Land Acquisition and Compensation

This paper reports results of a household survey in 12 Singur villages, six in which lands were acquired for the Tata car factory, and six neighbouring villages, with random sampling of households within each village. The results show that (a) the size of plots acquired were non-negligible; (b) the majority of those affected were marginal landowners engaged in cultivation; (c) the government's compensation offers were approximately equal to the reported market values of acquired plots on average, but the inability of the official land records to distinguish between plots of heterogeneous quality meant that a substantial fraction of farmers were under-compensated relative to market values; (d) those under-compensated were significantly more likely to refuse the compensation offers, as were those whose livelihoods were more dependent on agriculture; (e) incomes and durable consumption of affected owners and tenants grew slower between 2005 and 2010 compared with unaffected owners and tenants; (f) earnings of affected workers fell faster than unaffected workers. Therefore, land acquisition resulted in substantial economic hardship for large sections of the rural population, for many of whom compensation offered was inadequate.