8/6/2019 Anshul Jain - Land Acquisition Conflicts Reiterate Need for Transparency

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Land acquisition conflicts reiterate need fortransparency

Land acquisition has become a contentious issue with conflicts arising frequently in different parts of the country

Nandigram, Singur, Bhatta-Parsaul and Shahberi to name a few. The science behind land aggregation is extremely opaque,

thanks to lack of proper land records and archaic laws governing land-related issues.

The value of land depends on the potential of income it can generate. Typically an agricultural land will be much cheaper

as potential income is lower than any land which is made available for real estate development. The fact that the land

records and local area master plans can be manipulated encourages some policymakers and private land

aggregators/developers to colludeagricultural land is then aggregated at low prices in areas with an inside knowledge of

an impending change in land use which will drive the price up. The farmers and land owners of course do not have this

valuable information. As a result, farmers sell land at prices which are cheaper and therefore end up feeling cheated when

prices soar after change of land use.

The impact

The loopholes in land related laws are detrimental to the economy. The landlords get inadequately compensated in some

cases, and the soaring price of land after change of land use hurts the end-users who purchase real estate after

development of the area. In cases where farmers protest and get a favorable judgment like it happened in Singur or

Shahberi, the general confidence for future investment into new areas necessary for the larger economic development of

the country suffers a huge setback.

Turmoil such as these have a direct impact on real estate prices in the area as it is very difficult to convince the builders, in

case the situation improves after government intervention, to restart or launch new projects. It will be extremely difficult

for the builders to convince the customers that all is well and settled and their investment is safe in such areas. Investors

have already started shying away from disputed areas such as Noida Extension where the sales have come to a halt even

in projects which are safe at the moment. With the extensive media coverage, homebuyers are now definitely more aware

and doing their homework before getting lured by low-cost projects to ensure their investment is safe.

Some measures ahead

In order to arrest the issues and conflicts arising out of land acquisitions, the Centre plans to introduce an amendment to

the Land Acquisition Act of 1894. The first amendment to the Land Acquisition Act was made in 2007, which lapsed with

the dissolution of the 14th Lok Sabha.

The solution

The solution to the problem lies in driving transparency in the market. Clear and transparent rules of acquiring land,

compensation to land owners and rules around approvals and governance around delivery of end products to consumers is

urgently required. This will increase competition in the development market as more businesses would enter the

development sector. Fair market competition will create healthy bidding for land, ensuring adequate compensation to land

owners and ensure quality and delivery of products at competitive prices to the end-user, benefiting the economy as a

whole. Confidence in the sector would promote flow of foreign direct investment and local institutional money into the

sector, thereby easing up financing woes of the sector.

The extent of the problem cannot be quantified, but one thing is certainif the government does not act now, conflicts

such as those arising in Singur and Shahberi will only increase and will be a huge impediment to the growth and economic

development of the country.

Anshul Jain is chief executive officer, DTZ International Property Advisors.

http://www.dtz.com/India/Contact_Us/Anshul+Jainhttp://www.dtz.com/India/Contact_Us/Anshul+Jain

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Source: http://www.livemint.com/2011/07/25221335/Land-acquisition-conflicts-rei.html

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