Rating agency Crisil said on Friday that the Land Acquisition Bill, which was passed by Lok Sabha the previous day, will lead to an increase in the gestation time of projects and overall costs.
The bill, which replaces the century-old Land Acquisition Act, 1894, proposes a unified legislation for acquisition of land and adequate rehabilitation mechanisms for all affected persons.
With the rehabilitation and resettlement clauses of the Land Bill, Crisil Research expects land prices to increase as the expectation of land owners will be higher.
"The land acquisition process will be longer and project gestation period will increase. Currently, the proportion of supply (which comprises projects of over 50 acres) to total planned supply in the top 10 Indian cities is 25 per cent," it said.
Consent of 80 per cent of landowners in case of land acquired by private companies and 70 per cent for land acquired under public private partnership (PPP) model.
The bill calls for consent of 80 per cent of the landowners in case the land is acquired by private companies and 70 per cent in case the land is acquired under the PPP mode.
The process of obtaining consent shall be carried out along with the Social Impact Assessment (SIA) study.
The new rules will apply retrospectively to cases where no land acquisition award has been made and to those where land was acquired up to five years prior, but no compensation was paid or no possession took place.
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