The one-per-cent solution

To end protests in Himachal,cash transfers forever from power plants to affected families

Himachal Pradesh,a state waiting to tap most of its power potential,has devised a way out of the deadlock it often faces when such projects run into protests over issues such as environmental damage and peoples livelihood.

Under a new government policy,every upcoming hydroelectric power project will have to reserve one per cent of its production for project-affected people. The Directorate of Energy will sell this power in the open market and transfer the cash into the bank accounts of these people,with the beneficiaries to be identified under existing guidelines for project-affected people. These will include not only those who will lose their homes and livelihood they will be compensated in any case but everyone else living in areas identified as project-affected. The cash,to given under the local area development fund or LADF,will keep flowing into their accounts as long as the project generates power.

The policy,possibly the first of its kind in the country,was cleared by the cabinet last month,and the power department issued the notification on Wednesday. Looking at a potential 23,000 MW,of which only 7,700 MW has been harnessed,the government hopes to win over local panchayats and people by making them beneficiaries of projects they would normally oppose.

The power so reserved will include a bonus for those living below the poverty line. Fifteen per cent of this one per cent will be for BPL families,while the remaining 85 per cent will be shared among all beneficiaries,BPL included. Deputy Commissioners will be tasked with esnuring that the transfers are made.

The one per cent will be over and above the 12 per cent that the government gets as royalty from all hydel projects commissioned since September 7,1990. The sale of this share has been adding Rs 1,200 to Rs 1,400 crore to the states annual revenues,but this does not include any direct benefits to project-affected people.

Among promoters of existing projects,the Sai Foundation provides free power supply from a project to families in Tohs village,a liability of Rs 10 lakh a year.

Deepak Sanan,principal secretary,power,called the new policy a most innovative move. Our calculations show that some of the families in the districts of Lahual-Spiti and Kinnaur,areas with a low population,will get cash transfers up to Rs 1.50 lakh per year at present market rates, he said.

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Organisations opposing hydel powers have called the plan mischievous. Panchayats will be too willing to grant no-objection certificates,irrespective of the threat to the environment and peoples livelihood. Since the cash benefits are for the projects lifetime,its an attempt to create a rift among the people, said R S Negi,a retired IAS officer who now heads the Himlok Jagriti Manch.

Kinnaur,where Negi is based,has a potential of 12,000 MW,half the states total. A dozen or so projects are coming up in the Satluj Valley.

The move is expected to motivate locals to ensure that projects are completed within the schedule, said Revenue Minister Gulab Singh,adding that it would make them think before opposing a project,since that would deprive them of huge incentives.

The government is examining the possibility of extending the policy to projects beyond new ones,the power secretary said. Two companies developing projects GMR Group and JSW Energy have filed a petition in court seeking that policy be restricted to newly allotted projects,not those where agreements have already been signed.

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We will contest their claim in the court, said Sanan. He said he had held at least three sessions with power producers associations before the policy was worked out.

ONE OF ITS KIND

Land pool or cash

A choice is offered to farmers whose land is being acquired for any residential colony or commercial complex. They can claim either a handsome compensation or a share in the colony/complex. On a residential complex coming up in Mullanpur near Chandigarh,farmers were offered Rs.1.30 crore per acre but nearly all opted for the pool scheme for every acre surrendered,they stand to get two developed,500-square-yard residential plots and a commercial site. Currently,500-sq-yd plots there fetch over Rs 1 crore in the market.

Give now,take more later

The draft of a new land acquisition policy has a provision that those who surrender land can benefit,if they wait long enough,from a future jump in real estate prices. The government will issue an infrastructure development bond against the property surrendered by the owner,who can encash it at any time for an amount based on then prevailing market rates. Another suggestion is to set apart a quantum of project shares for those whose land would be acquired for the project.