Assignment land market india

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land acquisition India assignment

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Assignment land market india

  1. 1. REPORT ON LAND MARKETS IN INDIA 5th March 2012
  2. 2. One of the biggesthurdlesinthe storyof growthof Indiais the issuesrelatedtolandandits acquisition.The land acquisition issueshave ledtodelayorcancellationof anumberof projects whichhave hinderedthe progressof notonlythe companiesbutalsothe nationasa whole. These uncertaintiesandrisksof the projectshave mushroomedfromthe protestsandresistance of the populationaffectedbylandacquisitions. These protestsare resultof variousfactorsincludingcultural issues,impropermonetary compensation,environmental issues,etc. Let’slookat an example:Tehri DamProject. Source: Google Images; Protests against the construction ofTehri Dam The above picture depictsthe protestsenvironmental organizationsandlocal peopleagainstthe constructionof a dam inTehri,Uttarakhand. This issue wasmore thanjustthe monetary compensationasthe OldTehri wasthe capital of the Garhwal Kingdomandhence had an immense historical importance forthe peopleof thatregion.Apartfromthe resistance basedonthe historical importance,there were alsoresistancesfromthe religiousfrontasthe construction of damrequired initiallyblockingthe Bhagirathi Rivertofill upthe dam.Thisdidn’tgo downwell withthe religious sentimentsof manypeopleastheywere opposedtothe ideaof blockingone of the tributariesof holyGanges. Thisultimatelyresulted inthe delayof the projectandcostoverruns.LandAcquisition has made a numberof otherprojectsfinanciallyinfeasible. No twopiecesof landissame is a fact whichimpedesthe natural emergenceof landmarket. A private developerorsponsorof the projectbasicallytwowaysof acquiringland:Market AcquisitionorAcquisitionusingeminentpowersof the state. OwingtoissuesresultingfromLand AcquisitionProjectDeveloperspreferusingeminentpowersof the state overmarketacquisitionof land. The problemwithlandacquisitionhasalsoarisesfrompoorlandadministrationinIndia. Duringthe BritishRule,recordswere onlypreparedforthe agricultural landbutnoproperrecordswere maintainedforthe residentiallandsandthe spatial recordswere neglected.PostIndependence,low prioritywasgiventoagricultural landrecordsas landrevenue arisingfromthislanddeclinedin importance.Also,multiple agencieshandledlandrecordswithnointerconnectivitybetweenthem. Computerizationof landrecordsalsofocusedonlyon‘computerization’perse ratherthanto maintainaccurate and upto date records.All these factorsledtolackof clarityinlandtitlesleading to disputesandlitigations.A buyerwouldalwayswanttopreventthese risks.
  3. 3. Alsothe transactioncost isprettyhighinIndiaas comparedto global average. The average stamp dutyin Indiais9-10% of transactionvalue.Thisleadstoinformal agreementsandunderreportingof transactionvalue. The landuse control measureslike limitonFARratio, alsoaffectthe value of land. These factorsmake it difficulttoestimate the correctmarketvalue of a piece of land. Anotherimportantfactoristhe Non Agricultural Use Clearance neededtouse an agricultural piece of landto non-agriculturaluses.NACisgenerallynotawardedtoafarmeras theyusuallydon’thave abilitytouse the landfor non-agricultural issues.Thismeansthat,purchasers(builders) are able to extractmore value outof the landas comparedto farmersand there isa wealthtransferatthe cost of the agriculturist,whocan’tgetNACfor hisland.The pointis,if the marketnegotiationswere permitted,farmerscanbargainforhisland. One of the landacquisitionissuesfromrecentmemory isNoidaLandAcquisition issue.The land acquisitionwere carriedoutbythe state of UP as perLand AcquisitionActforindustrial purposes.A total of about2000 hectaresof farmlandwere acquiredbythe governmentatRs850/sq ft and then soldfor more thanRs 10000/sq ft to the developersforresidential purposes. Thisledtounrest amongstthe farmerswhofelttheywere ill treatedasthe landwastakenfrom themat dirtcheap ratesin the name of developingindustrial area;insteadthe landwasresoldatmuchhigherratesto the developersforresidentialpurpose. Hence,notonlythe farmersbutalsothe commonmiddle classpeople who purchased apartments fromthe private builders were affected. Source: Google Images; Farmer agitation against land acquisition in Noida Usually,the landisidentifiedandacquiredbythe DistrictCollectorandhe/she hasdiscretionover selectingthe rightvalue forthe land.Theyuse marketprice basedonthe stampduty whichis generallyunderreported.Hence,there isnoconceptof independentlandevaluatorsinIndiaand alsono legislationexistwhichapprovessuchprofession.The creationof suchexpertswouldmake the landacquisitionprocessfairforthe losersof the land. Often,there isa longgap betweenthe promise andfulfilmentof processof rehabilitationand resettlement(R&R) whichisamajorreasonfor distrustagainstlandacquisition.The processshould beginalongwiththe issuingof firstnotificationunderthe AcquisitionAct. Onlydemonstrating successful implementationof R&Rwill reduce this distrustlevel.
  4. 4. References:  Land Markets inIndia: By SebastianMorrisandAjayPandey  Securityof Title toLand in Urban Areas: By Swati Ramanathan  Mega projectsinIndia:Environmental andLandAcquisition Issuesinthe RoadSector:G. Raghuram,SamanthaBastian,Satyam ShivamSundaram;W.P.No.2009-03-07 March 2009  Land AcquisitionIssuesinNoidaDistrict: Backgroundto‘Land Wars’ inIndia;Hajime SATO  LANDACQUISITION ISSUES;M.M.K. Sardana

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