For construction of the National War Museum at the Princess Park locality near India Gate, the Defence Ministry will have to find a place to settle over 100 families living in that area.
The families are living in over 200 servant quarters built on 14 acre land where the memorial is planned to be built and they have to be removed from there, Defence Ministry officials said.
People living there have been offered alternative land in Delhi Cantt and some other nearby areas for building their houses, they said.
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Defence Minister Arun Jaitley, who had visited the site two weeks ago, was also briefed by top Army officers including Army Chief Gen Dalbir Singh Suhag on the issue at the proposed construction site.
The servant quarters were built at Princes Park in the pre-Independence era and these families have been living there since then. The site is historical because the Indian national flag after Independence was first time raised there.
The Defence Ministry is preparing a Cabinet note for the construction of the National War Memorial at the India Gate complex and the National War Museum at the Princess Park at a cost of Rs 400 crore.
The need for removing the encroachments before commencing the construction will also be mentioned in the note, the officials said.
The museum and the memorial are planned to be connected through an underpass.
The memorial will have names of more than 21,000 Indian troops who have laid down their lives in various operations since 1947.
The Army had given a presentation to Prime Minister Narendra Modi on the issue on August 6 where the force was asked to involve international designers and architects to build a grand memorial as promised by BJP during Lok Sabha poll campaign.