New R&R policy seeks to please both displaced and developers

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New Delhi, Oct 11: Virtually painted into a mid-term poll corner by the Left over the Indo-US nuclear deal, the UPA government on Thursday shifted into populist gear. It approved the much-awaited National Policy on Rehabilitation & Resettlement (R&R), cleared a productivity-linked bonus for railway staff and decided not to increase retail price of petrol or diesel. It also extended the subsidy on LPG and kerosene for another three years.

The R&R policy gives landholders the option of taking 20% of the rehabilitation grant as shares in the projects that displaced them. It also eases the rules for buying land by corporate India by amending the Land Acquisition Act of 1894. This has expanded the definition of public purpose to mean companies, too.

The policy comes in the wake of several violent protests, including those at Nandigram in West Bengal, against forcible land acquisition for industrial projects. The policy, replacing the earlier one of 2003, was cleared at a Cabinet meeting chaired by PM Manmohan Singh.

At least one person from each affected family would get preference for jobs in new projects, subject to vacancies and suitability of the candidate. All dislocated families, including landless ones, will get a house in compensation.

Developers like DLF and Raheja group said their compensation package was more liberal than the new policy. However, consultants like Rajiv Chugh, partner, E&Y, said the policy would clear the obstacles for SEZs. Over 500 SEZ proposals have received government approval so far.

The compensation package specifies that subsequent resale of land must plough back 80% of the net unearned income to the original sellers. The government can also give prior approval for hiking the proportion given as shares to 50% of the grant. To ensure inflation does not erode the benefits, all monetary compensation has been linked to the Consumer Price Index.

A strong grievance redress mechanism has also been prescribed. There will be a National Rehabilitation Commission, while at the district and project levels would be standing R&R committees as well as an ombudsman. The committees will have members from the affected families, voluntary organisations, panchayats and elected representatives.