Special Economic Zones (SEZ) have become a bad word, no thanks to the almost naked lust for land of the promoters. Farmers and villagers from whom land is acquired by governmental agencies at throwaway prices well below the market rate, are at daggers drawn.
But the Jindal group which is setting up a steel mill in West Bengal has come up with an interesting plan. Not only will it compensate the 742 families, who have to make way for the plant, in cash for the entire value of the land, it will also provide an equal amount in shares of the new company, at par.
JSW Bengal Steel Ltd won’t roll till 2011, but the shares of the landowners will be deposited in a trust. They will have the option to sell the shares when the company goes public. Jindal will acquire nearly 4,000 acres from the government at Rs 1.9 lakh per acre. But the remaining 570 acres will have to be acquired directly from the farmers.
Is this the way to go?
Read the full story here: Jindal offers shares for land
Good post… i read this in the morning and thought this was a smart move for a corporate and win situation for the land holder.
Very creative. However, I still think the best way to do it is to get the government out of land acquisition. Once a company declares an intent to open a factory, it should be up to the farmers (or any other owners) of the land to sell it to the company at whatever price they negotiate. Let the market do the work. Our farmers are not so dumb as to be taken for a ride by companies.
The companies will still have to hold out sops to the community (jobs, taxes, community facilities), and that is fair.
I agree with GK3S. But why bother in the land of the Reds?