Frost & Sullivan’s whitepaper “Mega Trends in Indian Logistics Sector 2015-16”, highlighted Revised Land Acquisition Act as one of the major factors expected to significantly impact growth prospects of the Indian logistics sector. The other notable trends being GST, enhancing regional transport links in South Asia and impact of ecommerce on logistics sector. Opines Srinath Manda, Program Manager, Transportation & Logistics Practice, Frost & Sullivan, “Logistics Service Providers (LSPs) need to understand the logistics user industry needs emerging from the impact of these trends to tap the opportunities”.
The process of land acquisition is an extensive one involving social impact assessment survey, preliminary notification stating intent for acquisition and a declaration of the said acquisition along with compensation to be provided by a certain time. The highlights of the Land Acquisition, Rehabilitation and Resettlement Act, 2013 include the following:
• Compensation for owners of the acquired land to be four times the market value for rural areas and two times for urban areas.
• All acquisitions to require rehabilitation and resettlement for the people affected by the acquisition.
• In case of acquisition by private companies or public private partnerships, consent of 80% of displaced people to be required.
Currently, the foremost areas of concern are:
• The government can temporarily acquire land for a maximum of three years without any provision for rehabilitation and resettlement.
• In case of acquisition by private companies or public private partnerships, consent of 80% of displaced people to be required. However, such consent is not required by PSUs.
• More accuracy in case of under-reporting of prices in land transactions.
• Lack of uniform central policy on rehabilitation and resettlement.
A direct impact of the Revised Land Acquisition Act would be efficiency of most infrastructure projects including those from logistics sector as it would benefit developers of logistics infrastructure with projects completed quickly and new projects expected to be launched. India’s leading logistics solutions provider, Gati, for instance, recorded an upsurge of 164% year on year ecommerce business revenue in 2014-15, building last-mile fleet of 1,350 vehicles covering more than 20, 000 pin codes over the last three years alone. So, in a nutshell, the terra firma of logistics providers’ growth depends a lot on the Revised Land Acquisition Act.