FM nixes stock-for-land compensation model

Finance Minister P Chidambaram today ruled out stocks or shares as a form of recompense to those who might have lost their land while making way for industrial development.

At the first meeting of the Group of Ministers on the proposed rehabilitation policy and amendments to land acquisition acts, the finance minister pointed out legal and technical loopholes in the policy that visualises handing over 20 per cent of the value of shares to oustees.

The finance minister was commenting on the land-for-shares scheme suggested by Jindal Steel for land losers in Salboni, West Bengal, which has attracted considerable interest from other industrial houses with projects with large land requirements.

The government's policy also has implications for the 746 applications, of which 350 are pending, that have been submitted for special economic zones for which most of the land needs to be acquired.

The acquisition of land, principally agricultural land, had become an increasingly contentious issue and it was against this backdrop that the government decided to formulate a rehabilitation policy for land losers.

Chidambaram said policy pressures on industrial houses to give shares would only discourage them from setting up units because this would mean a long term "" possibly permanent "" obligation on the part of industry.

"This might discourage development," he said. He added that he was not in favour of a one-time settlement for oustees either but that the proposed settlement terms in the policy being considered could be counter-productive.

Meanwhile, Rural Development Minister Raghuvansh Prasad Singh, whose ministry has formulated the policy, reportedly said, "Development is not like the freedom movement which demands sacrifice in return for the greater good. For development to be meaningful, all strata of society must be on the same page."

The finance minister also pointed out that since rehabilitation was on the Concurrent List, there should be a well spelt-out policy on what kind of amendments could be allowed by states, if it was constitutionally possible.

Sources confirmed that the meeting began with a presentation by Singh, after which the finance minister made his objections to the policy known.

Commerce Minister Kamal Nath and Science and Technology Minister Kapil Sibal were absent, although Agriculture Minister Sharad Pawar, Urban Development Minister Jaipal Reddy, and Deputy Chairman of the Planning Commission Montek Singh Ahluwalia attended.