Mumbai: In a major decision, the state cabinet on Tuesday approved a proposal to pay an additional 1% interest if there is a delay in payment of compensation for land acquired by the government.A government press release stated the interest rate will be 1% higher than the interest rate at which the Reserve Bank of India provides loans to commercial banks.An official said often considering the urgency of a project, it becomes necessary to take advance possession of land being acquired for various development projects and schemes. Since the land is handed over to the government before the award is decided under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (LARR) Act-2013, interest is paid to the affected person on the compensation amount for the period payment has been delayed. “Since there is a difference between this interest rate and the prevailing interest rate on bank loans, the state cabinet approved an amendment to Section 72 of the LARR Act, 2013. Accordingly, interest will now be paid at a rate 1% higher than the rate at which the RBI lends to commercial banks,” the official said.The state government is in the process of acquiring land for Mumbai 3.0 to be spread over 323.44 sq km across 124 villages in Uran, Panvel and Pen tehsils. The government is also preparing to acquire around 15,000 hectares for the Eastern Vidarbha Industrial Corridor. It is also acquiring land for the Vasai-Virar multimodal corridor, Vadhvan Port, Shaktipeeth Expressway and other infrastructure projects.Often the delay in awarding compensation is because of bureaucratic red tape, lack of coordination between the local revenue department and other departments as also delay in allocation of funds for land acquisition, said officials.
