Economic Impacts of Displacement on Tribals: Landlessness, Joblessness and Impoverishment

When a tribal family loses their land to a mining project, a dam, or a factory, the loss goes far beyond a plot marked on a revenue map. Land is the base on which food, income, identity, and social standing are built. Once it is gone, the family does not simply need a new address – it needs an entirely new way to survive. This is why economists and anthropologists studying displacement treat the economic fallout as a distinct and severe category of harm, one that pushes communities that were already at the margins of the Indian economy into deeper poverty.

Landlessness: the first and deepest wound 🔗

Sociologist Michael Cernea’s Impoverishment Risks and Reconstruction model, developed from decades of resettlement research, identifies landlessness as the principal risk in any displacement process. Expropriation removes the very foundation on which productive systems, trade, and household economies are built, and this holds with particular force for tribal communities, where land is rarely just an economic asset. It is tied to clan identity, seasonal cultivation cycles, and often sacred groves or ancestral burial grounds.

In India, the law that governs this process is the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, which replaced the colonial-era Land Acquisition Act of 1894. It requires a Social Impact Assessment before land is taken and mandates the consent of the Gram Sabha in Fifth Schedule areas, which cover most tribal-majority regions. On paper, this is meant to give communities a real say before their land changes hands.

Why the safety net rarely holds 🔗

In practice, a parliamentary review of the Act found that Gram Sabha consent is frequently reduced to a formality rather than a genuine consultation, and recommended making it mandatory across all acquisitions, not only in Scheduled Areas, as noted in a standing committee report on the Act’s implementation. Once land is acquired, most tribal households have no realistic path back to landownership. Agricultural land in tribal belts is rarely available for purchase nearby, and the compensation received is usually too small to buy an equivalent holding elsewhere. Families that were once independent cultivators are converted, almost overnight, into a landless population with no comparable asset to fall back on. A recent review of tribal displacement scholarship in India confirms that this shift from owner-cultivator to asset-less household is one of the most consistent and hardest-to-reverse outcomes of project-induced displacement, as documented in an integrative review of tribal displacement research.

Joblessness and occupational shifts 🔗

Loss of land does not only mean loss of a place to live. For most tribal households, land was also the source of a livelihood, whether through subsistence farming, sharecropping, or wage work on nearby fields. When that land disappears under a mine, a reservoir, or a factory complex, the jobs tied to it disappear too, and there is often no equivalent occupation waiting on the other side.

This shift plays out differently depending on who is affected. Landowning families at least receive monetary compensation, even if inadequate. Landless agricultural labourers, tenant farmers, and artisans who depended on the local economy built around that land typically receive nothing, since compensation frameworks are structured around land title rather than livelihood dependence. Research on the human costs of development-led displacement in India has repeatedly noted that compensation and rehabilitation support, even when written into policy, frequently fail to reach a substantial share of those actually affected, a pattern documented in the same review of displacement scholarship.

The mismatch in rehabilitation packages 🔗

A recurring design flaw compounds this problem. Company and government rehabilitation and resettlement packages are usually built around the assumption that an affected family loses both land and homestead together, and job offers are structured accordingly. But in many industrial and mining projects, large tracts of agricultural land are acquired while people continue to live in their original villages, meaning no one technically loses their homestead. When R&R packages restrict job offers only to families that lost both land and home, they exclude precisely the people who most need an alternative livelihood: those who lost their fields but not their houses, and the landless labourers who never held title to anything in the first place.

Even for those who do receive a job under such packages, the quality of employment on offer is a separate concern. These positions are frequently temporary, low in status, and disconnected from the skills a farming household actually has, such as unskilled contract labour on the very project that displaced them. This leaves oustees dependent on insecure daily wages instead of the steady, self-directed livelihood that land ownership had provided.

Homelessness and the loss of common property resources 🔗

The third strand of economic dispossession concerns housing and shared resources, both of which tribal households historically depended on outside the market economy altogether.

Poor housing outcomes 🔗

Early large infrastructure projects in India, particularly dam-building efforts from the 1970s onward, often made no direct provision for constructing new houses for displaced families. Project authorities allotted homestead plots and expected families to build their own homes from the compensation received, which was frequently too limited to build anything comparable to what was lost. The result, documented across multiple resettlement studies referencing Cernea’s framework, is that many displaced families end up in structurally poor housing that leaves them more exposed to weather, disease, and insecurity than before, a risk explicitly named within the eight-fold impoverishment model set out in Cernea’s background paper on population resettlement.

What is lost when common resources disappear 🔗

For landless and asset-poor tribal families, common property resources, meaning forest and community-held land rather than anything individually owned, are often more important to daily survival than any private plot. The Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006 recognises exactly this dependence, granting community rights over minor forest produce such as tendu leaves, honey, lac, and medicinal herbs, along with grazing grounds and access to water bodies. These are not marginal extras. For many households, the sale of minor forest produce forms a core part of annual income, and grazing commons sustain the livestock that function as a household’s savings account.

When displacement cuts a community off from its forest and grazing commons, whether by physical relocation or by handing the land itself to a project, this income and buffer disappear along with the land. The impoverishment risk framework used across Indian resettlement research treats loss of access to common property as a distinct category of harm precisely because it strips away resources that never showed up in any land record but were nonetheless essential to how tribal households actually got by, a point emphasised in the application of Cernea’s eight impoverishment risks to Indian resettlement cases.

An erosion of knowledge, not just income 🔗

There is a further, less visible cost. Tribal knowledge about which roots are edible, which bark treats fever, and which season to expect a particular fruit is built through generations of direct contact with a specific forest and its particular plants and animals. Displace a community to unfamiliar terrain, or cut it off from the forest it once depended on, and that knowledge has nowhere left to be practised or passed on. Over a generation or two, it fades from lack of use rather than any deliberate loss, taking with it a form of ecological expertise that cannot simply be rebuilt through compensation cheques.

Why these threads reinforce each other 🔗

Landlessness, joblessness, homelessness, and the loss of common resources rarely occur in isolation. A family that loses its land also loses the wage labour tied to that land. A family relocated away from its forest also loses the minor forest produce that cushioned lean months. Each loss narrows the options for coping with the next one, which is why displaced tribal households so often end up worse off years later than the compensation figures on paper would suggest. Addressing this requires rehabilitation policy that looks beyond land titles alone and accounts for the landless, the forest-dependent, and the skills a community actually carries, not just the assets it can prove it owned.

What do you think? If rehabilitation packages were redesigned to cover landless labourers and common-resource users, not just landowners, how differently might displacement outcomes look? And what would it take to preserve a community’s traditional ecological knowledge when the land it grew from is no longer accessible?

References

1. https://dolr.gov.in/en/act-rules/
2. https://prsindia.org/policy/report-summaries/land-acquisition-rehabilitation-and-resettlement-act-2013-implementation-and-effectiveness
3. https://link.springer.com/article/10.1007/s43545-026-01385-w
4. https://www.un.org/esa/sustdev/sdissues/energy/op/hydro_cernea_population_resettlement_backgroundpaper.pdf
5. https://tribal.nic.in/fra.aspx
6. https://journals.sagepub.com/doi/10.1177/0956247815569128