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his project study is based on the topic Rehabilitation and Resettlement of displaced person due to development, so first of all we need to know what is Rehabilitation and Resettlement? Rehabilitation is a program that helps a person who is recovering from illness or injury to regain as much function as possible. The aim is for clients to become as independent as possible despite his/her disabilities. Rehabilitation also aims to teach strategies for ongoing disabilities. Resettlement is a process with a start and a finish and as a discrete area of work separate from generalist hostel work, from counseling, key working, from outreach and from long-term tenancy support work. It does link in with these areas of work but needs to be understood as separate from them. We could say that resettlement support is where the client is still on the learning curve. At the point at which this levels out, and is just maintenance support it becomes housing, or tenancy support.

Types of displacements and magnitude:

1-      Disaster related displacement.

2-      Development related displacement.

3-      Conflict induced displacement.

What is disaster related displacement? Disaster may be natural as well as man made for example Tsunami and Bhopal gas tragedy. This may also happen due to ever growing population, the vast disparities or in income, rapid urbanization, increasing industrialization development within high risk zone, environmental degradation and climate change. 

What is development related displacements? Mega development projects like construction of dams, industries, highways and roads resulted in forced displacement of the people. It has been found that usually it is the poor people who face the consequences of such projects more because their livelihood, habitat and assets are affected. Where “involuntary resettlement” has received public attention, either through NGOs or media intervention, the state administration has responded. In most of the cases such displacements have resulted in loss of livelihood and shelter. More than 1.4 million people have been displaced from their ancestral land and deprived of traditional livelihood in just four states[1] in India in the country’s drive for economic growth, according to the study conducted by the NGOs Action aid, the India Social Institute, and Laya.

Following are some examples in which NHRC received complains and expressed its concern in cases of displacement as a result of development projects

i)                    Bargi Dam oustees in Madhya Pradesh

ii)                  Kabini Reservoir Project, Karnataka

iii)                Bandipur National Park- Project Tiger

The Special Economic Zone Act, 2005 has been passed with a view to promote foreign investment, export oriented growth and the need for a level playing field for domestic enterprises and manufacturers so as to be competitive globally. Several civil society groups, activists and organizations have expressed the fear that this process could lead to acquisition of agricultural land causing large scale displacement of farmers in the name of industrialization. Hence there is a need to provide suitable relief and rehabilitation package, including giving stakes to the displaced persons whose land has been acquired for setting up of SEZs. In the state of West Bengal, large scale violence took place in March and November 2007 on the issue of proposed land acquisition for setting up a mega chemical hub and a Special Economic Zone covering about 10,000 acres of land in Nandigram and adjoining areas. The commission took suo motu cognizance of the case and not only called for report from the State Government but also sent its own investigation team.

What is conflict induced displacement? According to non- governmental organizations, “there are over 6, 00,000 conflict induced IDPs [2] in India. The cases relating to relief and rehabilitation of Kasmiri Pandits and victims of Gujarat riots in 2002.

Section 3(b) of the Rehabilitation and Resettlement Bill, 2007 defines “affected family” as

i)                    a family whose primary place of residence or other property or source of livelihood is adversely  affected by the acquisition of land for a project or involuntary displacement due to any other reason,

ii)                  any tenure holder, tenant, lessee or owner of other property, who on account of acquisition of  land (including plot in the  abadi or other property) in the affected area or otherwise, has been involuntary displaced from such land or other property,

iii)                any agricultural or non agricultural labourer, landless person[3], rural artisan, small trader or self employed person; who has been residing or engaged in any trade, business, occupation or vocation continuously for a period of not less than five years in affected areas preceding the date of declaration of the affected area, and who has been deprived of earning his livelihood or alienated wholly or substantially from the main source of his trade, business, occupation or vocation because of the acqutition of land in the affected area or being involuntary displaced for any other reason.

Development caused displacement generates varied responses from different sections of society and it also creates a differential impact on the lives of people. It is generally believed that development efforts, which does not leave majority of its people worse off and promotes health, education and income could be regarded as participatory. But most of the development projects operate in totally opposite direction where majority of the project affected families are left to fend for themselves with poorly planned, badly executed, inappropriate and inadequate rehabilitation plans. The resettlement and rehabilitation for them becomes all the more difficult in the absence of state level policy and legislative mechanisms. This is the case of India where compulsory acquisition of land for public purpose particularly for infrastructural and industrial projects in public and private sector has aggravated the already existing inequalities and is instrumental in uprooting people from their natural habitats both in the pre and post-colonial periods. With globalization and trade liberalization, the increased demand for land has provided further boost to the miseries of displaced persons evicting them from their homes and forcing them to give away their assets and means of livelihood. Women are the worst affected among the displaced people. Being the otherwise most discriminated and vulnerable, displacement add to their already existing miseries. Development process thus has brought forward the biggest challenge of resettlement and rehabilitation of the persons displaced by the development projects. With a long history of displacement complemented by a poor record of rehabilitation; a conservative estimate reveals that from 1951 to 1991, around 21 million people have been displaced from their locations for the purpose of dams, mines, industries and wildlife sanctuaries. Land Acquisition in India is done under the Land Acquisition Act (LAA), 1894. This Act does not have any provision for rehabilitation. Since then until 1985, any state government or Central

Government enacted no legislation or a policy for resettlement and rehabilitation. It was only when states like Madhya Pradesh in 1985, Karnataka in 1987 and Maharashtra in 1989 enacted laws however, without properly laid down rules and regulations for resettlement and rehabilitation of the people displaced from state-level water resource projects; the legacy of the colonial government was broken. Public sector companies like National Thermal Power Corporation (NTPC) and Coal India Limited (CIL) also came out with their policies in 1993 and 1994 respectively. These policies were, however, alleged to be formulated under the pressure from the World Bank. Government of India has come out with a National Policy on Resettlement and Rehabilitation (NPRR) for Project Affected Families, 2003, which was published in the Gazette of India on February 17, 2004. The first draft of this policy was brought out in1993 and thus the policy was long overdue. This policy has however generated a debate among the scholars about its relevance for the project-displaced people. Some scholars compared this policy document with proposed draft of the policy and came out with the observations that the policy is regressive in its nature. Others viewed it an election stunt of the previous government. Comparing it with the old Land Acquisition Act (LAA), 1894 the researchers find that both NPRR and LAA have conflicting clauses and that the former serves the vested interests of the land requiring body. However when it comes to neglecting the vulnerable sections of society including women, the NPRR follows the spirit of the LAA. The policy is also viewed as a package with a series of barriers, assumptions and conditions, which while criticizing cash compensation, actually bases itself on cash instruments and serves the agenda of corporate globalization.


Impact on Women


A review of the laws and policies dealing with rehabilitation of displaced people reveals that women’s concerns and needs are grossly ignored in these policies. LAA, 1894 determines compensation and rehabilitation benefits in the form of cash to displaced people on the basis of the ownership on the land acquired. It recognizes only individual and no collective rights. Thus people depending upon common property resources for generations are not entitled to any compensation under this Act. The Act therefore reflects gender discrimination. It merely reinforces the existing reality of women’s lack of ownership and property. Moreover, the cash compensation awarded to the male member of the family has an adverse impact on women as

they have no control over the cash compensation. The policies adopted by NTPC and CIL are also considered to have gender discrimination as none of the policies adopted by these public sector undertakings recognize women as independent entity for R&R benefits. CIL policy, however does make a passing reference to the fact that special attempt will be made to ensure that women get adequate access to income generating opportunities offered under R&R policy which provides such benefits only based on the land ownership. So the policy conflicts itself with the existing realities of women owning the land.


At the State level, Uttar Pradesh and Madhya Pradesh policies have elements of gender discrimination. Government of Orissa offers a policy with some gender components. In its resolution no.25101 dated 14th July 1992, the policy accorded divorcees (with or without dependent children) and with no source of livelihood; status of a separate family for R&R benefits. The ground reality is however that the required clause for claiming the benefits by submitting an affidavit proving herself to be a divorcee followed by an enquiry of that claim by the office-in-charge; makes it really difficult for such women to avail R&R benefits under the policy. Because in majority of the cases, the husbands desert these women without a formal divorce. Thus such clauses make these illiterate women all the more vulnerable as they are at the mercy of the office-in-charge and also it is very difficult for them to get affidavits.  At project level, the planners of the Sardar Sarovar Project of Maharashtra Government considered major unmarried daughters for the purpose of R&R. Gujarat government categorically left out unmarried daughters and includes all women widowed after 1980 as separate family for the purpose of R&R benefits. Women widowed prior to 1980 are, however, considered as dependents on the male head of their families. Madhya Pradesh Government, on the other hand, does not mention women at all for resettlement and rehabilitation. The recently adopted National policy on Resettlement and Rehabilitation (NPRR) again shows the same kind of gender discrimination. Thus the single male adults are able to claim the benefits separately but unmarried women do not receive any benefits and are treated as dependents on their male relative. However, it recognizes the concept of family for the purpose of resettlement and rehabilitation where unmarried daughters and unmarried sisters are included.


The major sectors in which infrastructure projects are implemented in India include irrigation, mining, industry, power, ports, water supply, and roads and highways. Infrastructure projects in these sectors entail acquisition of private land, which requires not only paying compensation to owners but also resettlement and rehabilitation (R&R) of affected persons (APs). Although these projects are important for national development, they often adversely affect some groups. Hence sound policies and measures needed to protect the lives, human rights, and welfare of such people become an integral part of development projects. Involuntary resettlement will remain a major challenge in the foreseeable future. If anything, the number of projects that involve land acquisition will increase. Land is a basic requirement for these projects and owing to rapid population growth uninhabited areas are

increasingly becoming scarce. In the circumstances, the only option is to acquire private land in populated areas. People displaced by development projects often have to move elsewhere to start a new life. There is a strong element of compulsion in displacement: long established social networks are disrupted and with them the social systems through which members of the community are sustained. For those forced to resettle in new locations, displacement is indeed an unmitigated disaster. Things become further intolerable when those in authority fail to show due consideration to the APs.

The trauma is greater when displacement is attended by lack of information, uncertainty, long waiting periods, poor compensation, social dislocation, and the culture shock that results when cohesive communities are scattered and resettled away from their kinship and linguistic groups.

Most large-scale development projects in India have been planned and executed through a centralized, hierarchical, and capital-intensive approach, based on the assumption that technology has the answer to all development problems. As a result, project authorities have adopted a centralized “command and control” system for administering and managing all stages of a project cycle. The approaches, techniques, and systems, which were perhaps suitable for construction and mechanical production, were applied to communities. Studies point to the impoverishment of APs because of projects and not their state of poverty before the project comes into the area (Fernandes 2000). Article 21 of the Constitution guarantees to every Indian citizen the right to life with dignity. When projects deprive them of their livelihood, they have a right to begin a new life that protects their economic interests, culture, and social system (Vaswani, 1992).  In national development, policy makers give priority to economic growth rather than to the people. Displaced persons (DPs) are often not resettled satisfactorily. Though externally aided projects have resettlement packages, their approach to resettlement has limitations. Studies show that the strong (high caste, upper-class families, especially men) become stronger. The weak (the poor, low-caste, particularly Women) become weaker.


Aims of resettlement

·         To seek to empower the client and facilitate long-term solutions to their needs around rehousing.

·         To identify the best available options for the client's rehousing.

·         To make best use of the often scarce housing resources available, as fairly as possible, and without discrimination to those who will make best use of them.

·         To ensure that clients nominated or referred to other organisations are suitable for those organisations.

·         To seek to equip clients, either through training and advice given by the resettlement service or by referral to appropriate agencies, with skills and knowledge in the following areas:

    • Welfare benefits - seeking to maximise the client's income.
    • Training and employment/career options.
    • Tenancy rights and responsibilities.
    • Cooking/domestic/home maintenance skills - if these are sought.
    • Social skills/networking.
    • Budgeting skills.

·         To recognise that some clients have needs other than a home.

·         and that some have no need other than a home.

·         To recognise that accommodation will only be sustainable where the client Is able to function in the community.

·         To promote positive relationships that overcome isolation and encourage Interaction with the wider world.


Development projects based R&R problems like construction of dams/power station etc, - which are the major R&R problems faced by the country?

The developmental projects come into existence after a fairly long period of planning and awareness of displacement caused by such projects already exists among those who initiate the projects. The tragedy is that despite this prior knowledge of the extent of displacement, those in-charges of development projects pay little attention to the processes of resettlement and rehabilitation of displaced people. Development projects instead focus on economic efficiency and not on those who stand to lose all that they have, their land, and means of livelihood and stable patterns of social and cultural life. To my mind those who give up substantial portions of their assets for the sake of development projects need to be recognized as stakeholders in development projects. They too need to be a part of development. The major resettlement and rehabilitation problems refer to lack and at times deliberate avoidance of -:

a) Clear recognition of the fact of displacement,

b) Well-worked out advance plans for R and R of displaced groups,

c) Implementation of such plans by trained and competent R and R personnel of such projects

d) Participation of displaced people in planning process of their own R and R.


                                                       INDIRA SAGAR PROJECT

R&R Policy of Government of Madhya Pradesh: The Policy of the Madhya Pradesh State Government regarding Resettlement and Rehabilitation (R&R) for displaced person of Indira Sagar Project was set out in 1985. Thereafter discussions took place at various levels in the State, with the officials of Govt. of India and with the world bank mission and it was decided that NVDA have to frame a more comprehensive and liberal R&R Policy for the Project. Accordingly R&R Policy for Project affected Families of Indira Sagar Project has been prepared and it is more liberal than the provisions made in NWDT Award.


Broad Principles for Rehabilitation of Displaced Families:

  1. The aim of the State Government is that all displaced families as defined hereinafter, would, after their relocation and resettlement improve, or at least regain, their previous standard of living within a reasonable time.
  2. It would be ensured that no hardship is caused to the displaced families in moving out from the present habitat in to a new place and way of living.
  3. It would be ensured that no adverse social, economic and environmental effects of displacement would take place on the host communities.
  4. Special care would be taken of the families of Scheduled Castes, Scheduled Tribes, marginal farmers and small farmers.
  5. Families having legal titles to land and the encroachers would be treated on the same footing for the purpose of entitlement for compensation or for payment of an amount equivalent to compensation, as the case may be, and for their rehabilitation.
  6. No distinction would be made between the families displaced from revenue villages and the families displaced from the forest villages in respect of their rehabilitation.
  7. Reasonable compensation would be determined for the lands, buildings and other immovable assets acquired. Similarly, a reasonable cost would be charged for the lands that would be allotted at the new sites.
  8. Displaced families would be rehabilitated, maintaining the existing structure of social groups as far as possible, in the command area or near the periphery of the affected areas in accordance with their preferences.
  9. Adequate physical and social infrastructure and community services would be provided at the new sites.
  10. While resettling families entitled for allotment of land, it will be ensured that viable units of land are given,
  11. In order that in the process of resettlement, the new and host families get fully integrated, the displaced families would be encouraged and assisted, in purchase of lands from voluntary sellers of the host village.
  12. The rehabilitation policy be so implemented that middlemen and profiteers would get eliminated.
  13. Landless agricultural labourers and non-agriculturist families would be assisted in rehabilitation at new places by giving grant-in aid in the initial period and self and wage employment opportunities.
  14. Displaced families would be given priority in employment on the project construction.

Introduction of other privilege in resettlement policy:

By keeping the earlier resettlement Policy for Project affected families of Narmada basin complex, Government of Madhya Pradesh has taken various decisions for improving and uplifting the life of PAFs in the State Council Meeting held on 13th July, 1998. Government has taken beneficial decisions very sympathetically for solving the problems of Project affected farmers whose land is coming under submergence due to Indira Sagar Project.

  • The valuation of land under submergence will be calculated on the basis of selling rate of Sivani Malwa area in State. 
  • The evaluation of acquired wells of displaced farmers will be on realistic basis, which will be as per CSR of P.W.D. Earlier assumed value only used to made.
  • Government has taken decision now that compensation will be made for cement concrete pipes and PVC water drains, which are provided for Irrigation Purpose in submerged area.
  • Displaced persons who are not interested to take possession of residential pilot in Resettlement site, now are entitled for rupees forty thousand compensation instead of rupees fifteen thousand prior to this.
  • New Resettlement site is to be developed near by Mundi town for resettlement of displaced persons.
  • The payment of compensation will be made in one installment in place of two installments subject to undertaking given by displaced applicant in writing regarding their shifting within a month.
  • Displaced (Person) farmers can receive a loan, for twenty years interest free, if he purchases the land in other place and the cost of such purchased land comes more than the received compensation amount. In this connection rule will be formed within a month time.
  • Casual work plan is accepted to give rescue and protection of such villages, which are coming under prospective submergence areas in the year. Provision for construction of temporary shades drinking water facility, etc are made. Food will also be served free of cost.
  • Displaced farmers should received market value of their land in the awards, which is going to be passed in future. New process is to be fixed within one month, and, advise and consultation will also be taken from five representatives of displaced families of that particular village while fixation of such cost.
  • In such submergence area of Indira Sagar Project, where a complaints for fixation of low rates in previous cases of passed awards, the committee constituted under the chairmanship of departmental commissioner will review such cases. The committee will also include non-government member. In such cases, where complaint of less compensation is found correct than the committee will fix reasonable amount and difference of the amount towards displaced person will be given in the form of Special Resettlement Grant to respective PAFs.
  • The Government will bear the payment of stamp duty and registration fee over such lands, which is purchased by displaced person in some other places. For appointing of teachers, priority will be given to eligible candidates from displaced families.
  • Those eligible displaced persons who are encroachers of forest land and have lost their receipts, now they will also receive compensation after verification from government records.

Apart from acquired land which has come under submergence areas, if the use of acquired land is made for other purposes such as for establishment of resettlement site/bridge/construction of roads, and if due to these, displacement condition occurs then to the above mentioned benefits will be available to all affected PAFs towards whom the provisions cited under Policy for Indira Sagar Project are due. This is also applicable for other projects, which comes under Narmada Valley Development Authority. 


 Nandigram violence

The Nandigram violence was an incident in Nandigram, West Bengal where, on the orders of the Left Front government, more than 4,000 heavily armed police stormed the Nandigram area with the aim of stamping out protests against the West Bengal government’s plans to expropriate 10,000 acres (40 km2) of land for a Special Economic Zone (SEZ) to be developed by the Indonesian-based Salim Group. The police shot dead at least 14 villagers and wounded 70 more.

The SEZ controversy started when the government of West Bengal decided that the Salim Group of Indonesia would set up a chemical hub under the SEZ policy at Nandigram, a rural area in the district of Purba Medinipur. The villagers took over the administration of the area and all the roads to the villages were cut off. A front-page story in the Kolkata newspaper, The Telegraph, on 4 January 2007 was headlined, "False alarm sparks clash". According to the newspaper that village council meeting at which the alleged land seizure was to be announced was actually a meeting to declare Nandigram a "clean village," that is, a village in which all the households had access to toilet facilities. However, later events indicate that the government had in fact decided to set up the chemical hub and the villagers' concerns were genuine. The administration was directed to break the Bhumi Uchhed Pratirodh Committee's (BUPC) resistance at Nandigram and a massive operation with at least 3,000 policemen along with cadre of the Marxist ruling party was launched on March 14, 2007. However, prior information of the impending action had leaked out to the BUPC who amassed a crowd of roughly 2,000 villagers at the entry points into Nandigram with women and children forming the front ranks. In the resulting mayhem, at least 14 people were killed.

The chemical hub would require the acquisition of over 14,000 acres (57 km²) of land. The special economic zone would be spread over 29 mouzas (villages) of which 27 are in Nandigram. Probodh Panda, a CPI MP from the district has said that most of the land to be acquired is multi crop and would affect over 40,000 people. Expectedly, the prospect of losing land and thereby livelihood raised concerns among the predominantly agricultural populace. The villagers, which included supporters of the party in power, CPI(M), joined hands with other opposition supporters, organized a resistance movement under the banner of the newly formed Bhumi Uchhed Pratirodh Committee or BUPC (literally, Committee for the Resistance to Eviction from Land).

The Parliament of India decided to discuss Nandigram with urgency, suspending the regular question hour sessions, on 21st November 2007 after two days of complete suspension of the proceedings owing to the heated debates between CPI (M) and opposition party members in both the houses. CPI (M) was alienated in the issue by all the other ruling UPA allies considering the fierce nationwide sentiments against the massacre.

The latest drubbing that the Buddhadeb Bhattacharya government's March 14 action received was from the High Court at Kolkata, when, on 16.11.2007, a two-judge bench consisting of The Hon’ble Chief Justice S. S. Nijjar, and the Hon’ble Justice Pinaki Chandra Ghose, declared that "The action of the police department to open fire at Nandigram on 14.03.2007 was wholly unconstitutional and cannot be justified under any provision of the law" and further that "The action of the police cannot be protected or justified on the ground of sovereign immunity." and also that "The action of the police cannot be justified even under the provisions of Criminal Procedure Code; The Police Act, 1861 for The Police Regulations, 1943". The Hon'ble judges also ordered that "we direct the State of West Bengal to pay to the victims of the deceased as a result of the indiscriminating police firing on 14th of March, 2007 immediate compensation in the sum of Rs.5 (five) lakhs each" and further that "We further direct the State Government to pay immediate compensation to the persons who were injured and whose particulars have been given the pleadings sum of Rs. not less than 1 (one) lakh each" and also "We further direct the State Government to pay compensation to the victims of rape who have been duly identified in the pleadings a sum of Rs.2 (two) lakhs each".

 Legal and Policy Frameworks for Land Acquisition and Resettlement

The Government of India’s National Policy on Resettlement and Rehabilitation (NPRR), 2004 recognizes the need to support restoration of livelihoods of APs. The policy lays down minimum norms for rehabilitating APs and broadly outlines an approach and institutional framework to achieve its objectives. A few states and central ministries and departments have their own R&R policies/acts. Until the NPRR was issued in 2004, the basis for land acquisition and compensation was the Land Acquisition Act, 1894[4], which is the enabling legislation for land acquisition but not for resettlement. For highways, the National Highways Act, 1956, applies. Apart from these two acts, various state governments, such as Karnataka, Orissa, Madhya Pradesh, and Maharashtra, have promulgated their own policies/acts. Some parastatal organizations, such as the National Thermal Power Corporation (NTPC), National Hydel Power Corporation, and Coal India Limited (CIL), have also developed their R&R policies. Like the National Highways Act, other two special acts include the Coal Bearing Areas (Acquisition & Development) Act, 1957, which is applicable to land acquisition in coal bearing areas, and The Mines and Mineral Acts, 1957. The NPRR applies to projects where 500 or more families have been displaced as a group in plains areas and 250 or more families in hilly areas and areas mentioned in Schedule V and Schedule VI of the Constitution. The benefits under the NPRR are applicable to all project affected families, including those below the poverty line. The NPRR states that rehabilitation grants and other monetary benefits indicated in it are the minimum and that state governments and project proponents are free to adopt higher compensation packages. The positive feature of the NPRR is an acknowledgement that displacement results in “state induced impoverishment”. It also recognizes that “no development project can be justified if a section of society is pauperized by it.” Thus, the policy for the first time has made an attempt to correct the shortcomings of the existing legal regime by proposing that R&R are exercises in pro-poor development in line with the constitutional aspirations of social justice, in contrast to the Land Acquisition Act, which does not address R&R. The NPRR provides a good basis for harmonizing donors’ resettlement policy requirements, since it provides scope for flexibility in adopting enhanced entitlements by project proponents.


Land Acquisition Act, 1894

The Land Acquisition Act, 1894 is commonly used for acquisition of land for any public purpose. It is used at the individual state level with state amendments made to suit local requirements. In addition to the Land Acquisition Act is other state legislation for land acquisition. Expropriation of and compensation for land, houses, and other immovable assets are carried out under the Land Acquisition (Amendment) Act, 1984. The Act deals with compulsory acquisition of private land for public purpose. The procedures set out include:


(i) Preliminary notification (Section 4);

(ii) Declaration of Notification (Section 6);

(iii) Notice to persons interested (Section 9);

(iv) Enquiry and award (Section 11); and

(v) Possession (Section 16).


Under the Land Acquisition Act, 1894, before amendment, compensation for land and houses was paid at the market value of the assets on the date of preliminary notification. The valuation was based on a detailed examination of land and structures. An additional 15% of the determined market value was paid as solatium to account for the compulsory nature of acquisition. Interest in case of delayed compensation was paid at a rate of 5% per year from the date of dispossession. The amount of the award was determined by a land acquisition officer, but could be appealed to

a  civil court. The 1984 amendment to the Land Acquisition Act addressed the matter of compensation and delays in payment. As to the level of compensation, the rate of solatium was increased from 15% to 30%. For delays, the amendment requires that:


(i) A time of 1 year was fixed for completing all formalities between the issuance of Section 4

and  Section 6; an

(ii) The compensation award must be determined within 2 years of the issuing of Section 6 notification. Interest is payable at a rate of 12% per year from the date of preliminary notification to the date of dispossession.

These changes apply to cases before the civil courts even for awards made before the enactment of the amendments. Land for coal mining is acquired under the provisions of a separate Coal Bearing Areas (Acquisition and Development) Act, 1957. The Act states that, “in the economic interest of India, greater control over coal mining industry and its development by providing for acquisition by the State of land containing or likely to contain coal deposits or of rights in or over such land for the extinguishments or modification of such rights by accruing virtue of any agreement, lease, license or otherwise or for matters connected therewith”. Under Section 4 of this Act, the state can undertake the exercise of prospecting for coal on any land. If the land is found to have coal deposits then notification is issued under Section 7 of the Act[5]. The possession of land is taken under Section 12 of this Act and compensation is granted under Section 17. The application of the Land Acquisition Act and the Coal Bearing Act has an important bearing on the R&R policies at the state level. It may be pointed out that the primary cause of litigation in land acquisition is related to entitlements of APs. A key reason behind contentions relating to entitlements is the baseline survey. Timely execution of the baseline survey and the subsequent process of acquisition activities can ameliorate the situation. However, the application of the Coal Bearing Act corresponding to the preparation of proposals for mining is inherently time consuming. The baseline survey (including entitlements of APs) is conducted after issuance of Section 4 of the Coal Bearing Act, i.e., while prospecting for coal. On the basis of the baseline survey, the draft proposal for mining is prepared and sent to appropriate authorities for approval. The notification for acquisition is thereafter issued under Section 7 of the Coal Bearing Act. In most cases the process of approval of the proposal takes a long time[6], when discontent brews among the AP community. It may be noted that when the Land Acquisition Act is the basis of land acquisition and therefore a part of the R&R policy (as is the case of Orissa State R&R policy of 1998) a deadline for the baseline survey is adjudged, i.e., within 2 months of the issuance of Section 4(1) of the Land Acquisition Act. However, the CIL R&R policy (1994) which was formulated on the basis of the Coal Bearing Act, proposes a baseline survey before notification. Thus, while the Coal Bearing Act is apparently more appropriate for acquisition for the purpose of coal mining from the miner’s viewpoint, it has procedural implications resulting in difficulties for R&R. The other significant legislation pertaining to coal mining vis-à-vis land acquisition is the Mines and Minerals (Regulation and Development) Act, 1957 and amended in 1986. This Act provides for regulation of prospecting, granting of lease, and mining operations under the control of the central Government. Apart from this, the Mineral Concession Rule, 1960 is relevant in the context of grant and renewal of prospecting licenses, as also for lease in respect of lands belonging to private individuals. The central Government has also adopted other special laws that govern specific types of land acquisition, including the National Highways Act, the Indian Railways Act, the Indian Electricity Act, and the Coal Bearing Act.1 The basic principles of the Land Acquisition Act is incorporated into these special laws, with a few exceptions.




1. Limitations of the Land Acquisition Act

The Land Acquisition Act as amended does not contain any provision specifically dealing with resettlement (including that related to income restoration aspects).


(i) It does not allow for compensation (except for houses) for landless laborers, artisans, and those sharing the use of land but without legal rights to it;

(ii) The method of valuation of land considers only the market price of land at the date of notification under Section 4(1) but ignores any increase in the value of land at a subsequent date. Compensating for actual market value of land, which will entitle the owner to buy similar replacement land in adjacent areas, is not practicable under the framework of the Land Acquisition Act;

(iii) The Act computes the value of land through the sales statistics method, leading to undervaluation of land. Buyers deliberately undervalue their land in sales transactions to reduce registration fees. This leads to a large number of court cases resulting in further delays and harassment both to landowners and the LAO/project authority (PA);

(iv) The  Act does not specify any compensation for deprivation of CPRs, especially loss of customary rights to land and forests, which forms an integral part of tribal livelihoods; an

(v) The acquisition process takes too long and is incompatible with infrastructure project construction schedules.


Land Acquisition under the National

Highways Act, 1956

As already noted, land acquisition and compensation for project-affected persons is governed by the Land Acquisition Act (1894), which has been amended from time to time. However, for the purpose of maintenance, sustenance, and management of national highways, a special act, the National Highways Act, 1956 has been promulgated. This Act provides for acquiring land through a “competent authority” which means any person or authority authorized by the central

Government by notification in the Official Gazette to perform the functions of the competent authority for such areas as may be specified in the notifications. For land acquisition, the Act defines the various steps as follows:

(i) Section 3A— intention of central Government to acquire land;

(ii) 3B—power to enter for survey;

(iii) 3C—hearing of objections;

(iv) 3D— declaration of acquisition;

(v) 3E—power to take possession;

(vi) 3F—power to enter into the land where land has vested in the central Government;

(vii) 3G—determination of compensation;

(viii) 3H—deposit and payment of compensation.

The Act requires that the processes must be completed within a year from 3A to 3D. This requirement addresses a key weakness in the Land Acquisition Act under which the process can take up to 3 years. Although the National Highways Act significantly reduces the time frame for acquisition, the rules and principles of compensation have been derived from the Land Acquisition Act, 1894. The National Highways Act covers only legal titleholders and provides for compensation based on market value of the land; additional compensation for trees, crops, houses, or other immovable property; and damage due to severing of land, residence, and/or place of business.

The main limitations of the National Highways Act are as follows:

(i) It does not include non-titleholders for entitlements;

(ii) It provides compensation for acquired properties and structures only;

(iii) It does not specify compensation for loss of income due to the acquisition of commercial

establishments and agricultural land; and

(iv) It does not provide economic rehabilitation grants to vulnerable categories.


National Policy on Resettlement and

Rehabilitation, 2003


The NPRR represents a significant milestone in the development of a systematic approach to addressing resettlement. The policy establishes a framework for extending additional assistance to project-affected families, over and above the compensation for affected assets provided under the Land Acquisition Act. While the policy has a number of useful features based on established good practice, some key gaps remain between the NPRR and ADB and World Bank approaches and standards for involuntary resettlement. The key point of divergence between the Indian Government and the two funding agencies’ approach to resettlement issues is a government focus on compensation versus donor concerns for sustainable restoration of incomes of APs (or in the case of the very poor, improvement of incomes). The Indian Government is using a legal framework driven by a concern to compensate for lost assets while the two funding agencies, as development institutions, approach resettlement as a development matter and strive to reinstate or improve the income base of APs. One way of rectifying this fundamental divergence is to supplement compensation for lost assets with existing government development programs or projects to improve income and living standards for all categories (owners, squatters, tenants, etc.) of project-affected people. Another method is to identify gaps between the two approaches on a case-by-case basis and fill the gaps in the context of a given project to assure compliance with both Indian laws and regulations and donor policies.



Key Strengths of 2003 National Policy on Resettlement and Rehabilitation (NPRR)

The NPRR contains a number of provisions that will help improve planning, implementation, and monitoring of involuntary resettlement in development projects. Key strengths of the policy include:

(i) Sound provisions related to consultations with APs and disclosure of relevant information

to them at various stages of resettlement planning;

(ii) Recognition, in the preamble to the policy, which APs without legal rights also need to be

assisted, although detailed provisions on how this would be put into practice are absent;

(iii) Treatment of adult sons and daughters as separate families (and therefore, eligible for economic rehabilitation), which is a significantly higher standard than donor resettlement policy requirements;

(iv) Provisions allowing for purchase of privately owned land through open-market transactions for the resettlement of project-affected people;

(v) Provisions clarifying that the cost of resettlement needs to be included in the project cost;

(vi) Recognition of the need to prepare resettlement plans that are disclosed to the APs in draft form, and reviewed and approved by competent authorities; and

(vii) An attempt to define and set up an institutional framework, at the central and the state level, for planning, implementing, and monitoring resettlement.


Key features or the NRRP, 2007:


·         Policy covers all cases of involuntary displacement.

·         Social Impact assessment (SIA) introduced for displacement of  400/200 or more  families in plain/tribal, hill, Scheduled areas, etc;

·         Consultations with Gram Sabhas or public hearing made compulsory;

·         Principle of rehabilitation before displacement;

·         If possible, land for land as compensation ;

·         Skill development support and preference in project jobs (one person per nuclear family);

·         Rehabilitation Grant  in lieu of land/job;

·         Option for shares in companies implementing projects to affected families;

·         Housing benefits to all affected families including the landless;

·         Monthly pension to the vulnerable, such as disabled, , destitute, orphans, widows, unmarried girls, etc;

·         Monetary benefits linked to the Consumer Price Index; also to be revised suitably at periodic intervals;

·         Necessary infrastructural facilities and amenities at resettlement areas;

·         Periphery development by project authorities;

·         Committees for each project, to be headed by Administrator for relief and rehabilitation.

·         Ombudsman for grievance redressal;

·         National Rehabilitation Commission for external oversight.





Key Policy Differences in Comparison with ADB’s

Policy on Involuntary Resettlement


a. Gaps between ADB’s policy and the NPRR


Overall, there are a number of encouraging features in the national policy. However, a number of key differences or gaps between the two policies remain. Key gaps between ADB’s resettlement policy and the NPRR are summarized below. The national policy does not apply to all development projects. The national policy defines a “cut-off” threshold tied to the number of families that need to be displaced for the policy to be triggered[7]. The policy framework that would apply to projects that affect less than this threshold is not clear, nor is the basis for establishing this threshold. ADB’s policy, on the other hand, applies to projects involving the taking of land, regardless of the number of persons displaced, although planning requirements vary with the scale and scope of impacts. If the provisions of the national policy are followed, there would be no assurance that the standard of living of APs will be improved or restored in projects or subprojects that affect fewer than 500 (or 250) families. Only long-term residents are eligible under the policy. The policy requires that the APs should have been resident in the project area for at least 3 years prior to the date of notification of the project in the project area. However, under this provision, bona fide residents of the project area who have purchased property less than 3 years before the date of notification would be barred from receiving any additional assistance over and above compensation. Such people therefore, will not be able to restore their standard of living after resettlement. This provision may be particularly problematic to implement in urban areas where land and housing is bought and sold frequently. The policy does not apply to parks and protected areas. While it is fully appropriate, from the Government’s viewpoint, that the national policy is triggered only in situations involving land acquisition using the principle of “eminent domain” of the state, it does not apply to restrictions of access to parks and protected areas, thus it is important to recognize this difference, especially since ADB’s resettlement policy also addresses restrictions of access. In projects involving such restrictions, ADB discusses and agreed upon project-specific mitigation arrangements consistent with its policy on involuntary resettlement. Cash compensation versus land-based and other mechanisms for economic rehabilitation. While it is recognized in the preamble to the national policy that cash compensation alone may not be sufficient for economic rehabilitation, most of the specific mitigation measures proposed are based on cash compensation. Though the policy refers to the need to provide land based resettlement and allows for purchase of privately owned land to resettle APs, the area of agricultural land proposed to be provided to each affected family is quite low (maximum 1 hectare [ha] of irrigated land and 2 ha of rainfed land). Such thresholds for allotment of agricultural land, combined with provision of insufficient amounts of cash assistance, are unlikely to enable restoration of the standard of living of those who lose significantly larger areas of land. Inadequate livelihood restoration packages for certain categories of APs. Though the livelihood packages seem to be adequate for certain categories of APs, such as agricultural and nonagricultural labor, and there is a reasonable provision for transition assistance after resettlement, the extent of assistance proposed to be provided to mitigate loss of livelihood for those losing a significant amount of land seems to be inadequate and is not likely to result in the restoration of their livelihoods. No specific provisions for those without legal rights to affected land. While the preamble of the policy refers to the need to assist those without legal rights, there are no specific provisions on whether and how such assistance would be provided. This would be a major issue in many development projects, especially those in urban areas that may involve people without legal rights to the land they are occupying. Restoration of standards of living would be difficult for those without legal rights to the land that they occupy. Inadequate provisions related to linear resettlement. The provisions related to linear resettlement, of paying rupees (Rs)10,000 to each affected landowner without regard to the area lost, or the severity of impact on the respective landowner, are inadequate. This lumpsum payment approach is unlikely to help achieve the stated objective of the national policy—to improve the standard of living of the APs. Inadequate provisions related to tribal people (indigenous peoples). While the policy contains special provisions for tribal populations, most of the provisions pertain to payment of higher cash compensation to tribal than non-tribal APs. Even on the issue of allotment of replacement agricultural land, which is a key prerequisite for the successful resettlement of tribal people, the policy only requires preference to tribal APs among the displaced population, but does not mandate any special efforts to provide replacement agricultural land to tribal people. ADB’s policy related to resettlement of tribal people, on the other hand, requires special efforts to promote land-based resettlement. Thus, in situations involving significant loss of land belonging to tribal people, there would be significant gaps between the national policy and the requirements of ADB’s policies on involuntary resettlement and indigenous peoples.


b. Issues to benefit from further classification


In addition to the above aspects of the national policy, the following issues can benefit from further clarification, either through a revision in the policy document, or in the implementation guidelines accompanying the policy document. Timing of preparation and approval of resettlement plans. While the policy provides for preparation of resettlement plans and their approval by appropriate authorities, the timing of preparation of the plans, or of their approval, has not been specified. It is important that the plans are prepared, reviewed, and approved before land acquisition is initiated and before any of the APs are adversely affected. The policy implicitly addresses rural and not urban resettlement. The policy is targeted mainly at land acquisition and resettlement in rural areas. It does not address some significant issues that are pertinent in urban resettlement, for example, the need to:

(i)                 relocate affected commercial properties to appropriate locations;

(ii)               compensate for losses of income during transition;

(iii)             provide alternative housing options to the APs; and

compensate APs, if necessary, for increase in travel distance after relocation. Provision of physical infrastructure at resettlement sites. Though the policy makes reference to the need to provide physical infrastructure in accordance with state regulations, it does not clearly state that the physical infrastructure will be improved or at least maintained after resettlement. Also, the house plot size to be provided is extremely small[8] and would not enable APs with larger original holdings to improve their standard of living. Relocating farmers may find it particularly difficult to relocate their houses, cattle sheds, and household gardens in plots of the size for which they are eligible under the policy. Allotment of plots of suggested size may be acceptable for households with adult sons and daughters so that they can pool their plots for bigger houses and cattle sheds, etc. However, for households without eligible adult children, the allotted plots must be at least of the same area as affected holdings. Linkage of resettlement implementation with construction activities. The policy does not provide for any linkage between the pace of land acquisition and resettlement and the pace of construction activities under the project. Unless the two are clearly linked in a way that construction on a particular piece of land is not initiated unless agreed resettlement measures for that land are completed, the APs may suffer significant hardship and it may not be possible to achieve the objectives of the national policy. Clarification of institutional arrangements for resettlement implementation. It may not always be feasible to appoint an officer of the rank of district collector to be in charge of resettlement for each project under the policy. Even in cases where the district collector is appointed for all projects in the district involving resettlement, it would be very difficult for the collector to devote adequate attention to resettlement issues. The incentives framework to complete resettlement in a timely and effective manner needs to be further reviewed by the Government. In the absence of a clear agreement between the project agency and the district/ state administration, there would be no pressure on the district administration to complete the resettlement process in a timely manner. Scope for donor assistance to establish resettlement capacity at various levels. The national policy document assumes strong capacity to plan, implement, and monitor resettlement at different levels[9]. However, it is not clear how and where the institutional details will be worked out. In conclusion, while the NPRR is a positive development, especially if the provisions of the policy are viewed only as “minimum benchmarks” to be enhanced and embellished based on the project context, there are significant gaps that need to be addressed if the proposed policy framework is to be “materially consistent” with donor standards on involuntary resettlement. Also, the policy only deals with issues related to economic rehabilitation and does not address the provisions in the Land Acquisition Act, which continues to be the basis for calculating and paying compensation for affected assets.


State Policies

1. Maharashtra

Maharashtra took the lead among Indian states in passing a law on resettlement rehabilitation in 1976. After the state high court questioned some of its clauses, a commission was appointed to review the law. The act was amended in 1986 but received the president’s assent only in 1989.

Well before enactment, the state government accepted the need to rehabilitate DPs and declared the following policy intentions:

(i) DPs will preferably be allotted land for cultivation;

(ii) A residential plot will be provided;

(iii) Gaothans (settlements) are to be established;

(iv) In newly established gaothans, civic facilities will be provided; and

(v) All the expenditure incurred for these rehabilitation measures should be met from the project budget.


Provisions in the 1989 Act are as follows:

(i) The Act is primarily applicable to irrigation projects in the state but not to interstate projects. The act can apply to projects in other sectors, if government clarifies its intention by issuing a notification;

(ii) The State government or the implementing agency on behalf of state government has to notify the affected and benefited areas of the project;

(iii) Landowners, agricultural laborers, and other individuals who have resided or worked

continuously in the affected areas for 5 years before the notification are to be considered APs;

(iv) After taking into consideration the state government’s policy, in consonance with the provisions of the Act and also the prevailing circumstances, the collector has to formulate a proposed scheme for the rehabilitation of APs;

(v) APs are eligible for the following benefits:

• Alternative land to the extent of acquired land;

• A residential plot;

• Services (employment) on a priority basis;[10] and

• Civic amenities in resettlement areas.

 The shortcomings in the Act are:

(i) Preparation of rehabilitation schemes is left entirely to the discretion of the collector. He is not accountable to the APs; and

(ii) No definite time limit is fixed for the completion of rehabilitation.



2. Madhya Pradesh

Madhya Pradesh passed a law in 1985 known as the Madhya Pradesh Pariyojna Ke Karan Visthapit Vyakti (Punarsthapan) Adhiniyam, 1985. It was enacted to “provide for the resettlement of certain persons displaced from lands which are acquired for irrigation projects, power projects or public utility projects and for matters connected therewith or incidental thereto.”

The features of the Act are:

(i) It recognizes that cash compensation alone is not sufficient and that more elaborate steps have to be taken to rehabilitate APs;

(ii) It provides for the rehabilitation officer to identify land suitable both for housing and

for cultivation;

(iii) Land for housing is to be selected to ensure that basic amenities like water and roads are


(iv) It provides that, if necessary, government forest land can be cleared and made available

for cultivation;

(v) It provides for the preparation of a draft resettlement plan covering all aspects from identification of alternative land to the schedule of resettlement. The plan has to be finalized only after the APs have been heard; and

(vi) The collector is entrusted with the task of constructing alternative resettlement sites and

the government has to ensure that sufficient funds are made available for the purpose.


The shortcomings and inconsistencies in the Act are:

(i)The term “displaced person” has been defined as any tenure holder, tenant, government lessee, or owner of other property, who on account of the acquisition of his land or other property has been displaced from such property. There is no clarification as to the status of adult sons or daughters—hence the risk of omission or deprivation of many APs;

(ii) The provision of making forest land available (after deforestation) for cultivation violates

the provision of the Forest Conservation Act, 1980 later amended in 1988. It prohibits the diversion of forest lands for nonforest use;

(iii) Section 17(2) of the Act provides for the compulsory acquisition of land for the purpose of resettlement, but subsequently in section 17(4), this is diluted by stating that excess land in the benefited zone in the command area of irrigation projects should be acquired as far as practicable; and

(iv)Section 18 provides that compensation for the land acquired will be paid according to the provisions of the Land Acquisition Act, 1894 and will be adjusted toward the market value of the land allotted to the oustee. This is against the interests of tribal oustees, who generally reside in remote areas and whose land has little market value.


3. Karnataka

The Karnataka Act was passed by the legislature in 1987, but received the president’s assent only 7 years later in 1994. The Act is known as Karnataka Resettlement of Project Displaced Persons Act, 1987. Some of the positive features of the Act are:

(i) Similar to the Maharashtra Act, it imposes obligations on the authorities to find avenues of employment for DPs either at the project site or elsewhere; and

(ii) It provides for a detailed census of DPs and assessment of the extent of land from which people are likely to be displaced. This clause is a distinct improvement over the Maharashtra

Act, as the latter is silent on this score.


Shortcomings of the Act are:

(i) The state government has the sole discretion to decide on the application (through a Gazette notification) of the provisions of the enactment for resettling DPs. No objective criteria exist to decide the issue;

(ii) It aims only at resettlement, not rehabilitation. The Act provides for payment of compensation, settling DPs at a new site, finding a house plot, agricultural land, etc. However, the civic amenities to be provided are not clearly defined, other than the reservation of land for threshing and for cremation or burial. The Maharashtra Act provides a detailed list of civic amenities to be made available in the resettlement colony as a part of its rehabilitation package;

(iii) According to the provisions of the Act, there is no room for ensuring the involvement of APs, at any stage. The informed consent of the APs for their displacement and resettlement is not an issue of concern in the Act; and

(iv) The R&R activities are to be planned and implemented by the administration with practically no role for any other agency, including local bodies.

4. Orissa

Orissa has passed several government orders since 1977. Based on these, a policy was promulgated by the state government for displaced persons in the irrigation sector in 1994. This is known as the Orissa Resettlement and Rehabilitation of Project-Affected Persons Policy, 1994. The policy has been recently revised. Some of the positive features of the policy are:

(i) It provides for people’s participation, with the involvement of APs, in mapping and designing the villages, resettlement sites, identification of the infrastructure required, development of common resources, etc.;

(ii) The sponsored resettlement colonies will be provided with civic amenities like schools, wells, village ponds, community centers, dispensaries, connecting roads, electrification, etc.; and

(iii) A booklet containing the salient features of the R&R package, with a clear mention of the benefits and amenities, is to be prepared and distributed to the APs prior to the issue of identity cards.

The limitations of the policy are:

(i) The policy is limited to water resource projects and not to all types of development-induced displacements. However, there is a note that “Government by notification may also include any other work/project of public utility for adoption of this policy”;

(ii) In line with the provisions of the Land Acquisition Act, market value and not the replacement value is the basis for compensation; and all the liabilities (mortgage, debt, or other encumbrances) on the land held by APs at the time of acquisition are deemed to be transferred to the land allotted to them at the rehabilitation site, thereby increasing the chances of impoverishment. Gujarat initially followed Maharashtra’s land for land scheme and later passed several government orders. The best-known package was that of the Narmada. But Gujarat does not have a state policy on rehabilitation as such. Andhra Pradesh, Tamil Nadu, and Rajasthan have passed several government orders, most of them in connection with externally aided projects.




Adequacy of Laws and Policies


The purpose of any R&R policy is to ensure that the needs of all APs are addressed so that they not only regain their previous standard of living but also improve upon it. The adequacy of R&R policies can be judged through coverage of the issues listed below. It is the presence or absence of these factors, together with their scale, that determines the adequacy of the R&R policy and the feasibility of planning and implementation of a successful R&R program. The factors are as follows:

(i)Organizational responsibility for funding, planning, and implementation of good reestablishment solutions—all state, parastatal, national policies, and policies of World Bank and ADB have this provision.

(ii) Provision for a baseline socioeconomic survey of APs, preparation of a resettlement plan, and availability of technical expertise in planning and cost assessment—all policies have this provision.

(iii) Provision for active participation of APs in setting resettlement objectives, preparation of the resettlement plan by identifying sustainable income-generation activities, and implementation of the same—barring state policies (except Orissa), all policies have this provision.

(iv) Provision for a sound, adequate, and accessible grievance redress mechanism leading to prompt and fair settlement of disputes—all policies have this provision. Provision for recognizing APs with various types of effect/ownership patterns of assets and entitlement of family members for R&R benefits—though support to non-titleholders is mentioned in the preamble to the NPRR, it is absent from the main text. Except Orissa, none of the state policies supports non-titleholders. Among parastatal agencies, barring CIL, all others support non-titleholders.



Compensation and Resettlement


What is involuntary resettlement?

Involuntary resettlement (IR) usually consists of two distinct yet related social processes: first, displacement of people due to expropriation of land through use of eminent domain; and second,

reconstruction of APs’ losses by (i) short-term measures such as compensation, R&R assistance in the form of shifting allowances, subsistence allowance, and transitional allowance; and (ii) long-term measures such as alternative income restoration schemes. This chapter deals with the process, adequacy, and constraints of short-term measures.


 Compensation for Immovable Properties

1. ADB’s IR Policy Provisions on Compensation -In this section, three key principles in ADB’s involuntary resettlement policy relating to compensation for acquired property are used as the basis for reviewing current resettlement compensation in the highway sector.

a. Principle 1: “If individuals or a community must lose their land, means of livelihood, social support systems, or way of life in order that a project might proceed, they should be compensated and assisted so that their economic and social future will generally be at least as favorable with the project as without it. Appropriate land, housing, infrastructure, and other compensation, comparable to the without project situation, should be provided to the adversely affected population, including indigenous groups, ethnic minorities, and pastoralists who may have usufruct or customary rights to the land or other resources taken for the project.”

This establishes ADB’s bottom-line principle on compensation for loss of assets as a result of government expropriation: whenever resettlement is unavoidable, APs’ livelihoods should not be worse because of involuntary resettlement. Flowing from this, determination of compensation for lost assets should be based on replacement value. “Replacement cost, according to ADB’s Operations Manual F2 on Involuntary Resettlement (2006), means the method of valuing assets to replace the loss at market value, or its nearest equivalent, plus any transaction costs such as administrative charges, taxes, registration, and titling costs. Where national law does not meet this standard the replacement cost will be supplemented as necessary. Replacement cost is based on market value before the market or dispossession, whichever is higher. In the absence of functioning markets, a compensation structure is required that enables affected people to restore their livelihoods to levels at least equivalent to those maintained at the time of dispossession, displacement, or restricted access.” Replacement value can mean either replacing the asset with an asset of similar quality and quantity or with monetary compensation. Thus, the market cost in ADB’s definition of replacement value refers to the market cost of the replacement land, not necessarily the land that is lost.

b. Principle 2: “The absence of formal legal title to land by some affected groups should not be a bar to compensation... Particular attention should be paid to the needs of the poorest affected persons including those without legal title to assets, female-headed households and other vulnerable groups, such as indigenous peoples, and appropriate assistance provided to help them improve their status.” In many Asian countries, rights to land (especially rural land) are poorly documented. Possessors without formalized rights are common, including tenant farmers, customary users, and so-called encroachers and squatters. It is not uncommon that long-term possessors with customary rights accepted by the local community do not have formalized rights officially recognized by the Government. Many such people who do not have formal legal title to the land to be expropriated will nonetheless are negatively affected by expropriation. ADB’s policy states that all “affected persons” are eligible for compensation irrespective of legal or ownership titles. ADB’s Operations Manual F2 defines APs as “...any people, households, firms, or private institutions who, on account of changes that result from the project will have their (i) standard of living adversely affected; (ii) right, title, or interest in any house, land (including residential, commercial, agricultural, forest, and/or grazing land), water resources, or any other moveable or fixed assets acquired, possessed, restricted, or otherwise adversely affected, in full or in part, permanently or temporarily; and/or (iii) business, occupation, place of work or residence, or habitat adversely affected, with or without displacement.”

c. Principle 3: “The affected people should be fully informed and closely consulted on resettlement and compensation options. Where adversely affected people are particularly vulnerable, resettlement and compensation decisions should be preceded by a social preparation phase to build up the capacity of the vulnerable people to deal with the issues.” APs’ access to information, full participation in the expropriation process, and ability to enforce their rights are not only a component of democratic development, but also an effective institutional check on the Government’s expropriation power. ADB’s policy is to counterbalance this power imbalance in the Government’s favor by empowering the stakeholders to effectively defend their entitlement to fair and just compensation under the rule of law.






Assessment of Compensation

a. Compensation for Land

Under the Land Acquisition Act, 1894 and the National Highways Act, 1956, during acquisition of private lands by the state, the consent of the landowner is not necessary. The person will lose the land even if he or she does not want to part with it. In addition, during fixing of the compensation amount the landowners’ objections and opinions are heard, but it is not necessary for the amount quoted by him or her to be agreed to. The landowner thus has no control over his or her right of ownership or over the level of compensation. It may be said therefore that compensation is not a price. This problem with compensation has contributed to unsuccessful

development-induced displacement experiences in India. These are due to defects in both the legal framework and, particularly, its implementation. India’s statutory compensation standards fall short of ADB’s policy on involuntary resettlement in several respects. The Land Acquisition Act stipulates that, while determining compensation, the market value prevailing on the date of preliminary notification, Section 4(1), should be taken into consideration. Compensation is based on five components:

(i) market value;

(ii) 30% solatium as “solace” for compulsory acquisition of land;

 (iii) damages incurred;

(iv) shifting allowance; and

 (v) interest for the delay, at 12% annual interest on the market value calculated as the time between the Section 4(1) preliminary notification and the date of the award. Interest does not accrue during any period during which proceedings are held up on account of a court-ordered stay or injunction. There is a slight difference between the Land Acquisition Act and the National Highways Act for calculation of compensation: the latter does not include the 30% solatium and interest. However, determination of market value often leads to under compensation. The Land Acquisition Act neither defines market value nor specifies the mechanism to determine this. Market value has been construed in many Supreme Court decisions, as in Vejra Vellu v Special Deputy Collector, and State of West Bengal v Bela Banerjee. In these cases the Supreme Court discussed the scope of market value and laid down the principles to be taken into account, the elements which make up the true value of the properly appropriated land and excluding matters which are not relevant. The Supreme Court in 1995 defined market value as the price that a willing seller might reasonably expect to obtain from a willing purchaser. Potentiality of land is also to be considered based on the available material.[11] The compensation—determination of market value—should be based on the comparable sales method and some element of guesswork is always involved in what is valid; such guesswork must be based on a firm foundation consisting of the totality of the evidence, including the sale price of comparable land and escalation of price of comparable land. The appreciation in value for every subsequent year after the base year should be taken into account.[12] In the above court decisions one of the basic principles delineated is that land that is to be acquired should be evaluated at the present value, meaning that if the nature of the land has changed it should have no bearing on the valuation of land. The critical question in this regard arises when some individuals improve the land and then there is no method to value such enhancements. Yet the standard of market value— despite the valuation method used to define it—is a fundamentally different approach from the standard of replacement cost. Court decisions have generally accepted three different valuation methods for determining market value:         

 (i) sales statistics method;

(ii) capitalization of income from land; and

(iii) expert assessment.


b. Compensation for structures

The valuation of structures (both commercial and residential) is carried out by the Public Works Department based on their schedule of rates. The schedule is revised every year and therefore the valuation is quite close to market value. But, if the project is not funded by multilateral agencies, final compensation is worked out on depreciated value of the property and not the replacement cost.


3. Constraints in Assessing Compensation

The valuation of land is riddled with a number of constraints, as described below.

(i) Compensation for land is worked out based on the sales statistics method, which is based on recorded sales value of at least the last 5 years. The problem with this method is the occurrence of understated values in sales deeds, given to avoid stamp duty. Sales statistics, as the only recorded document for land values, are routinely used by land acquisition officers (LAOs) who apply the comparable sales valuation method to determine compensation. As a result, compensation is undervalued and the gap between compensation and replacement value widens, creating administrative problems for the project authority.


(ii) Many long-term, but nonformalized, possessors of land do not receive compensation because their rights are not formalized. Examples include the lal dora or gair majoorba land in TNHP and paramboke land in WTC, where individuals do not have any legal document to claim ownership, though they have been living there for generations. Because entitlement to compensation for compulsory acquisition is based on land records, these deficiencies can result in delays, and nonformalized occupiers not receiving compensation.

(iii) Lack of updated land records is also a major problem. For example, the original owner may have died, the land has passed to heirs, but this transfer was never reflected in the land records. Or, land has been transferred to the new owner through an unregistered sales deed. The implementing NGO in package 5 of TNHP updated 1,258 cases during the survey.


(iv) Customary use and access rights to common property resources are not compensated. The statutory compensation provisions do not apply even though access to such resources plays an important role in the livelihoods of poor people, particularly in rural areas. However, in both TNHP and WTC, although compensation was not paid, access to most of the common properties, temples, and schools has been restored through an environmental management plan.


(v)Changed land use is one of the most critical issues in the land acquisition process and affects the amount of compensation. Over the years land use may have changed and at the time of valuation the basis of compensation is the land use mentioned in the original records available with the competent authority. (Numerous such cases have been identified in case study highways.) This leads o dissatisfaction among the titleholders and users of such land. The Land Acquisition Act is silent on the issue of changes in land use. However, in Section 23 it defines the matters to be considered in determining compensation and clearly states that it should be the market value of the land at the date of publication of notification under Section 4(1), i.e., the cutoff date.


(vi) “Unclear title” is a generic description that includes numerous types of title.The problem

with unclear title is that compensation is not paid to “titleholders” either under the Land Acquisition Act or the National Highways Act. However, the Orissa State Tribal People and Encroachment of Forest Land Act (1972) recognizes the rights of non-titleholders and scheduled tribe groups to the effect that, whosoever has occupied/ used any specific land for 30 years  would be entitled to ownership and thus eligible for compensation. But most states do not cover

the matters related to unclear titleholders. The critical issue with unclear title relates to people receiving settlement lands, e.g., Parwanas (government-settled land), Abadi land (where the Government settles people), and Bhudaan (where the landless are given land from village common land).


(vii) The competent authority under the Land Acquisition Act does not have to pay compensation for this land, as this is not transferable and not saleable. However, this contention is incorrect because they are the interested persons as defined under sections 3 and 9 of the Land Acquisition Act and under Section 3B of the National Highways Act. In TNHP, APs have been paid compensation for Abadi land and Parwanas.


(viii) Delayed payments may also be construed as under compensation.


(ix) The National Highways Act does not provide for the 30% solatium, yet the Land Acquisition

Act provides for a solatium equal to 30% of the market value. However, in WTC the competent authority added a 30% solatium (though this does not happen for every NHAI project).



National Human Rights Commission’s Recommendations on Development Induced Displacement[13]

1-There should be a mechanism to ensure equitable sharing of projects benefits with the displaced people. They may be in terms of providing direct or indirect employment or reservation of a quota of shares etc.

2-The conditional availability of certain resettlement provisions in the Relief & Resettlement Bill are matter concern.

3-the Bill should be in line with other existing legislations such as those related to lands of tribal people or forest lands.

4-Time limit should define for various stages in the process for acquisition of the land. Besides, their land has been acquired and has not been used for the intended purpose or any other public purpose, instead of auctioning the land, option should be given to the original owner to take it back on laid down terms.

5-there shall be no arbitrary displacements of individuals from their home or place of habitual residence by state authority. In particular, public interest should justify any large scale development projects. In all cases a large scale development projects, authorities should hold public consultation with people likely to be displaced.

6-The concept of “eminent domain” should be in line with constitutional obligation and the proposed amendment to the land acquisition Act and the relief and resettlement bill should provide for more scope for consultation/ participation of affected people both in the acquisition as well as relief and rehabilitation process.

7-Under the Rehabilitation and Resettlement Bill, 2007, a multiplicity of authorities are sought to be created. In several cases, modalities relating to their operation are “as may be prescribed’ by the Government. It is impetrative to define their roles so that they are complementary and there is synergy in their functions.

8-The guiding principle in caeses of development related displacement should be minimal displacement.

9-Where agricultural land is sought to be acquired, it should be mandatory that area of waste land equal to double the area acquired will have to be acquired and reclaimed for public purpose or at least funds for the same should be deposited in a special fund to be created for the purpose of rehabilitation of displaced persons or in the Central Relief and Rehabilitation fund.

10-People who are displaced due to development projects include not only property owners but also others such as tenant, farm laborers or others whose livelihood should be dependent on the land even though they may not have legal title to it. Therefore protection of their rights must be ensured.

11-It shall be mandatory for all local bodies to formulate land use plans and building rules so as to minimize and regulate conversion of agricultural lands for other uses. No non-agricultural activity should normally be allowed in areas marked for agriculture unless there are overriding and compelling reasons in public interest.

12-it has been experienced that where infrastructure projects like highways, roads are planned, the land values of the adjoining areas go up. Appropriate legislation should be put in place to charge additional duty / tax for such enhanced values at-least at the time of subsequent transfer of the lands and sums so collected should be transferred to the Central Relief & Rehabilitation Fund or any special fund created for the purpose of rehabilitation of displaced person.

13-Social impact assessment and understanding local aspirations are best captured through continuous dialogues with local peoples who are affected and NGOs. Hence while carrying out social or environmental impact assessment, local people especially those who are likely to be displaced and/or some expert NGOs may be consulted.

14-Norms of social impact assessment should be laid down and at least three alternatives should be examined in the same or different areas

15-where there are multiple displacements, it is necessary to compensate the displaced people appropriately e.g. by enhancing the solatium amount provided for in the bill or otherwise.

16-Regarding service of notice under Land Acquisition Act, Section 45(3) provides “When such person cannot be found, the service may be made on any adult male member of his family residing with him; and, if no such adult male member can be found, the notice may be served by fixing the copy on the outer door of the house in which the person therein named ordinarily dwells or carries on business, or by fixing a copy thereof in some conspicuous place in the office of the officer aforesaid or of the Collector or in the Court-house, and also in some conspicuous part of the land to be acquired.

The current practice in NHAI is to hire field revenue officials (Tehasildar) at the implementation stage. Instead, NHAI should hire the official right from the planning stage either on deputation or on contract basis. This will help NHAI draw up accurate land acquisition plans from the beginning, thus avoiding subsequent delays. The policy of NHAI should make it mandatory to disburse both compensation and assistance in one single payment. Since it is not possible to disburse both at one single point of time due to operational problems, NHAI should ensure that assistance is paid at least within 3 months of payment of compensation. NGOs should monitor the APs to ensure that amounts received are being used for economic activities. This should be made part of the NGO’s terms of reference (TOR). In order to have proper land acquisition plans at the project preparation stage, it is important that DPR consultants’ TOR specify one experienced land acquisition specialist, with a minimum experience of three highway projects. The 2003 NPRR provides for rehabilitation grants and other monetary benefits well beyond the compensation for the loss of land and other immovable property. The NPRR, on its face, appears to go a long way to meeting the requirements of ADB’s Involuntary Resettlement Policy. However, the NPRR being a policy and not legislation, it has no legal force. Therefore, it is important to integrate the NPRR with the Land Acquisition Act. The Government has not issued rules to the Land Acquisition Act, although it is considering doing so. Such rules, if they contained some specific valuation guidelines, could eliminate much of the undervaluation problems that currently occur in the Act’s implementation. In order to avoid high land-registration payments (which vary from state to state, from 8% to 10%) on purchase of property, reduced property values are shown on records. Since sales deeds are considered by the special land acquisition officer to arrive at a compensation value, it is invariably low. It is suggested that the registration value for property should be fixed, as currently done by Uttar Pradesh, based on circle rates. This will force people to record realistic prices for property


General Recommendations

Very few NGOs are short-listed for resettlement plan implementation and a small group of NGOs get repeated assignments. As a result, the time of these experts is divided into a number of projects and output suffers. It is recommended that every state should prepare a panel of NGOs that can be trained in R&R activities and implementation of resettlement plans. Implementation of resettlement plans requires teamwork, and the team has to be multidisciplinary in its composition. Every member of the team has to have a specific role. Table 27 suggests a team composition for resettlement implementing agencies. NGOs should also hire the services of a government-approved valuer on a short-term basis. The NGO should have experience of implementation of projects in the following fields:

(i) Rural development including forestry;

(ii) Health (specifically in HIV/AIDS);

(iii) R&R (in any field such as highways, roads, irrigation, industry);

(iv) Income-generation schemes (individual or group level, like formation of self-help groups)


NGOs should also possess:

(i) Adequate experience in handling large-scale databases;

(ii) Sufficient experience in using participatory rural appraisal/rapid rural appraisal/core rapid appraisal techniques; and

(iii) Adequate financial strength (must show at least 3 years audited financial statements, with various sources of income—domestic as well as international).

DPR consultants’ teams were also found to be very weak. Table 28 suggests a team composition for DPR consultants. Risk analysis, as an exercise in working out the nature and magnitude of risks, is conspicuous by its absence in most of the resettlement action plans being currently prepared for various projects across sectors (power, coal, highways) in India. Conventional project risk analysis evaluates the sources and magnitude of risks that may adversely influence the rate of return to project investments. But risks to people affected by the development interventions do not form a part of the risk analysis. Hence, risk and vulnerability analysis must be taken up as a mandatory exercise to provide necessary inputs for the resettlement plans to be prepared, in order to minimize the adverse impact of a project on people.


[1] Andhra Pradesh, Chhattisgarh, Jharkhand and Orissa, because these four states are rich in natural resources with a large population of tribal people.

[2]  Internally displaced persons.

[3]  Not having homestead or agricultural land.

[4]  Amended in 1984

[5]  Corresponding to Section 4 of the Land Acquisition Act.

[6]  Between issuance of Section 4 and Section 7.

[7] 500 families in plains and 250 in hilly regions.

[8] 62 square meters [m2] in urban areas and 124 m2 in rural areas.

[9]  District, state, and Ministry of Rural Development level.

[10]  Employment has to be given by the project authorities to only one member of each displaced family on a priority basis in the third and fourth categories of services in the project; while doing so, the project authorities are required to give due consideration to the legally reserved posts.

[11] Ravindra  Narayan v Union of India.

[12] Kashiben Bhikha Bai v Special Land Acquisition Officer, Land Acquisition Officer v Vijendra Reddy, and Special Land Acquisition Officer v Md. Hanif Saheb Baba Saheb.

[13]  National Human Rights Commission’s Recommendations on Rehabilitation and Resettlement of displaced persons due to development.

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