After receiving the lone bid for disbursal of the rehabilitation and resettlement (R&R) annuity from the Life Insurance Corporation of India (LIC), the Uttar Pradesh government is now in talks with the public sector behemoth for a memorandum of understanding (MoU) and sought detailed proposal from it.
In the formal MoU proposal, the company is expected to put forth the financial and legal clauses as well as its own internal customer mechanism and Irda clauses relating to customer satisfaction, so as to reassure that the interests of thedispossessed farmers will be protected.
Talking to FE, industrial development commissioner VN Garg said ?LIC is best suited to the needs of the state government and the farmers among all the available players?.
Indeed, LIC is armed with the sovereign guarantee clause, which essentially means that the Centre guarantees the commitments in case the Corporation is not in a position to do so, is the best player to implement the sensitive scheme. Also, with the LIC being a trusted household name and already handling a business that entails long-term handling of finances, it would be easier for the farmers, too, to build confidence about the fact that the commitments on annuity would not be dishonoured and they do not run the risk of being duped, opined another official.
The detailed MoU proposal is expected to be discussed with senior officials of the state government on May 31, after which the government will go ahead a sign the MoU.
It may be mentioned that the state government has been working on outsourcing the annuity disbursal to land owners whose land will be acquired for development initiatives in the state as per its new Land acquisition and R&R policy. As per this policy, dispossessed landowners and farmers will get an annuity of R20,000 per acre per year for 33 years, along with the additional amount of R 600 increased annuity per year.
The annuity, or livelihood allowance as it is also called, is in addition to the compensation that the farmers will get for the land and it is, in essence, ensuring the amount that the farmer would have roughly earned from tilling that land every year.