Business Today

BT guide to land acquisition

If you’re preparing to go up-country in search of open spaces, here are a few pointers you could keep in mind.

Suman Layak | Print Edition: September 21, 2008

Communicate directly
As experiences of the Jindals and the Dhoots of Videocon reveal, direct engagement with local land-owners and farmers is a good idea. Remember, if heÂ?fs content, so will you be. If heÂ?fs unhappy, he could make your life, and that of your workers, miserable. Handle the process with sensitivity and dignity. Parting with land is an emotional issue, more so for a farmer. Also, you could do well to eliminate the middlemen looking to make a quick buck, and who are responsible for driving up prices via speculation.

Up and running: Mahindra SEZ in Chennai
Up and running: Mahindra SEZ in Chennai
Look beyond money
Whilst throwing hard cash may seem to be the easiest thing to do, donÂ?ft go into rural India with the assumption that your money alone will lure the humble farmer. Perhaps a better way to buy the trust of the community is to create the social infrastructure they need: Housing, schools, roads etc. You can also offer alternatives to cash, like jobs, shares, a share of your profits, and alternative land.

Rely less on government
There are some areas where government intervention is inevitable: Like, for instance, approval of rehabilitation & resettlement packages. But it helps to depend less on policy and more on the robustness of your R&R package. If you keep waiting for government policy to suit your project, you could well be waiting for Godot. For example, a host of mega-projects have been hanging fire for some time now, because their promoters have been waiting for an amendment of the Land Acquisition Act. Its current status: Pending in Parliament.

Time is money
Once you zero in on the land you think is ideal for your project, your next task would be to determine how much you should be willing to pay for it. The easiest option would be to go by the governmentÂ?fs Ready Reckoner. However, that may not be the best alternative, as those prices may be a bit dated and might not take into account more recent appreciation. In fact, it would make sense to offer a price higher than the prevailing one. After all, if this helps you get the land quickly, it will also enable you to get your project on stream faster. Which means you start generating revenues faster, and stand a better chance of making the project viable. That's exactly why the Mahindras have been able to get the Jaipur SEZ up and running in two years.

Avoid uprooting villages
The Reliance Group's Mumbai SEZ may be having its problems, but one good thing about it is that it is determined to acquire the 8,114 hectares of land without shifting even one of the 45 villages in the Raigad district in Maharashtra. Ditto with the Mahindras who have religiously avoided villages.and agricultural land.when building their SEZs.

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