically being brought as a deterrent for the Government to go in for land acquisition. It is not a deterrent for private parties to acquire land.

Achal Agarwal: But Sunil, it would affect the private players at the time when they say that ok the minimum acquisition price would come into affect from the next time.

Sunil Dahiya: It is only for fresh acquisitions, not the current ones.

Achal Agarwal: I think there is also a clause that you have to intimate the DM’s office in terms of acquisition.

Sunil Dahiya: Only for Government acquisition.

….to be continued