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Explained | The controversy over land acquisition by the Neyveli Lignite Corporation in Tamil Nadu


An earthmover clearing fertile lands acquired by NLC India Ltd. in Valayamadevi on Wednesday, July 26, 2023.

An earthmover clearing fertile lands acquired by NLC India Ltd. in Valayamadevi on Wednesday, July 26, 2023.

The story so far:

Over the past one year, areas near Valayamadevi, Karivetti, and Kathazhai, located near the opencast mines of Central Public Sector Enterprise (CPSE) NLC India Ltd. (NLCIL) in Cuddalore district remained a hotbed of protests over the latter’s move to take possession of lands acquired more than a decade ago for its expansion activities.

Neyveli in Tamil Nadu accounts for one of the largest lignite deposits in the country. NLCIL generates about 6,061 MW of power across its various project sites including those in other States and around 50% of the total power is supplied to Tamil Nadu.

With NLCIL planning to exploit the lignite reserves available to the south of its existing mines for the establishment of Mines-III, the move triggered mass protests by the farmers and the local residents.

NLCIL acquired as many as 304 hectares of land between 2006 and 2015 in six villages abutting the mines. Of this, NLCIL had taken possession of about 273 hectares of land while 31 hectares remained unutilised. Farmers, whose lands (31 hectares) were acquired for the expansion project, continued to cultivate crops over the years and harvested them. This week bulldozers entered the agricultural fields to uproot the crops in a bid to take possession of the acquired land.

What is the position of the Tamil Nadu Government and NLCIL?

The NLCIL and the State Government see the takeover of these lands acquired by NLCIL in the past as essential for industrial development.

NLCIL maintains that it had awarded compensation ranging from ₹2.4 lakh per acre to ₹6 lakh per acre to a majority of the landowners. The company has come forward to pay a minimum compensation of ₹25 lakh per acre for those who had refused to part with their lands earlier. A sum of ₹75 crore has been set aside to provide compensation to 1,088 landowners.

What is the contention of the landowners?

Those whose lands have been earmarked for NLCIL expansion claim the compensation for the lands was fixed in 2006 and the costs had increased manifold in the last few years and a revision should be done according to the present land rates. They have also sought a rehabilitation package including a permanent job for a member of each family in NLCIL.

One of the major factors behind the continuous protests that spilled over across the district is that lands far in excess of NLCIL’s requirement for mining have been taken over.

Why the land acquisition has become controversial now?

The recent row over the land acquisition move by NLCIL is primarily because the problem of adequately compensating and rehabilitating those who get displaced by such projects remains unresolved.

Landowners are seeking compensation packages that match what they have received from NLCIL in the past. This is the reason behind the continuous protests.

An increased drive for taking possession of the lands for the diversion of 1.8 km of the Upper Paravanar canal in Valayamadevi for the Mines III project has evoked strong opposition from the farmers’ associations, and representatives of various political parties.

The NLCIL has maintained that land is acquired in various phases as per the requirement provided by the Mine Planning Department. Due to inadequate acquisition of land for the last 10 years, NLCIL does not have the required land for lignite mining.

While the farmers have sought more time to harvest the crops, the NLCIL has rejected the plea and continued with the drive.

This week, the NLCIL’s move to use of earthmovers to plough through fertile lands planted with standing crops has generated massive resistance against the CPSE.

What is the way forward?

NLCIL should temporarily halt the ongoing drive to take possession of the lands and give the landowners time to harvest the crops.

With most of the landowners being small and marginal farmers with minimal landholdings, their livelihood also remains affected. Hence, activists feel they should be adequately compensated. The question of permanent employment in NLCIL, a long-pending demand of the landowners should be addressed in a concrete manner since many who had parted with their lands during the establishment of the CPSE decades ago were left in the lurch.


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