FRIDAY JULY 06 2012

Textile industry demands fibre
policy at CII's Texcon 2012

Collaborations, stable policies, productivity and skills development key to a globally competitive textile sector : Kiran Dhingra, Secy Textiles

Thesynergyonline Economics Bureau

Mr D L Sharma, Conference Chairman and Director, Vardhman Textiles, Ms Kiran Dhingra, Secretary, Ministry of Textiles, Mr S P Oswal, past chairman, CII National Committee on Textiles and Chairman, Vardhman Textiles anf Mr Pikender Pal Singh, Regional Director, CII Northern Region at Texcon 2012 in New Delhi on Thursday.

NEW DELHI, JULY 05 :
“TEXTILE sector can grow and sustain if and only if the scale of operations is increased and latest technology is adopted to raise productivity levels” opined Ms Kiran Dhingra, Secretary, Ministry of Textiles, Government of India at the Texcon 2012 organised by Confederation of Indian Industry (CII) Northern Region in New Delhi on Thursday.

“The small companies isolated in different parts should collaborate as clusters to achieve economies of scale, raise volumes, efficiency levels, technology enhancement and best designing techniques”, she added while releasing the CII – Wazir Advisors Report on “New Paradigms for Textiles”.

Mr Jayant Davar, Deputy Chairman, CII Northern Region shared some of the important issues which need immediate policy reforms for the textile sector like bringing MSP back to reflect the international price levels, rationalization of power tariffs in India , additional Duty Draw Back and DEPB rates to ensure all state levies are rebated, CENVAT accumulation to be refunded in cash and promoting FDI in the textiles and Apparels sector to make quick technological advancements.

“It is disheartening that, despite India being a large raw materials base for textile industry with huge manpower availability and large industry base as well, yet only 5  percent of our industry is globally competitive because the rest is in un- organized and decentralized sector. This large unorganized sector has poor capability to raise its productivity, volumes and quality standards owing to poor access to latest technologies and finances”, shared Mr S P Oswal, past chairman, CII National Committee on Textiles and Chairman, Vardhman Textiles .

Mr Prashant Agarwal, Joint Managing Director, Wazir Advisors shared that “India has a great potential globally in the textiles scenario. Currently, the global trade in the textiles and apparels sector stands at $ 700 billion of which India’s exports account for a meagre $ 34 billion, hence leaving a huge gap. Domestically though at $ 57 billion, Indian textile industry is still underplayed and not growing because of various constraints like small scales of production, low finance availability, lack of skilled labour, poor designs and low productivity”.

Mr Mukund Choudhary, vice chairman, CITI and Managing Director, Spentex Industries called for a fibre policy to be in place at the earliest as promised by the Prime Minister at an earlier Textile Summit in 2008. Without this policy in place there is no clarity on what to export, when to export, how much to export and what benefits would accrue since there are a whole lot of fabrics.

Mr Sanjay Jain, Managing Director, T T Limited offered the government on behalf of the textile industry to come out with a model which would pay the industry 20 – 25  percent  of the amount the government is paying under the NREGA scheme and the industry would guarantee 365 days of employment even at its own cost. The need to integrate government policies, strategies and NREGA with industry scenario was also highlighted. 

Mr Arun Maira, Member - Planning Commission, GoI said that, “The Indian textile sector which employs 90 million people directly or indirectly today desperately needs huge investments in latest machinery, R & D, innovation, skills development, FDI, joint ventures (JVs), design and stable government policies if it has to grow to its true potential”.

Mr D L Sharma, Conference Chairman and Director, Vardhman Textiles, shared that “Even countries like Bangladesh, Turkey, Vietnam have created their Unique Selling Points (USPs) and have managed to come out with a very well organized textile sector. It’s high time India also created its USP which could be “Scales with flexible order size and focus on skills and design”

Mr Sachit Jain, co-chairman, CII National Textile Committee and Executive Director, Vardhman Textiles ,said that “60 percent of what is bought today is non - cotton, synthetic and man - made fabric. Hence both Indian textile industry and the government should also change focus from cotton yarns to synthetic fabrics to be globally competitive”.

Mr Pikender Pal Singh, Regional Director, CII Northern Region shared that it is CII’s continous endeavour to create awareness about recent global and domestic trends in the textile sector, sharing information about recent advancements in textile manufacturing technology, advocate policy initiatives with the government on all fronts to help foster industry and to intergrate government policies with industry’s strategies. Texcon 2012 was also one such initiative for the benefit of the industry.

Call for urgent measures
to check malaise

Thesynergyonline Economics Bureau

NEW DELHI, MAY 27 :
INDIA may not yet be heading towards a balance of payment (BoP) crisis, but the macro-economic situation of the country is worsening by the day calling for almost emergent steps to ensure that no further damage is done to the economy, a quick ASSOCHAM survey of leading economists and select CEOs pointed out.

Out of the 58 economists and CEOs covered under the quick poll in the last one week, as many as 53 said India’s macro economic situation has suddenly worsened.

It was a combination of flip-flop on domestic policies and the global uncertainties arising mainly from the troubled Euro-zone which played a spoilsport for the Indian economy.  Breaking out of scams, one after the other, resorting to taxation policies which are perceived to be unfriendly to the global investors, political compulsions of the government in not pursuing the economic reforms are the major factors which have led to a worrying state of economy, which  was  booming till two years ago, the survey respondents pointed out.

  “The worst disaster is coming from a huge uncertainty on the rupee value and its free fall. Everybody out there in the business world is feeling shaky, “said the survey conducted by the Associated Chambers of Commerce and Industry of India (ASSOCHAM).

A whole lot of sectors be it automobile, tourism, steel, oil, gems and jewellery, real estate are feeling the heat of rising dollar and weakening rupee. While cost of raw material imports has gone up significantly with rupee weakening by over 13 per cent in the last few months, inflation raising its ugly head is adding to the nervousness among the industry, bankers, and   policy makers, the survey indicated.

Though  April inflation numbers of 7.23 per cent have mostly the food components, one sees a clamour among a section of the analysts and commentators asking the RBI to stay course with the tight monetary policy. The inflation, based on the Wholesale Price Index was 6.89 per cent in March. The Consumer Price Index has also crossed the 10 per cent mark. This will hit the pricing power of the manufacturers who will have to absorb the increasing costs with their balance sheets taking a toll.

  “This will be catastrophic and depress the demand in the manufacturing sector,  largest employment source after agriculture and the services ”, said Mr  Rajkumar Dhoot, president, ASSOCHAM.    
 
However, he hoped that the Reserve Bank of India will take a balanced view when it reviews the credit policy next month. Signals given by RBI Govenor D Subbarao point so, thankfully.

“We noted that increase in WPI has been on account of food inflation. The core inflation has remained below 5 per cent. So in our next mid-quarterly review, we will take into account the numbers which have come after our mid-April statement”, The RBI chief said in Mussoorie on May 24.
 
The economists surveyed in the ASSOCHAM poll suggested that there is a limit to which the RBI can intervene for taming the dollar and strengthening the rupee. The answer, majority of them, suggested must be found out by policy decisions by the Central Government. This must include reining fiscal deficit by cutting wasteful expenditure by slashing untargeted subsidies and reducing the current account deficit. The country’s CAD has already crossed four per cent of the Gross Domestic Product, which is not sustainable in the long run.

Exports, both merchandise and services, have to be pushed up along with confidence building measures to improve the financial inflows. The foreign institutional investors, who remained bullish on India till March 16 have certainly turned negative on the country.

“The trouble is that the negatives are feeding on themselves. One thing leads to the other.  While the country’s foreign exchange reserves can take care of imports for six-seven months, we cannot afford any complacency on this count. We certainly do not want to be in a position where some of the European nations  find themselves in,” the ASSOCHAM President  said.

The respondents also suggested faster clearance of the big projects in the steel, coal, cement, road, ports and shipping sectors. The private sector will chip and the global funding will return to India in case the government announces clearances to the projects worth hundreds of billions in these sectors, in the next three month, the CEOs pointed out.

Otherwise, when negatives feed on themselves, company after company would face difficulties as they would mark to market losses leaving bruising impact on their balance sheets. Those who have borrowed money from overseas sources would find it difficult to redeem their debt as the dollar cost is becoming prohibitive.

Also, there would not be much benefit to the exporters as well, as high amount of volatility has to be hedged for a cost, the ASSOCHAM said. “Net, net, it helps no-one,” it said.

The chamber said it was time the nation rose up to the economic challenge. “Each of the stakeholders - industry included - must chip in sending signals among the global community that the India story is alive,” said Mr. Dhoot.

LARR Bill 2011 : Policy Barometer

Provisions could lead to sharp
rise in land acquisition cost

Thesynergyonline Economics Bureau

THE Confederation of Indian Industry (CII ) believes that India has enough land and water for all its needs including agriculture, industry, domestic and other uses. It is possible to define laws/ acts/ policies/ norms that enable optimal management of these resources so as to satisfy all requirements. CII therefore welcomes the LA RR Bill 2011 as a first attempt of its kind to provide guidance on all aspects of land acquisition, resettlement of project affected people and their rehabilitation. In particular, CII appreciates the continued role to be played by the Government in land acquisition for industrial development, as proposed in the Bill.

CII believes that compensation to project affected families should be adequate, so as to make their quality of life better and  their earnings higher, post land acquisition. At the same time, the norms should not increase project cost to such an extent as to make the project unviable.

Such a policy would run the risk of slowing down the process of industrialisation, ultimately affecting growth, employment and overall socio-economic development. Planned industrialisation is essential for the Government to fulfill its responsibility for economic development and employment generation.

CII’s Position on Land Acquisition Currently, land is acquired in India under the framework of the Land Acquisition (LA) Act 1894, which has several deficiencies relating to the method of valuation of land, definition of ‘Public Purpose’ and other issues related to land acquisition.

CII is of the view that while these issues need to be addressed, however any amendment to the Act must not limit industrial growth in the country, which is essential for its overall economic development. Keeping this in mind,  CII’s recommendations on different provisions of the Bill are :

The Bill stipulates that 'provision of land in the public interest for private companies for the production of goods for public or provision of public services' is subject to consent of at least 80 percent  of project affected people.

CII is of the view that in a democratic, liberalised economy where the private sector is playing an increasing role in the nation’s economic growth, the provision of 'consent of 80 percent  affected families' imposed only on land acquisition for private sector, appears to be discriminatory in nature.

In fact, consent of the project affected people is sought to be introduced from the point of view of removing coercion.

In the current form of the Bill, it appears that the Bill is stipulating that ‘coercion’ of people is acceptable for use of the land by the Government and by public sector but it is not acceptable when the land is acquired for use by the private sector. As a matter of fact, the land loser is indifferent to the subsequent use of the land.

CII has recomended that, if at all the provision of 'Consent' is to be accommodated it should be reduced to 60 percent  of project affected families, uniformly and equally applicable to all cases, irrespect ive of the end use.

Also, the provisions of LARR Bill have already defined the entitlements of the project affected people including the landless and other project affected people.

Thus, to make the process of obtaining consent ‘definitive‘, CII proposes that consent should be obtained only from the ‘land owners‘ instead of all the project affected people.

As per the provisions in the Bill, for determining the land compensation, a multiplier of 2 needs to be applied to the land value; in addition, 100 percent  Solatium for rural areas has been proposed. CII is of the view that the proposed provisions will result in land cost to increase by 3-3.5 times, which will severely affect the viability of industrial projects across the board. This will severely erode competitiveness of the Indian manufacturing sector.

The principle of Solatium as per LA Act of 1894 was primarily to address the concern of undervaluation of land, done to avoid stamp duty. In essence, the 'Solatium' is equivalent to the 'multiplier'. In the proposed Bill, the concept of the multiplier takes care of this aspect of undervaluation. Therefore a Solatium is not required over and above the multiplier.

In case the Solatium is to be retained as a continuity of the LA Act of 1894, then it may be retained, at 30% and the multiplier be reduced to 1.5 instead of .

CII is deeply concerned that the provisions of the Bill will lead to spiral increase of land prices.

To exercise restraint it should be specifically mentioned in the Bill that compensation amount, as described in The First Schedule, should not be treated as market price of the land for subsequent acquisition in adjoining areas.

This will also  ensure that the land losers from the project would not lose their ability to buy land in the vicinity with the enhanced compensation received.

The Bill also stipulates that rehabilitation and resettlement (R&R) provisions are to be made applicable for procurement of land (more than 100 acres in rural areas and more than 50 acres in urban areas), in cases where private parties directly buy the land from owners.

CII is of the view that since land is procured through negotiations between land owners and private companies, the former would already have protected their interest through the quoted price.

Application of rehabilitation and resettlement provisions would only push the land prices further upward.

Instead, provision of rehabilitation and resettlement should not be applicable to land owners in such cases as sellers would have received the premium on land value. However, a suitable rehabilitation and resettlement entitlement could be laid down for affected families who lose their livelihood as a result of such land acquisition.

There are different categories of people / families that are involved in a piece of land that is proposed to be acquired and they would be affected in different ways.

Typically, when land is acquired, the affected families could lose their land, house, assets
or livelihood or a combination of these. The Bill stipulates that families owning the land or whose livelihood is affected as a result of land acquisition shall be entitled for a specified rehabilitation and resettlement package, thus treating different categories of affected families at par. This leads to higher compensation, not necessarily aligned to their losses.

CII has recommended that instead of using the broad term 'affected families', the category of families need to be clearly defined and according to their losses, suitable compensation package should be laid down.

Rehabilitation and resettlement provisions need to justifiably differentiate each category, depending on what they lose as a result of land acquisition, keeping in mind that families need to be much better off than they were prior to the acquisition.

Also, the Bill stipulates numerous rehabilitation and resettlement entitlements for Scheduled Castes (SC) & Scheduled Tribes (ST). These entitlements would also be applicable in Non-Schedule Areas.

CII feels that the stipulated provisions are too complex to be implemented.Rather than numerous provisions, SC/ST families should get 25 percent higher benefits as compared to others. In addition, these special provisions should only be made applicable to Notified Scheduled Areas.

In case of land acquisition in Non Schedule Area, the rehabilitation and resettlement (R&R) Commissioner should be empowered to settle land in favour of the SC/ST families on a case to case basis.

The Bill stipulates that the Collector should take possession of the acquired land only after the entire compensation and rehabilitation and resettlement (R&R) entitlements are disbursed. CII is concerned that the whole process of land acquisition can be stalled even if a very small segment of people refuse to accept the compensation.

Instead, CII suggests that the Collectorshould be empowered to take possession of the land after 80 percent  of the affected families have accepted and received the compensation.

The Bill proposes certain restrictions on acquisition of irrigated multi-cropped land with reference to special provisions to safeguard food security. Such provision may hamper the industrial development of States which predominantly have multi-cropped land. Industries based on nature would also be severely affected as minerals occur naturally and hence their locations cannot be chosen. Against this backdrop, CII suggests that this provision should not be applicable in case of mineral extraction projects.

The Bill envisages return of the land if not utilised for a period of 10 years. While this clause safeguards against indiscriminate land acquisition, the delay in the project may be due to reasons beyond the control of Industry. In addition, land for future expansion plans would need to be acquired and may not be utilised in the initial years.

CII suggest that, the industry must submit a 'land use plan' and adhere to the plan. Also,a Committee under the Chairmanship of the Chief Secretary of the State should be empowered to take decisions on a case to case basis.

The Bill stipulates that in cases of land acquisition where award under Section 11 of LA Act 1894 has not been made, the process would lapse upon enactment of the new Bill and the process of land acquisition would have to start afresh.

CII is concerned that the applicability of the proposed provision would affect on-going industry projects; re-starting the process of acquisition would mean delays and cost escalation, ultimately affecting the viability.

In cases of land acquisition where the notification under Section 11 of LA Act 1894 has already been issued and the process of award commenced, such cases should be continued as per the LA Act of 1894.

A comprehensive definition of 'Public Purpose' has been laid down in the Act.

Despite the definition being comprehensive, which includes infrastructure verticals, it does not include large infrastructure projects such as Delhi Mumbai Industrial Corridor (DMIC) or National Manufacturing and Investment Zones (NMIZ). Large projects of national interest should be explicitly included in the definition of 'Public Purpose' in order to facilitate sp eedy progress of these projects.

According to the Bill, stamp duty and other fee payable for registration of land or house allotted to the affected families shall be borne by the Requiring Body. However, imposition of such a provision will result in increase in cost.

CII is of the view that stamp duty and other fee for registration of Land / House allotted
to the affected families should be waived. Similarly, capital gains tax under IT Act should not be applicable for compensation amount received by project affected families.

The Bill stipulates public hearings for social impact assessment (SIA) and Environment clearances. CII feels that such a provision would be a time consuming exercise. Instead, public hearings for SIA and Environment clearances should be combined, as this would help reduce the overall project implementation schedule.

According to the LARR Bill, all new villages established for resettlement of the displaced persons shall be provided with suitable transport facilities which must include public transport facilities through local bus services with nearby growth centres and urban localities. CII feels that establishing transport facility on a continuous basis would lead to huge cost which might not be feasible.

Instead, local Governments should take the responsibility to provide public transport facilities to new villages established for resettlement of displaced persons.

The proposed provisions in the Bill say that the Collector shall make an award within a period of 2 years from the date of publication of the declaration and if no award is made within that period the entire proceedings for the acquisition of land shall lapse.

CII infers that in such situations, time and energy spent on the process could get completely wasted and lead to delay in project implementation. Instead, in such cases, Government should offer an alternative location identified by the requiring body.  

LARR Bill: A step forward, yet
industry has concerns

B Muthuraman ,immediate past president, CII and vice chairman,
Tata Steel and chairman,Tata International

What kind of role should the Government have in acquiring land for Industry?

Indian Industry is of the view that Government must fulfill its responsibility for economic development and employment generation by playing a role in industrial development. Planned industrialisation is essential for job creation and inclusive growth. Agglomerating land from numerous owners is not a task which the corporate sector can do effectively, especially in the absence of land records and with small, scattered land holdings.

CII would therefore recommend that the Government should acquire land, provide basic infrastructure and also provide for rehabilitation and resettlement of the displaced persons. This model has already been implemented successfully in acquiring and developing industrial estates by State industrial corporations such as MIDC, GIDC and HIDC from Maharashtra, Gujarat and Haryana, respectively.

What is meant by the clause 'Public Purpose' that is used to empower the Government to acquire land?

'Public Purpose' is a clause that delineates purposes for which appropriate Government is empowered to acquire land, either on its own or through its agency, according to provisions of the Act.

CII has always advocated that the clause 'Public Purpose' should include acquisition of land for potential use by private sector led industrial development. CII is therefore  happy to see that the LARR Bill 2011 covers acquisition of land in the public interest for private companies for the production of goods for public or provisions of public services.

However, the provision of 'consent of 80 percent affected families' imposed only on land acquisition for the private sector, appears to be discriminatory in nature. CII is of the view that in a democratic, liberalised economy where the private sector is playingan increasing role in the nation’s economic growth, there is no place for such differential treatment. If consent of the project affected people is sought to be introduced from the point of view of removing coercion, it appears that the Bill is implying that ‘coercion’ of people is acceptable for use of the land by the Government or by public sector but it is not acceptable when the land is acquired for use  by the private sector.

What is Industry’s overall view on the LARR Bill 2011?

CII welcomes the LARR Bill as positive, forward looking and comprehensive. It is the first ever attempt to combine all three aspects of land acquisition, resettlement of project affected families and their rehabilitation under a single legislation. Also the fact that the Government would continue to play a
prominent role in land acquisition process for industrial use, is indeed a welcome step. Industry hopes it will be a guiding legislation that will enable States to further strengthen their land acquisition processes and R&R provisions.

The industry is not opposed to adequate compensation to project affected families. In fact, compensation to project affected families should be fair and  comprehensive, so as to make their quality of life better and  their earnings higher, post land acquisition.

At the same time, there is a need to strike a balance with 'affordability' from anIndustry perspective. Too high a cost of land acquisition and rehabilitation and  resettlement will make the total cost for Industry prohibitive and could result in a slower rate of industrialisation, ultimately affecting the growth, employment and over all socioeconomic development.

Is Industry comfortable with the  compensation levels suggested by the Bill?
 
CII is deeply concerned that the provisions of the Bill will lead to a significant increase in the land acquisition cost. As per the provisions in the Bill, land compensation in rural areas is determined by first applying a multiplier of 2 to the land value; and then again adding a 100 percent ‘Solatium’. The principle of Solatium as per LA Act of 1894 was primarily to address the concern of undervaluation of land, done to avoid stamp duty. In essence, the 'Solatium' is no different from the 'multiplier'. There is no logic in applying both concepts, as proposed in the LARR Bill, as any one can take care of the issue of undervaluation.

CII has suggested that the Solatium is not required over and above the multiplier. In case the Solatium is to be retained as a continuity of the LA Act of 1894, then it may be reduced to 30% and the multiplier should be 1.5 instead of 2.0. As per CII’s calculations, the proposed provisions will result in land cost increasing by 3-3.5 times. This will severely affect the viability of industrial projects across the country and will ultimately result in loss of competitiveness for the Indian manufacturing sector.

Do you have any other concern regarding the Bill?

There are several issues relating to specific proposals on compensation of affected people or families. For example, the Bill does not differentiate between different categories of affected people such as those who lose land and those who lose livelihoods. Typically, when land is acquired, the affected families could lose their land,house, assets or livelihood or a combination of these. CII’s suggestion would be to clearly define different categories of affected families according to their losses and specify a suitable compensation package in each case. Of course, the compensation must be designed in such a way that the affected families are much better off than they were prior to the acquisition.

The Bill also stipulates that in cases where private parties directly buy land from owners, R&R provisions are to be made applicable for procurement of more than 100 acres land in rural areas and more than 50 acres in urban areas. This may not be appropriate since the land losers would already have protected their interest through price negotiation. A pplication of R&R provisions would only push the land price further upward. In such cases, provision of R&R should not be applicable to land owners who would, in any case, receive a premium on land value. Instead, a suitable R&R entitlement should be laid down for affected families who lose their livelihood as a result of such land acquisition.

The retrospective application of the Bill is also something that needs to be reconsidered. The Bill states that in cases of land acquisition where award under Section 11 of LA Act 1894 has not been made, the process would lapse upon enactment of the new Bill and land acquisition would have to start afresh. This would affect on-going industry projects.

The entire process of acquisition would have to be re-started, causing delays and cost escalation and ultimately affecting the viability of the project. CII has therefore suggested that all cases of land acquisition where the notification under section 11 of LA Act 1894 has already been issued and the process of award commenced, land acquisition cases should be continued as per the LA Act of 1894.

The provision that possession of Acquired Land would take place only after the entire compensation and R&R entitlements are disbursed is a matter of concern as it has been observed that the whole process of land acquisition can be stalled even if a very small segment of people refuse to accept the compensation.

Hence, the industry is of the opinion that the Collector should be empowered to take possession of the land after 80 percent  of the affected families have accepted and received the compensation.

Further, the imposition of certain restrictions on acquisition of irrigated multi-cropped land may hamper the industrial development of States which predominantly have multicropped land. At the same time, industries based on natural resources would also be severely affected as minerals occur naturally and hence their locations cannot be chosen.

The industry, therefore, feels that this provision should not be applicable in case of mineral extraction projects. Provision in the Bill stipulating return of the acquired land if not utilised for a period of 10 years may affect the future expansion plans of industries which grow over a period of more than 10 years due to their nature of activities.

Instead, CII suggests that the industry must submit a 'land use plan' and the provision of return of un-utilised land should be aligned to it, to be decided by a Committee under the chairmanship of the Chief Secretary of the concerned State, on a case to case basis.

Does CII have other suggestions for successfully resolving the issue of Land Acquisition in the long run?

Digitization of Land Records: Over decades, the land records have been maintained and upgraded manually on ad-hoc basis with hardly any focus on accuracy and authenticity. Archaic and un-authentic landare the biggest pitfalls and roadblocks in land acquisition and disbursement of compensation.

To streamline and bring transparency, CII strongly recommends speedy digitization of land records by State Governments and the availability of these records online. The digitization of land records, across all States, over a specified time period, with comprehensive scrutiny would help make land records transparent, tamper-proof and facilitate detailed planning of land use for industrial, agriculture and residential development.

Zoning of Land: Simultaneously with digitization, CII also recommends ex-ante zoning of land so as to have a clear mapping, identification and segregation of the land for various purposes, over a 100 – 150 year horizon. Updating, digitization and zoning of land records will be key for achieving success in the process of systematic development of industrial land.

Set up State Land Bank Corporations: CII recommends setting up of dedicated institutions for acquiring fallow, barren and unproductive as well as other land, ex-ante, for industrial purposes, as a transparent and viable solution to the problem. The job of these State Land Bank Corporations would  be to scientifically acquire large tracts of non-cultivable and other land, develop them as Land Banks for the future and have a transparent mechanism to pass them on to the private sector.

Land Acquisition , Rehabilitation & Resettlement

Adi B Godrej, CII president and Chairman, Godrej Group

The Land Acquisition and Resettlement and Rehabilitation Bill 2011 needs to be
critically reviewed, particularly the proposed acquisition process and cost aspects.
Both, delay in acquisition or unrealistic cost of acquisition, would adversely affect
the manufacturing sector in India.

Industry is in favour of adequate compensation and rehabilitation and resettlement.
However, there is a need to strike a balance between the compensation to project
affected families and industry affordability.

India has and can have enough
land and water for all its needs

Against this backdrop, Confederation of Indian Industry (CII) has welcomec the Land Acquisition and Rehabilitation & Resettlement (LARR) Bill 2011 as positive, forward looking and comprehensive, which is the first ever attempt to combine all three aspects - land acquisition, resettlement of project affected people and their rehabilitation. It would be a guiding Act for States to further strengthen Land Acquisition Process and Rehabilitation and Resettlement (R&R) provisions.

However, there are certain apprehensions amongst the Industry, especially those pertaining to compensation package and rehabilitation and resettlement (R&R) entitlements; consent of 80 percent of affected families; acquisition of irrigated multi- cropped land; return of unutilised land and retrospective applicability of the Bill. These would need to be addressed to help create a fair and equitable land acquisition mechanism.

CII believes that compensation to project affected families should be fair and comprehensive. It should enable the dispossessed to continue to lead their lives without any negative impact. Rather, it should improve the quality of their lives. At the same time, the compensation to be paid should be fair to the land acquirer. It should be 'affordable' from an industry perspective, as too high a cost of LARR will make the total cost prohibitive and could result in a slower rate of industrialisation, ultimately affecting growth, employment and overall socioeconomic development.

Similarly, clearances, especially environmental clearances, should not hamper the progress of projects.

Indian Industry is of the view that land acquisition should be facilitated by the Government to fulfill its responsibility for economic development and allow Industry to play its role in the development of the nation. A broader view that balances social imperatives with economic imperatives would go a long way in helping India achieve its goal of inclusive growth.

Chandrajit Banerjee Director General Confederation of Indian Industry

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