IMPACT OF THE IMPLEMENTATION OF REGULATION BILL IN REAL ESTATE

We hear a lot of 'janhit mein jaari' advertisements nowadays that try to explain the latest reforms regarding land acquisiton. But its not in public interest, if not understandable. So here is a gist of the Land Acquisition, Rehabilitation and Resettlement Bill introduced by the Parliament in the monsoon session. 

NEED FOR REFORM 

The old Land Acquisition Act, 1894 had some of the following shortcomings and so it was time to abandon the same.

• Forced Acquisitions: No attention was paid to the effect of the acquisition on the land owners once the buyers decided to acquire the land.
• No safeguards: No real appeal mechanism existed to stop the process of acquisition.
• The Act remained silent on the resettlement and rehabilitation of the displaced.
• Urgency Clause: Every transaction constituted urgency on part of the buyer which at times resulted in the dispossession of land and dissatisfaction of token money.
• Low rates of compensation and scant regard for the welfare of the common man.

LAND ACQUISITION, REHABILITATION AND RESETTLEMENT BILL 

The previous Act as we saw was ignorant towards the landowners and so a need to compensate the land owners in lieu of their lands acquired for industrialisation and urbanisation arose. The new Bill includes 3 main parameters:

• Applicable to 50 acres of urban land and 100 acres of rural land.
• Consideration is twice the market value for urban land acquisition and 4 times for rural land transactions.
• Private acquirers need 80% consent of land owners whereas public-private partnerships need 70% for the same.

Considering the above points on part of the land owners, their side of the grass is surely green. The new Bill makes an effort to rule out the problems of unwarranted claims and issues of inadequate compensations. 

SHORTCOMINGS

• These new reforms, on the whole remain biased as the buyers and end users have a heavy cost to pay.
• All the above parameters increase the total project cost as the time to have the consent and to acquire the land too stretches. This results in a cascading effect on project costs being charged from buyers in large township projects.
• Most developers invest in smaller pieces of land due to the arbitrary unit used to fix the token i.e., twice the price for urban lands and 4 times for rural deals. 

BAN ON INTERNATIONAL INVESTMENT

In anticipation of tighter liquidity conditions globally, foreign institutional investors (FIIs) withdrew money from the Indian debt and equity markets. As a result, the rupee depreciated against the dollar. In order to stem its fall, the RBI in August framed rules designed to preserve the country's foreign exchange reserves. Besides reducing the amount that Indians could remit abroad annually from $2,00,000 to $75,000, the central bank also imposed a ban on investment in international real estate.