Industry bodies, while generally welcoming the need for fresh legislation on land acquisition, complain that the Land Acquisition, Rehabilitation and Resettlement Bill, 2012 passed by the Lok Sabha on Thursday will increase costs.

H.V. Harish, president of the Bangalore Chamber of Industry and Commerce (BCIC), said although the new Bill appears to be “farmer friendly,” it is “anti-growth and anti-manufacturing.”

He pointed out the new Bill proposes that at least 80 per cent of the landowners need to give their consent for a private project and in the case of projects launched in public-private partnership (PPP) mode, at least 70 per cent of the landowners need to give their consent. “This discretion should be done away with. The rules should be same for private as well projects under PPP,” Mr. Harish said.

“Although we welcome the idea that farmers ought to paid a fair price for the land they sell, we fear that it will affect growth,” he said. Referring to the provision that acquisitions made in the last five years could be reviewed with “retrospective effect”, he said it was another “worrying feature”. The BCIC represents the interests of medium and large businesses.

The Federation of Karnataka Chambers of Commerce and Industry (FKCCI), which represents the interests of smaller business entities in the State, fears that the proposed legislation will not only increase the cost of setting up businesses but also lead to diversion of fertile agricultural land for business activity. “The cost of establishing a new industrial unit will increase by 300–400 per cent,” said R. Shivakumar, president of the FKCCI. “The new provisions may also affect productivity in agriculture because of the diversion of fertile land to industry,” he contended.