Land Acquisition Law Will Spike Costs, Delay Projects: Experts

New Delhi: The new land law, that will replace 120-year-old archaic regulations, is expected to delay and spike costs of major housing, infrastructure and industrial projects, experts and industry people say.
“Cost of land will go up and the time taken for acquiring such land will also get prolonged, as rehabilitation and resettlement policy will be applicable,” said Raheja, chairman and managing director of Raheja Developers.
The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Bill, 2012, that seeks to replace the Land Acquisition Act, 1894, was passed by parliament last week. It will come into effect after the president gives his assent and the act is notified.
The bill proposes a unified legislation for acquisition of land and adequate rehabilitation mechanisms for all affected persons.
According to research and rating firm Crisil, the new legislation will lead to an increase in the gestation period of major projects and spike overall costs.
“Our interactions with industry players suggest that the overall project costs will increase by around 3-5 percent,” Crisil said, adding the increase in overall costs will impact the “viability of such projects”.

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