The Hindu Business Line : Displacement, the dilemma of development

Very seldom does change benefit everyone. There are usually some winners and some losers. Putting in place a credible democratic institutional structure to look after the rehabilitation and resettlement process is the need of the hour.

The recent protest fast by Medha Patkar and the subsequent Supreme Court ruling on the Narmada Dam Project have again brought to focus the festering issue of development versus displacement.

Very seldom does change benefit everyone. There will usually be some winners and some losers. Change is considered socially desirable if the gains of the gainers are more than the loss of the losers so that society as a whole benefits in some sense. But there are several problems here.

Most important, it should not be a hypothetical exercise. The compensation has to be real. In other words, the losers, after receiving the actual compensation, should be better off than they were before the situation changed. In addition, the gainers, after paying the compensation, should also retain some gains. Only then will it be a win-win situation and the change would get support from all quarters.

Compensation complexities

But it is not that simple in the real world. There are many complex issues in designing and implementing a proper compensation scheme. First, the true gainers and the losers need to be identified. For instance, the supposed beneficiaries of the Narmada dam would be spread over several States who would gain from the greater availability of water and electricity due to the project. The losers would be the people who would be displaced as a result of land lost to the reservoir. As the height of the dam is raised the number of people displaced would also increase. The supporters of the dam would have an inherent interest in overstating the number of gainers and understating the number of losers just as the critics would have the opposite incentive.

One possible solution is to have an independent body to identify the winners and the losers. But who is `independent'? Any committee appointed by the government interested in pushing the project would be suspect in the eyes of the opponents to the scheme. Moreover, the government would like to choose experts whose views it knows are favourably disposed towards the project. Experts, as we all know, often differ widely in their estimates. More so where the gainers and losers would be spread over so wide an area, extending across several States, and most of the impact would happen in future. An ex-post cost-benefit evaluation of a project (such as the Bhakra Dam) is easy but the Narmada Dam case is one of ex-ante evaluation, which is more subjective and hence prone to controversies.

Quantifying gains, losses

Second, to quantify and evaluate monetary gains and losses and thence decide on the quantum of compensation. For example, one needs to estimate the amount of additional electricity and water to be generated by the project and the prices at which these should be valued. In addition, gains going to the weaker sections ( such as poor tribals as against rich industrialists) as well as losses borne by them may have to be assigned a higher social weightage while computing social gains and losses from a project.

One big problem is the valuation of land and other assets, which the displaced people lose as a result of the project. Should land be valued at some government-recorded rate that is usually far below the market rate? Even if the market price is used, should it be the pre- or post-development? Once an area develops along with the necessary infrastructure (power, transport, communication systems etc), land prices go up many times. One recurring complaint from the displaced is that at best they are offered the pre-development market price. So, they feel cheated.

The issue gets more complicated once one tries to value other losses. For one, it is not possible for most displaced people to buy (or for the government to provide) an equivalent plot of land at another place for the same price. Such land may simply not be available. If he is accustomed to growing a particular crop and that was his only means of livelihood, then to the farmer it implies a loss of livelihood. So, most agree that mere monetary compensation is not enough. It is also nearly impossible to arrive at a quantifiable monetary measure of the cost of damage to environment and ecological balance as the result of a project.

The alternative

The next question: How to provide an assured alternative livelihood? Some would suggest providing employment to these people in the project or some related activities. But this is easier said than done. Many of the local people do not have the skills required for an industrial job. Further, how to compensate for the loss of their "way of life"?

It is, indeed, a tragedy when a tribal village is broken up and the inhabitants are resettled at several places many miles apart from one another. No amount of monetary compensation can offset the loss of what the people have known all along to be part of their life and existence. At best, it can be stipulated that the displaced people from one village should be resettled, as far as possible, at one place.

Some have also suggested, in connection with the Narmada Dam Project, that the displaced people or their assigned contractors can be provided exclusive rights to fishing, water sport activities and tourism services in the reservoir and the surrounding areas.

Compensation to be liberal

Basically, the compensation should be as liberal as possible, given that these people did not voluntarily opt for their displacement in return for any negotiated compensation. At least monetarily they should be made better off compared to their income and wealth before the change. The loss of their traditional "way of life", unfortunately, is a price of development, which many people have had to bear throughout history.

Finally, proving the claim to compensation and actually getting it within the stipulated time frame. Many tribals do not have proper land titles and hence are not even legally entitled to compensation.

Entry of middlemen

Taking advantage of the situation, unscrupulous middlemen enter the scene and promise to get the tribals compensation from the government, provided they get a cut, often quite large.

Further, the longer it takes to get official compensation and resettlement, the more difficult it becomes for the poor affected people to stick together and fight for their rights. At some point, the continuing frustration leads desperate people to seek redress in the form of violent protests and even armed revolts.

India is aiming for a sustained 8-10 per cent growth rate. For this it will need more dams, more roads, more power plants, more mines, more industrial townships and quickly too. But it is not possible to narrow the huge infrastructure deficit without resolving the displacement and compensation issues that are intimately tied up with it.

Lax decision-making process

The Narmada Dam has already been delayed by some 20 years, leading to massive cost overruns, unrealised benefits and lingering social discontent, giving a bad name to administration of development projects, sending wrong signals to prospective investors. Putting in place a credible democratic institutional structure to look after the rehabilitation and resettlement process is the need of the hour.

(The author is a Professor of Economics at the Management Education Centre, Heritage Institute of Technology, Kolkata. He can be contacted at alokray15@yahoo.com)

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