Kerala government under Chief Minister Pinaray Vijayan is working hard to change the perception that the state is a hard place for investors because of militant trade unionism and tardy economic development.

Acquiring land for projects has been a major headache of potential investors in the state, a problem that the Communist Party of India (Marxist)-led left-party government wanted to defuse. This perception is set to change under Vijayan.

A major problem faced by investors is land acquisition. In order to address this problem, the government has initiated policy reforms to speed up the process.

One of the decisions is a   generous compensation policy which is different from the existing provisions of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act.

Among the sops offered include fair compensation even for   encroached land and puramboke land.

The new policy became effective from Dec 29, the day on which an order was issued following a meeting of top officials.

Along with the various compensation components in the second schedule of the Act of 2013, more components have been added taking into consideration the special social scenario in the state, reports have said.

This would mean even encroachers, who have been living or running their business on poramboke land for a minimum of three years preceding the date of notification of the Act, would benefit. Such encroachers will be given Rs 5,000 for six months in addition to the value of structures or improvements made on the land.

While the employees working in commercial establishments for three years prior to the acquisition will receive Rs 6,000 per month for six months for loss of livelihood, a one-time assistance of Rs 200,000 will also be granted to meet all shifting charges and social costs for the commercial tenants.

But the one time assistance will not be granted to companies, banks, financial institutions and large shops having a carpet area of more than 2,000 sq ft.

The residential family tenants will be given a one-time shifting assistance of Rs 30,000, while the amount will be Rs 100,000 for places of worship (in addition to the land and structural cost).