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Karnataka cabinet approves hike in aid for land acquisition
Though the decision was taken in the cabinet, there can be no official briefing since the Karnataka legislature is currently in session.
The Basavaraj Bommai-led Bharatiya Janata Party (BJP) government on Friday decided on higher compensation to be paid for land acquisition for industries in a bid to bring down long-wind litigation that has led to the loss of investments for the southern states.
The government decided to pay compensation as per the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act of 2013.
“Whenever we look to acquire land, the people who have lost this land approach the courts seeking higher compensation as per the 2013 act. We decided to bring the amendment to avoid these litigations,” said a cabinet minister, requesting not to be named.
Though the decision was taken in the cabinet, there can be no official briefing since the Karnataka legislature is currently in session.
The decision comes at a time when there have been growing interest in Karnataka to attract more investments into the state to overcome the slowdown, hardships on account of the Covid-19 pandemic-induced lockdowns, increasing revenue streams as capital inflow from the Union government dries up in the goods and services tax (GST) regime.
The delays in procuring land for industries under Section 109 of the Karnataka Land Reforms Act had cost Karnataka a chance to convert investments totalling over ₹39,000 crore and a chance to create over 80,000 jobs between 2013 and 2019, Mint reported in November 2019.
The Act has since been amended along with other changes to industrial and labour laws to make it more attractive for investors to fund projects in Karnataka.
The state government has also decided to hold the Global Investors Meeting (GIM) in November this year, which has not been held since 2016 due to the volatile political climate.
Karnataka has found it difficult to convert interest into actual investments due to allegations of corruption and the tedious process for securing requisite clearances.
“Since the beginning of the pandemic in March 2020, Government of Karnataka has cleared more than 520 projects of industries with a total investment of Rs. 77,000 crore, spanning multiple sectors till July last year.
“Additionally, there are proposals and MoUs submitted worth Rs. 23,000 Crores, thus taking the total investment to Rs. 1 lakh Crores,” BS Yediyurappa, the chief minister of Karnataka had said in July last year.
In Friday’s meeting, it was decided that compensation be increased as it would discourage fewer people to approach the courts.
Karnataka will face an additional financial burden to acquire at a higher price, while other states continue to dole out concessions, including free land for new industries to set up shop in their respective regions.
Roughly, land acquired in urban areas gets about twice the market value, and those in rural areas get around three or four times the price, according to the 2013 act.
