Therefore, we offered to give them rentals in proportion to their contribution of land," Raheja Developers chairman Navin Raheja said. A farmer is eligible for rentals from a little over 15,000 sq ft of developed space for every acre of land contributed. This means a farmer could get a rental of Rs 2-4 lakh per month for every acre of land.

Raheja has also promised free education to two children and free training and a job to one member of the family. "Developers need to be more creative to be able to accommodate the needs and aspirations of a local population whose land they plan to acquire," Mr Raheja said.

A good compensation package ensured smooth acquisition of about 5,000 acres by Sri City for its multi-product SEZ near Chennai. Not only have the developers given farmers a good price for the land, they are also giving them training to work in the SEZ and have promised one job per family.

The SEZ, which has been notified, has already attracted investments from a number of companies from around the globe including the US, Switzerland, Korea, Spain, Italy, South Africa and Indonesia.

Bharat Forge's multi-product SEZ near Khed in Pune is another example of winning farmers over with a variety of benefits. The first phase of acquiring about 3,000 acres is over in the region. The compensation package includes a payment of Rs 17 lakh per hectare and training and jobs for project-affected families.

Farmers have also been given a buyback option up to 15% of the developed land after paying the original cost of the land and an additional 50%. About 1,000 farmers have exercised the buy-back option and a company has been formed inside the SEZ which will be a permanent source of income for the farmers. Those who lose their houses are also being given 370 sq ft houses in a new housing colony.

Speaking to ET, Rumjhum Chatterjee from Feedback Ventures, a consultancy company which is helping a number of developers including Bharat Forge develop suitable compensation packages for the displaced, pointed out that it was not just enough to give monetary compensation to the affected.

"Our aim is to see how the quality of life of the locals affected by a project improves. Apart from adequate compensation, it is also important to see that the physical infrastructure of the villages is improved and the individual problems of particular villages addressed," she said.

Constant interaction with the villagers and complete transparency was the key to a win-win situation for both developers and the project affected, she said. Iffco managing director US Awasthi too stresses on the need to improve the lives of people living around an industrial project.

Iffco, which has been pooling 5% of its project profits for integrated rural development program for villagers living within a radius of 20 km, plans to do the same for its food processing SEZ in Nellore. "Although we already had the entire land in our possession, we will use 5% of the profits every year for building infrastructure around the area," Mr Awasthi said.

The uses which the fund could be put to include providing drinking water and health care facilities and building schools. "We are preparing a report on the different innovative packages adopted by developers in the states of Haryana, Andhra Pradesh, Maharashtra and Tamil Nadu to buy land from farmers. It should be out in a few months time," Mr Pillai said.