Why Does The Govt. Always Fail To Pay Proper Compensation?
The Government Of India has a history of paying inadequate compensations to the residents if the land is to be acquired for development purposes. I wonder why? Is it because the govt doesn’t value people’s property? Or it because it doesn’t value people at all? In every case there is a lot involved and in some cases it is difficult to judge who is right or wrong but can you think of someone being paid a price as low as Rs 24 per sq. yard for a piece of land close to Delhi? The land that should be sold for 4-5 lacks per sq yard is being bought for Rs 24 per sq yard? Yes, the govt is paying the Nangal Dewat villagers that kind of money for the proposed airport.
At current market rates, the price of his land would be about Rs 4-5 lakh per square yard but the Government is offering him Rs 24 per square yard. It’s the price that was fixed in 1972, when the land was first acquired.
In 1972 the govt had agreed to buy the land from the villagers at Nanagal Dewat at Rs 24 per sq. yard. At that time that might have been a fair compensation but after 30 years now it seems inadequate. And the govt. wants to go ahead with the original plan. I think the compensation should be re-evaluated now and should be made at fair market price. The DDA in its zeal to seal the deal before the commonwealth games is not paying any attention to the courts order as well.
The villagers of Nangal Dewat even went to the High Court seeking proper rehabilitation and compensation. The court then issued a stay order but the Delhi Development Authority (DDA) took no note of the order.
DDA instead told the villagers to vacate the village in 24 hours or else they would lose whatever little compensation they were entitled to.
While I think it is OK for the govt. to acquire property in the name of development, It is imperative of the govt to pay adequate compensation and relocation for the affected. The general observation is that govt. has failed to do so. I wonder why?
I am sure there is more to it than meets the eye. Maybe the govt. has its own reasons to do such a seemingly unfair deal. Can someone point out the arguments for the govt? Can some one make a case that the govt is doing the right thing? I would be more than glad to learn the other side of the story to get the complete picture.
Till then I wonder why?
March 13, 2007
Posted in: Government, India
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Why Does The Govt. Always Fail To Pay Proper Compensation? « The Great Indian Mutiny - March 13, 2007
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Your blog is becoming my current event expression forum -
Let me give you 2 bits about the Old Indian Economy and its remaining bits and pieces.
In world of valuation there are two terms Book value and market value. The issue is Indian government never changes Book value to reflect changes in market.
So something that was worth 10 rs in 1947 is still 10 rs.
Weird as it may seem Govt has its own way to appreciate its book value to reflect real market changes -
To give you few examples,
Government Servents pay is given to the rate decided by Pay commission. Then Govt pays DA to get the salary to respectable level.
If you Look into schedule of rates for Govt contracts the rate for Cement (if not revised) may be 50 Rs while actual cement is sold at 200 Rs. So match up this contractors fill up 300% above rates.
Coming to land there no such fair market valuation is involved. Whatever is the cost decided at the time of registration never gets reviewed making the book value of the land or the real estate virtully COMIC. Thats the same reason why there is a white money and black money people why buying real estate.
The white money is what “Fair market value of the property” per Govt. Black money paid on top is actual market price. This way govt makes two mistakes… Makes the property look really cheap. And it looses all the taxes on Black money.
Practically got losses nothing to call somthing at its actual market price but somehow nobody bothers to change it.
Now coming to the issue that you are raising, as there are no changes to registered price of the land its the real pricepf tthe land in the blind eyes of Government.
There are two solutions though,
1. Govt changes it its rules to decide the value of the property (As its the sole decider in social economy. In capitlist economy market decides the price)
2. Or judiciary forces Government to make these changes
Define Irony —-
So much for the Open market. SEZ is supposed to be the part of making open markets and bringing capitalism and we are using old socialist (Partly communist) laws to make that happen.
Wah re Government !!!
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