Calcutta, Jan. 21: The state government will compensate encroachers holding up plots required for protecting Aila-hit areas, fuelling fears that the dole will encourage intrusions elsewhere, set a populist precedent with legal implications and make land acquisition all the more difficult.

The government has decided pay to encroachers at the rate of 25 per cent of the price offered to owners of plots shortlisted in the storm-affected areas of South and North 24-Parganas.

The order of the state land and land reforms department makes it clear that the scheme will be restricted to setting up Aila embankments. But law department officials said the scheme could set a precedent and have a long-term effect on removing encroachment in Bengal.

"The state is actually set to give encroachers a legal status for the first time by issuing the order. This apart, a precedent is being set by the state. The encroachers can move court whenever eviction drives are initiated and cite this case," an official said.

Officials feel the move will pose a threat to development projects because it may encourage more people to encroach upon government land and claim compensation.

"Dealing with landowners is enough of a hassle given the government's hands-off land policy. Now, the problem of getting land will get compounded as one may have to end up dealing with encroachers also," said a city-based industrialist.

The decision will also impose an additional burden on the already struggling state exchequer.

Block-level officials have started a survey to determine the number of encroachers, which is not expected to be less than 5,000. The compensation for landowners is Rs 3 lakh for an acre. District officials said they were looking at a payout of around Rs 10 crore to the encroachers.

"This is because the Aila embankment project is centrally sponsored. The project cost is Rs 5,000 crore and a total of 778km of embankments have to be erected with the amount. But it does not include compensation for encroachers," said an irrigation department official.

According to him, the government announced the compensation to avoid project delays that can put thousands of lives at risk.

The state could acquire only around 800 of the 6,000 acres required for the project because of resistance from encroachers.

"The project is needed for the people of the area but the encroachers cannot be evicted, particularly ahead of the rural polls. This is why the incentive will be given using public money," an official said.

While the government is confident of tackling the encroachment problem in the Sunderbans through the pay-off, infrastructure analysts expressed concern over the fate of development projects in Bengal.

The state is yet to hand over land for widening major national highways because of resistance from encroachers.

If other encroachers also demand the compensation, the cash-starved state will be in a quandary as officials of the National Highways Authority of India (NHAI) have said it will not be possible for them to compensate encroachers.

"The Centre does not allow us to compensate encroachers. So we won't be able to put in money for them, though the widening projects of NH34 and NH31D are hanging in balance for the past two years owing to non-availability of land," said an NHAI official.

Besides, the state's much-parroted land bank is also facing the encroachment problem. According to the latest data available, 35 per cent of 3 lakh acres ' the total deposit in the land bank ' has been encroached upon.

"The chief minister promises to arrange land for industry from this land bank. It does not appear that the state will apply force to vacate the plots," an official said.

"The future of investments in these plots remain uncertain as investors will not take the responsibility of the encroachers. On the other hand, the state does not have money to compensate all these encroachers," the official added.