Group of ministers (GoM) headed by Sharad Pawar has approved the modified land acquisition Bill called the Land Acquisition, Rehabilitation and Resettlement (LARR) Bill to govern the land transfers in the country.

The industry is not happy with the new bill as the cost of production will rise significantly. Larsen & Toubro said that the bill will result in an increase of Rs 4,500 crore for setting up a new airport construction project.

The bill states that the consent of two-thirds of the land owners will be required before land acquisition for projects. The earlier rules require 80 per cent of the land owners. The bill also states that the compensation to land owner will be twice the market value of land in urban areas and four times the value of land in rural areas.

The issue over defining the “value of land” has created some concerns as there is not clear way to determine the value of the land. Landowners often demand very high prices of their land when it is known that the land is being acquired for commercial purposes.

It is believed that most political parties have welcomed the bill and it is most likely to be passed in the parliament.