Perhaps the biggest cost of large dams is displacement of people, whose lands are submerged and who have to be relocated. Besides losing their cultural heritage, the displaced people have to leave their agricultural lands, which they have developed through many generations. It takes a long time to develop new land for agriculture. Also resettlement usually takes place on deterioration land, which not fit for agriculture. In the case of the Narmada river project, 350 thousand hectares of land displaced.
The resettlement of so many people will be a formidable task. Most of the people from this submerged area are given compensation ranging between Rs. 80 and 200 per acre.
They need land in exchange for their submerged land. Also on the money they had got as compensation, they had to pay some kind of tax. Most of the people from this area have been dispersed in different places. Their way of life, culture and identity disappear in the submerged area.
Usually, attention is given to the development of the command area; those from outside are either given compensation for their lands, or given undeveloped lands in desert or forested area.
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The development costs of these lands are normally out of the reach of the displaced people. No thought has been given to provide a similar employment to these people. No plans have been prepared to provide employment to these people. Firstly, the compensation paid by the Government for their lands, house, physical and cultural environment, and the shock of leaving their place, where they continue their is low.
Secondly, no guidance has been given to them for utilizing the money of compensation. In the case of the Narmada Valley Project and the Sondur River Project in Chattisgarh most of the people from the tribal areas had spent their compensation money on liquor and social celebrations, even before work on the dam began. While people belonging to the command area become prosperous, people belonging to the submerged area face poverty.