Land acquisition raises a lot of passion. The Modi government had to beat a hasty retreat on its proposal to exempt five types of projects from mandatory social impact assessment and consent from 70 percent of the affected people in case of PPP projects and 80 percent in case of private sector projects. But being on the concurrent list, state governments have been evolving their own unique laws. Haryana’s law became known for its annuities in addition to one time compensation.
What makes the Chandrababu Naidu government in Andhra Pradesh’s scheme spectacularly unique and worthy of emulation on a broader front is its win-win character. Farmers and others in the Vijayawada-Guntur region were incentivized to wholeheartedly surrender their lands for building the new state capital, Amravati. In addition to the monetary compensation, a part of the land acquired would be returned back after the specified number of years duly developed. It is common knowledge that upfront compensation or compensation in installments turns out to be wholly inadequate in retrospect when the project town starts buzzing with activities.
This obviously makes one rue his decision to have sold out although in a compulsory acquisition one has to comply whether he likes it or not so long as the requisite majority has given its consent. The thumping success of the method is reflected in the fact that the Andhra Pradesh Capital Region Development Authority got 30,000 acre as against the target of 33,000 acres (Source: The Indian Express). And as far as the specifics of compensation is concerned, it depends on the type of land. Website scroll.in gives a lively example though. A farmer surrendered his land and he would get Rs 30,000 per acre for ten years and also 1,300 square yards (one fourth of one acre) after it is duly developed. Out of this 1,300 square yards, 300 can be used for commercial purposes to eke out livelihood and 300 for residential purposes.
One alternative could be revision of compensation say every five years but this will rub the acquirers on the wrong side and in fact put them off because the project would always have the proverbial Damocles’ sword hanging over it. In the event the Andhra model is an excellent model.
The land returned lends itself to diverse uses. One can start an ancillary unit if the project is industrial but Amravati is not one but it is bound to throw up a huge demand for services. Restaurants can be set up, ATMs can spring up, rent can be earned from banks, and photocopying centers can be set up and so on. All these and more can in fact generate as much cash for the victims of compulsory acquisition as the compensation itself. In other words, earnings and capital gains from a small swathe of land could well be equal to the original compensation itself even on present value terms.
The Andhra model goes by the name of land pool. The new capital Amravati could come up in a record time of one and half years thanks to winning over resistance due to the inherently win-win nature of the model. Indeed resistance vaporizes when the potential victims’ feelings are assuaged with meaningful compensation even if a part of it is going to materialize in the future.
It is wrong to believe that only the here-and-now compensation appeals to victims of compulsory acquisition. People have the native intelligence to appreciate the significance of future compensation and are thus willing to bide their time.
One hopes Chandrababu Naidu whispers some home truths about land pool to his ally Prime Minister Modi while he inaugurates the new capital although intuitively Modi must already be aware of it, keeping as he does his ears to the ground. What Modi must do is to propagate the concept to other states especially the BJP ruled ones. That would rob Rahul Gandhi of a plank to rubbish Modi with.
[FP]
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