The Bill, which was passed by the Lower House of Parliament on Thursday, will replace the British era's Act of 1894. (Agencies)
Companies who want to acquire land for industrial use will be required to pay up to four times the prevailing market value in rural areas and twice the market price in urban areas.
The Bill also stipulates mandatory consent of at least 70 percent of people for acquiring land for PPP projects and 80 percent for private companies.
"Several provisions will have adverse consequences on the industrial development of the country, which is already in bad shape. It is completely a retrograde step," former Ficci President R V Kanoria said.
In a statement, Ficci said the Bill may make key factor of production for manufacturing scarce and expensive.
"This certainly doesn't augur well for manufacturing. Cost of land will go up significantly. Process of acquiring land will also get stretched," it said.
A senior economist Rajiv Kumar said the biggest losers of the proposed legislation will be the young generation looking for jobs, due to slow pace of industrialisation.
"It is a massive set-back for industrialisation and urbanisation of the country. It will further push our industries 10-years back," Kumar added.
Infrastructure major Hindustan Construction Company (HCC) Chief Operating Officer Rajgopal Nogja said the bill will further hold up infrastructure projects.
"Securing consent of 70-80 per cent of land owners may take 3 to 5 years...it will make land acquisition a herculean task," Nogja added.
CII said the industry has serious concerns over the Bill as it may increase the cost of land acquisition by 3-3.5 times, making industrial projects unviable.
"At a time when major projects are stalled and India's global competitiveness is eroding, a more facilitative land acquisition process would have helped in restoring investor sentiments," CII President S Gopalakrishnan said.
Mega players including steel major ArcelorMittal (in Orissa) and Posco (in Karnataka) have pulled out their projects from India mainly due to land acquisition problems.
CII said the resettlement and rehabilitation cost is also likely to go up by about 3 times compared to the prevailing practice.
The Bill, which was passed by the Lower House of Parliament on Thursday, will replace the British era's Act of 1894.