ArcelorMittal, the world’s largest steel maker, is in talks with bankers to evolve a mechanism for providing appropriate investment advice to the farmers and local people whose land would be acquired for its two upcoming greenfield integrated steel plants in Orissa and Jharkhand.
Vijay Bhatnagar, chief executive officer of ArcelorMittal India, said, “The move is aimed to ensure that these people, who have never handled large sums of money, do not get misguided by unscrupulous elements and end up losing their money. The objective is to figure out ways for these people having very little or no education and financial knowledge to get the highest possible returns through safest possible investments.”
Through its talks with the bankers, ArcelorMittal is aiming to evolve a mechanism or an appropriate model to ensure that a regular periodical income is assured for the land losers.
“We are very clear that these investments would not be made in our company as that could again end up sending out wrong signals,” Bhatnagar clarified. Public hearings for land acquisition for the ArcelorMittal project will begin later this month and the company hopes to do the ground breaking work in the first half of 2009.
This, probably, will be the first instance where a company with upcoming greenfield projects in the steel industry, is also taking up the responsibility of providing financial guidance on investments to the people whose land is being acquired.
Apart from providing financial guidance, normal practices adopted by all companies such as training for skill up gradation and attempt to provide jobs to eligible persons in ancillary units would also be replicated by the steel giant.
It may be noted that some of the land losers in Orissa and West Bengal after receiving the compensation amount in lieu of land for the big projects lose substantial portion of their amount either through misuse or by lending the amount to small time local traders at very high interests but without necessary legal documentation.
Keeping in mind the Indian social context, ArcelorMittal is also of the view that 50 per cent of the compensation amount should be desirably be put in the name of the wife of the land’s titleholder as it is she who actually runs the family and brings up the children, Bhatnagar said.
Since the compensation amount has to be legally given in the name of the titleholder of the land, the company plans to involve the local village panchayats and NGOs to create a conducive atmosphere for putting 50 per cent of the money in the wife’s name.
“This would function as a sort of back up for the lady to run the family and bring up the children,” Bhatnagar said.
