The Hindu Business Line : Compensating those displaced

The recognition that the rehabilitation and resettlement of people displaced by a development project goes beyond paying cash compensation to those owning land is an important aspect of the latest Cabinet decision on the subject. But it is far from certain that the initiative will make for a much smoother process of acquisition of private land for economic development. The new policy, no doubt, recognises the claims of all those whose livelihood is affected by a project to a just and fair resettlement and rehabilitation. But the official commitment is also hemmed in by many caveats. Thus the ‘land-for-land’ promise is subject to availability of Government land. And the promise of employment in the new project for those affected is subject to the candidate’s suitability, availability of adequate vacancies, and so on.

The policy also speaks of an oversight mechanism to monitor resettlement and rehabilitation efforts from the project officials upwards to district, State and national levels, culminating in a National Commission on Resettlement and Rehabilitation. While this is, no doubt, a reflection of the Government’s sensitivity to the human dimension of the problem, there is a danger that the redressal of grievances of the project-affected might be bogged down in layers of scrutiny with an independent judicial review being held hostage to administrative processes. The Government’s proposal that 80 per cent of any future gains on land transfer should be shared with original landowners or their heirs is yet another example of noble intentions being fraught with practical difficulties. The subsequent transfer may happen decades after a project was conceived of and the land acquired from the original owners. An industrial undertaking selling its assets, including land, on a ‘slump sale’ basis as part of a business exercise will find it difficult to apportion a part of the consideration as applicable for the land that is also being transferred. And this apart from the challenge of tracing the legitimate successors of the original owner, especially in the event of a succession dispute.

The idea of giving landowners the option of taking 20 per cent of the compensation in the form of shares in the project company is equally hare-brained. The question is whether a marginal farmer surrendering a few acres of land should really park any portion of his wealth in an asset as volatile as equities. On the other hand, giving the imprimatur of official policy might just give an unscrupulous promoter the licence to settle a part of the consideration in kind, which may turn out to be worthless pieces of paper, given the standards of corporate governance some companies adopt.

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