The Uttar Pradesh government has decided to make Life Insurance Corporation of India (LIC) an official partner in disbursing Rehabilitation and Resettlement (R&R) annuity package to landowners and farmers who have handed over their land to the state for development projects.
The government will sign an MoU with LIC to disburse the package for 33 years. This is the first time in the country that annuity disbursement has been outsourced to a financial institution in the country.
LIC has been selected as the disburser of the scheme through a competitive bidding process that took six months after the land acquisition and R&R policy was announced in September 2010. While the initial bidding process saw as many as five financial institutions evincing interest, including Allahabad Bank, LIC, ICICI Prudential Life, Bajaj Allianz and SBI Life Insurance, the final round saw LIC as the lone bidder.
?The reason why the other financial institutions backed out in the final stages of the bidding process was our firm stand on having performance guarantees from all the players. This is what most of the players had an objection to, while the LIC did not have any problem,? said an official. Under the policy, dispossessed landowners and farmers will be given an annuity of R23,000 per acre per year for 33 years, along with an additional amount of R800 increased annuity per year.