Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Land Acquisition Bill 2011
The Central Cabinet has approved the much awaited Land Acquisition Bill 2011, likely to
be tabled in the Parliament later this week and expected to be cleared before year end,
which seeks to lay down increased compensation for land owners. The bill proposes:
1) The compensation offered to land owners would be four times the notified rate for rural
areas and two times the notified rate for urban areas, along with other benefits, as per the
bill.
2) All land acquisitions above a threshold (>100 acres in rural area; >50 acres in urban
area) whether undertaken by the government or private parties would necessarily be
required to formulate a Rehabilitation and Resettlement (R&R) policy covering the land
owner and everyone dependent on the land. Therefore, the bill increases the scope of
people covered under the compensation, leading to a further increase in cost.
It should be noted that the bill is only proposing a model framework devised by the Central
Government, leaving it to state regulators to decide how land acquisition transactions will
be dealt with in their states.
Conclusion: We believe this bill would sharply increase costs for companies from the
mining, metal, real estate and infrastructure sectors; though it will speed up land
acquisition, which is the major hindrance for most greenfield projects. Further, government
agencies such as Railways and National Highways Authority of India (NHAI) would also be
required to shell out more, thereby delaying development work given their limited financial
strength. Our interaction with various construction companies indicates that there would
not be a direct impact on them given in most cases the land is arranged by the client (such
as NHAI, Railways and Developers), but they have acknowledged the fact that this would
impact them via delays in awarding of building projects, NHAI projects and industrial
projects, among others.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Land Acquisition Bill 2011
The Central Cabinet has approved the much awaited Land Acquisition Bill 2011, likely to
be tabled in the Parliament later this week and expected to be cleared before year end,
which seeks to lay down increased compensation for land owners. The bill proposes:
1) The compensation offered to land owners would be four times the notified rate for rural
areas and two times the notified rate for urban areas, along with other benefits, as per the
bill.
2) All land acquisitions above a threshold (>100 acres in rural area; >50 acres in urban
area) whether undertaken by the government or private parties would necessarily be
required to formulate a Rehabilitation and Resettlement (R&R) policy covering the land
owner and everyone dependent on the land. Therefore, the bill increases the scope of
people covered under the compensation, leading to a further increase in cost.
It should be noted that the bill is only proposing a model framework devised by the Central
Government, leaving it to state regulators to decide how land acquisition transactions will
be dealt with in their states.
Conclusion: We believe this bill would sharply increase costs for companies from the
mining, metal, real estate and infrastructure sectors; though it will speed up land
acquisition, which is the major hindrance for most greenfield projects. Further, government
agencies such as Railways and National Highways Authority of India (NHAI) would also be
required to shell out more, thereby delaying development work given their limited financial
strength. Our interaction with various construction companies indicates that there would
not be a direct impact on them given in most cases the land is arranged by the client (such
as NHAI, Railways and Developers), but they have acknowledged the fact that this would
impact them via delays in awarding of building projects, NHAI projects and industrial
projects, among others.
No comments:
Post a Comment