To overcome problems of land acquisition and local resistance, the Jharkhand government has decided to create joint partnerships between gram sabhas, village-level administration, and industrial developers such as steel plants.
The decision, taken as part of the proposed Jharkhand Resettlement and Rehabilitation Policy, specifies that consent will have to be taken from villagers in future growth of the state, said a state official on the condition of anonymity.
The policy to make villagers a stakeholder in upcoming projects will be approved by the state cabinet within a fortnight, a decision propelled by the troubles faced by governments of states such as Jharkhand and Chhattisgarh in acquiring land.
Under the rehabilitation policy, options will be offered to villagers to take one-time-cash compensation, or exchange 50% of the money for employment to one member of the household.
The third option is to accept 50% of the cash and invest the other half in convertible shares in the company setting up the project.
The Jharkhand government has signed nearly 64 memoranda of understanding, worth more than Rs1.38 lakh crore, with 47 steel plants.
But investors in Jharkand face a tough reality on the ground: They need to secure 30,000 acres to set up projects. At present, the government has less than 20% of the land needed to parcel out to steel players, according to the official.
He said only about 12 of the 64 companies have been able to acquire land directly from villagers. These include Ballabh Steel and Kohinoor Steel.
“But this is not always easy and we have also initiated the process of creating land banks which the state had started initially,” said the bureaucrat, who was attending a steel summit in the capital this week.
Investors keen on setting up steel plants on the promise of iron ore in the state, which boasts nearly a third of the country’s total reserve, are getting worried.
“We will invest the money only if we get assurance of land,” said an executive of one company planning a 2.8 million tonne (mt) plant in the state. He would not be identified, citing the sensitive nature of land acquisition.
Across India, industrial development projects and land acquisition schemes are being stymied by village protests and local resistance. Still, the private sector says it plans to continue investments.
In Jharkand, the world’s largest steel maker Arcelor Mittal has already stated its interest in the Chiria mines in West Singhbhum district, and billionaire owner L.N. Mittal has publicly said that he won’t settle for less. The company has proposed setting up a 12 mt plant at the cost of Rs40,000 crore.
But the Chiria mines are already under litigation, with the Centre-owned Steel Authority of India and the state at loggerheads over first-claim rights. The next hearing of the case is scheduled for later this week in the Jharkhand high court. Sources said both governments are likely to iron out their differences in an out-of-court settlement.
Nearly 156 memoranda of understanding have been sign for steel plants across the country. But plagued by issues relating to mines, land and water, a huge requirement in steel making, hardly any large projects have been able to take-off.
For instance, a Tata steel project planned in Orissa’s Gopalpur district, was put off because of insufficient supply of water, despite having acquired 3,700 acre of land, says B. Muthuraman, managing director of Tata Steel. Now the land has been proposed for a special economic zone in joint partnership with the Orissa government.