Govt readies policy on land compensation

Govt readies policy on land compensation
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First Published: Fri, May 04 2007. 11 58 PM IST
Updated: Fri, May 04 2007. 11 58 PM IST
New Delhi: The government has decided to give people who sell their land for industries or other projects the option of getting equity stakes in the ventures that acquire their land. In addition, wherever possible, it has also decided to compensate farmers who give up their land by providing for equivalent land elsewhere.
These proposals are part of a new relief and rehabilitation policy being framed by the rural development ministry and which will be sent to the Union cabinet for approval. The new rules are being put in place after the Prime Minister, in the light of some high-profile conflicts over land acquisition in West Bengal, promised a new rehabilitation policy.
“To address the discontent of farmers and others who had refused to part with land for industrial projects in places like Nandigram and Singur, the new policy has redefined who can apply for displacement compensation. And up to 20% of this rehabilitation grant can be taken in the form of shares of companies that acquire land,” said a government official close to the development who did not want to be named.
The new policy widens the compensation to include those losing livelihood and houses. Consequently, even those involuntarily displaced by land acquisition, including landless labourers, contract workers, shopowners and their employees, will be eligible for compensation from the company acquiring the land.
The new policy also does not specify the minimum number of people who will need to be displaced for a region to qualify for compensation and has also laid down that the entire amount must be paid before people actually relocate.
The government has decided not to play any role when companies acquire land, but it has decided to monitor such efforts. A national rehabilitation commission and a national monitoring committee, supported by a national monitoring cell, will be set up by the ministry. All Union ministries with major projects will have to set up new internal oversight committees.
The proposed policy is being given final scrutiny by the law ministry, which is also examining the Land Acquisition Amendment Bill, 2007, that is also to come up before the cabinet. Rules under this Act will determine the amount of compensation that can be claimed by those displaced.
The rural development ministry’s final draft of this policy defines a series of conditions and sub-conditions that will determine the price of land being acquired. For instance, land acquired for a public purpose may not be transferred for any other purpose. Once acquired, the land must also be put to its intended use within five years.
The compensation has been fixed at a sum not less than a floor price fixed by the state government; or the average of higher prices paid in 50% of land sales in the last three years, whichever is higher. The market value itself will be determined on the basis of whether the original land-use is being altered, so that sellers can benefit when the prices escalate after land is converted to commercial use.
“Much of the disputes in land acquisition are because it is skewed against sellers. With fair compensation rules, many of the disputes could cease,” said M. Madhavan, an expert with PRS Legislative Research, a non-government body that specializes in policy research. He, however, pointed out that the Centre still needed to make it clear whether state governments will actually step away from the land acquisition process. Land is a state subject under the Indian Constitution.
As in other sectors, such as telecommunications, where disputes go to a dedicated tribunal before parties can approach a court, the government has proposed that disputes under the Land Acquisition Amendment Bill should also go to a land acquisition compensation disputes settlement authority, to be created in each state.
For inter-state projects, a similar inter-state authority is to be set up. If the dispute is not resolved, then the parties can try the court system.
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First Published: Fri, May 04 2007. 11 58 PM IST
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