New land law makes affordable homes a mirage: Analyst

MUMBAI: Even as the new land law is aimed at providing fair compensation to those whose land is acquired, besides bringing transparency into the real estate sector, it may not be able to realise the dream of offering cheaper homes, according to an industry analyst.

"The new land law intends to settle three main challenges related to land-acquisition, rehabilitation and resettlement. But it is certain that the new law is going to increase the nominal cost of land and projects that may come up on them," a personal finance service provider InvestCare director Ajit Mishra said.

With the new land law in place, land acquisitions shall accommodate compensation and entitlements without limit to number of claimants, which is both good and bad, he said.

"It is good because with clear compensation model in place, the chances of lemon deal would be less. The bad part is the open-ended provisions for entitlement, which is likely to make even a fair deal struggle without end," he said.

The law mandates consent of at least 80 per cent of the project affected families prior to acquisition along with adequate compensation and rehabilitation to such families.

"The term affected is an open-ended invitation for anyone to claim benefits during the lifecycle of the project. The need of the hour is to form policies to offer cheaper home to poor. With the new law, the dream perhaps will never be realised," Mishra added.