This paper reports results of a household survey in Singur, West Bengal concerning
compensation offered by the state government to owners of land acquired to make way
for a car factory. While on average compensations offered were close to the reported
market valuations of land, owners of high grade multi-cropped (Sona) lands were undercompensated,
which balanced over-compensation of low grade mono-cropped (Sali)
lands. This occurred owing to misclassification of most Sona land as Sali land in the
official land records. Under-compensation relative to market values significantly raised
the chance of compensation offers being rejected by owners. There is considerable evidence
of the role of financial considerations in rejection decisions. Land acquisition
significantly reduced incomes of owner cultivator and tenant households, despite their
efforts to increase incomes from other sources. Agricultural workers were more adversely
affected relative to non-agricultural workers, while the average impact on workers as
a whole was insignificant. Adverse wealth effects associated with under-compensation
significantly lowered household accumulation of consumer durables, while effects on
other assets were not perceptible. Most households expressed preferences for non-cash
forms of compensation, with diverse preferences across different forms of non-cash compensation
depending on occupation and time preferences
