In Congress-ruled states, big infrastructure or industrial projects will have to make an annual payment of Rs 15,000 per acre to farmers selling land to them. This will be over and above the price of land to be paid at the time of buying. The annual payment will continue for 33 years.
The Congress high command has given the direction to these states to make land acquisition for big projects easy and to ensure a recurring income to farmers losing their homestead.
Such a policy is already in place in Haryana, which is hosting the country’s biggest special economic zone (SEZ) being developed by Mukesh Ambani’s Reliance Industries at a cost of Rs 40,000 crore.
“The experiment in Haryana is a success. We plan to take the formula to other states,” a Congress Working Committee (CWC) member told Financial Chronicle.
Andhra Pradesh and Maharashtra may be the first states to implement the directive. In both the states land is being bought frantically for big projects. Delhi-based real estate firm Unitech is aggressively buying land in Andhra Pradesh; in Maharashtra Reliance has a number of big projects for which it needs huge tracts.
Does the annual payment imply an additional burden on the companies? “Not quite,” says Unitech managing director Sanjay Chandra. “While buying land, the interests of farmers should be of prime concern. It helps in the smooth roll-out of projects,” he says.
Over 100,000 acres of land is needed for big development projects that are coming up in various states. In Maharashtra, Hindustan Constructions, HDIL and IVRCL, besides Reliance, are developing projects such as highways, SEZs and industrial townships.
Similar projects are being executed in non-Congress states also. For example, Adani and Punj Lloyd have large projects in Gujarat; so have Unitech and the Salem group of Indonesia in West Bengal.
In the past, government-owned companies attempted a similar formula in the rehabilitation packages for farmers selling land.
For instance, Coal India (CIL) last year proposed a regular income scheme for farmers — in the form of instalment calculated by dividing the land cost by the number of years over which payments were to be made.
CIL chairman Partha S Bhattarchaya told Financial Chronicle the company was planning amendments to its existing rehabilitation and resettlement policy to make the project affected people stakeholders in the project.
As far as payment in installment is concerned, Bhattarcharya said, “We will leave it to them (those who have to be rehabilitated) if they want compensation in installments or as one time payment. It will be a flexible policy.”
The new policy is a clear attempt by the Congress to mobilise farmer support in run up to the next general elections. It is based on the calculation that moderately productive land in any part of the country yields an average annual return of Rs 12,000 to Rs 15,000 per acre to a farmer.
“We have ensured that the Congress states allow industrial projects only on non-cultivable land or land that does not yield much return,” the CWC leader said. Recently, the Congress also came up with a suggestion that 10 per cent of land taken over for a project should be given back to farmers on completion of the project. This is an extra over and above the normal resettlement and rehabilitation package.