The political turmoil in Jharkhand, which is likely to result in the fall of the Madhu Koda-led UPA government by August 25, will cast its spell over industrial projects scheduled to come up in the state.

Companies as well as landowners planning to acquire or give up land for new projects are looking forward to the enactment of the rehabilitation & resettlement (R&R) policy, which the state Cabinet had, after several months of dithering, finally passed on July 16, 2008. Although the state revenue department did notify the R&R policy on July 23 and the document is due to appear in the Jharkhand gazette in a couple of days, industry doesn?t see much hope without an enactment in place and the state government acting as a facilitator in the land acquisition process.

?If they get the policy ratified by the assembly, it becomes a sort of an act and has more value,” said Nitin Madan Kulkarni, managing director of the Adityapur Industrial Area Development Authority. He said the policy, which is only notified, would become another document, which might or might not be adhered to strictly. Most of the new projects including those of Tata Steel, Essar Steel, Jindal Steel & Power Ltd (two projects), ArcelorMittal, Jindal South-West, RPG group, Bhushan Steel, Adhunik Steel, Visa Steel, Dempo Steel and Balaji Steel had till recently been waiting for the announcement of the R&R policy to initiate the land acquisition process in the right earnest.

With the survival of the Koda government looking a remote possibility, the land acquisition process is bound to face yet another setback despite an R&R policy being in place this time. The state has already been running behind schedule on the industrialisation front as several of the MoUs it has been signing with investors since 2004 have already come up for renewal without much progress having been made at the ground level.

Indirectly referring to the slow progress of its 12mtpa project in Jharkhand, compared with those coming up in Orissa and Chhattisgarh, Tata Steel managing director B. Muthuraman had recently said the state was losing out on the employment opportunity for its unemployed youth.

Experts say the industry will now have to wait for an Assembly election to take place and then a new and stable government to take charge.