New Delhi, May 31 (IANS) Opposing the National Advisory Council's (NAC) proposal to disallow private companies from buying land directly from owners if more than 400 families need to be displaced, industry lobby FICCI Tuesday said the proposal would create room for bias in land acquisition.

The Federation of Indian Chambers of Commerce and Industry (FICCI) has suggested for adoption the Haryana model which compensates land owners by providing payment of annuity in the form of royalty for a period of 33 years.

The NAC had proposed that private companies should not be allowed to buy land directly from the owners if their project requires more than 400 families to be displaced, and in that case the government should buy the land on behalf of the industry.

"FICCI feels that the proposal would be counter-productive at this stage of development in the country and would further provide room for bias in acquiring land. It would also result in sub-optimal allocation of land resources in the country," the industry lobby said in a statement.

FICCI has also suggested that the industry should follow a market based system for acquisition and pay the market determined price to land holders, which would enable land owners to sell the land voluntarily thus also preventing forced displacement.

It applauded the provision in the draft bills on land acquisition pending in parliament that requires the industry to acquire 70 percent land at market rate.

"This will greatly reduce the burden on the government and reduce uncertainty as only the remaining 30 percent would need to be acquired by the state. The government could also consider making some local employment mandatory within the project that is established on the acquired land," the statement added.

Currently the Indian manufacturing sector is growing at over eight percent and is likely to grow to 12-14 percent in the coming years. Also, the government is looking at increasing its contribution in the country's gross domestic product from the current 15-25 percent in next 10-15 years.

Therefore, land would be needed to put up manufacturing capacities that are necessary to generate the required employment as an increasing number of people shift from agriculture to the manufacturing sector.