Land acquisition: A new capital city in farmland

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  1. Oct 29, 2015


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    May 6, 2015
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    Land acquisition: A new capital city in farmland
    The Andhra Pradesh government’s innovative land pooling model is not all win-win.

    Written by Sreenivas Janyala | Guntur | Published:October 29, 2015 2:10 am

    Prime Minister Narendra Modi with Andhra Pradesh Chief Minister N Chandrababu Naidu and Telangana Chief Minister K Chandrasekhar Rao at the foundation laying ceremony of Amaravati. (Source: PTI)
    N Chandrababu Naidu’s land pooling scheme (LPS) to build a capital city — Amaravati — for the new Andhra Pradesh state post-bifurcation has been hailed for successfully acquiring some 33,000 acres from farmers without much protest. The fact it happened relatively smoothly, even while a national debate raged on the Centre’s Land Acquisition ordinance, has made many sit up and takes notice.

    But there are still those who doubt if farmers really stand to benefit from the scheme, which envisages giving them back developed residential and commercial plots ranging from 900 to 1,700 square yards for every one acre (4,840 square yards) of land surrendered. Farmers will further receive an annual compensation of Rs 30,000 to 50,000 per acre — with a 10 per cent yearly increase —for a ten-year period.

    “If the construction of the capital gets delayed, farmers will be left in the lurch. Although the government may keep paying them for 10 years, their real money is from the developed plots promised in lieu of land. The value of these plots would increase only when the capital city develops and becomes livable,” noted E A S Sarma, a retired IAS officer-turned-activist.

    The farmers from whom the 33,000 acres were acquired include absentee landlords living in Hyderabad, Vijayawada, Guntur or even abroad, who had given their lands on lease. Besides, there are the small farm-owners with one or two-acre holdings. “It is they, apart from tenant farmers and agricultural workers, who are faced with uncertainty. There is a big question mark on what will happen to their livelihoods with their lands gone,” Sarma pointed out.

    Yet, the overall smooth acquisition has led many to view the LPS even as an alternative model of land acquisition, without diluting the consent requirement as the Centre’s controversial ordinance had sought. “Some political leaders alleged we used coercion and intimidation. But you cannot do that with so many farmers in today’s times, especially when land acquisition has become a big issue and projects have got stalled because of it. On the contrary, we were able to convince farmers about our package,” claimed Ponguru Narayana, AP’s Urban Development and Municipal Administration Minister.

    The LPS package, announced by the chief minister Chandrababu Naidu on December 8, is advantageous for the state government, as its financial outgo is limited to only the annual monetary compensation of Rs 30,000-50,000 per acre. Farmers’ gain is mainly from the value accretion to the developed residential and commercial plots they are entitled to, amounting to up 35 per cent of the land acquired.

    The state government has even waived-off stamp duty and other taxes in the event of their selling these plots. “Some farmers have also sought income-tax relief on capital gains, a request we have forwarded to the Centre,” informed an official.

    To stave off criticism of the scheme only benefitting landowners, the state government has proposed setting up a Capital Region Social Security Fund for the estimated 12,000 displaced families of agricultural labourers and tenant farmers. Each family will receive Rs 2,500 per month for 10 years or Rs 30,000 annually, “which is roughly what they would make from cultivating 3 acres,” the official added.

    According to Naidu, nowhere in the country has such a comprehensive land pooling policy and package been offered: “We have taken great care that landowners as well as tenant farmers and farm labourers benefit, and do not feel they have lost something.”

    The state government will issue ‘land pool ownership’ certificates from December onwards once plotting of the capital region begins, stated the official quoted earlier. Out of the total 33,000 acres acquired, almost 8,000 acres will go back to the original landowners. Of the remaining, 15,000 acres has been set aside for open spaces, including parks, lakes, ponds and open air auditoriums. The state government’s buildings — secretariat, legislative assembly, Raj Bhavan, high court, official accommodations, etc — will come up in just about 8,000 acres.

    “That is the idea of Amaravati — a green capital with lots of open spaces, walkways and parks. There can even be land for companies, banks and others wanting to establish offices in the capital region. Such allocations can be linked to say, creation of a certain number of jobs per acre given,” said Parakala Prabhakar, communications advisor in the AP government.

    How do farmers themselves view this whole project?

    Forty-two-year-old Bezwada Ramesh Babu of Mandadam village in Guntur’s Thullur mandal is keeping his fingers crossed. The 100 acres of wetland his family has given up would fetch Rs 30 lakh income in annual compensation alone. But the real unlocking of value will be from the developed plots to be received from the government: “I am told we will get the ownership certificates latest by March. But there is uncertainty whether the government will fulfill its promise of developing the plots and handing these to us. Also, there has been a lull in real estate activity, though prices seem to be going up again after last week’s foundation stone laying for the capital. A wetland acre now costs Rs 1.7 crore to Rs 2.4 crore”.

    The same uncertainty is echoed by Umamaheshwara Rao from Thullur village, who has given 50 acres: “The main concern for us is, from where is the money for building the capital going to come from, more so when the Centre has not announced any special package or assistance to AP? Unless the capital city is built as planned, there will be no appreciation of the plots that we are supposed to get back.”

    While the state government has promised to allot the residential and commercial plots to farmers as close as possible to their surrendered lands, this may, however, also have to be combined with a lottery system. “All these things are still being finalised. It would be a challenge to keep all the farmers happy,” admitted the minister Narayana.

    Andhra Pradesh’s pooling scheme

    The developed plots farmers are to receive under the AP government’s pooling scheme for constructing a greenfield capital is based on the type of land being acquired.

    As per the package, owners of dry land having clear title documents will get 1,000 square yards of residential and 200 square yards of commercial plots for every acre surrendered. The corresponding entitlements are lower, at 800 and 100 square yards, for owners of dry assigned land.

    Owners of wet or irrigated lands get a better deal. Here again, the entitlement differs between owners of clear titles (1,450 square yards of residential and 450 square yards of commercial plots) and those with assigned lands (1,250 square yards residential and 450 square yards commercial).

    Dry land and assigned wetland owners will additionally receive an annual compensation of Rs 30,000 per acre per annum for 10 years with a 10 per cent hike every year. The base compensation is more, at Rs 50,000 per acre per annum, for wetland owners with clear titles, who mostly grow fruits, vegetables and high value horticultural crops near the Krishna River.

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