This Economist article deals with the challenges faced in land acquisition and calculation of appropriate compensation to those affected.
"India’s current land-acquisition law is simultaneously too strict to pave the way for desirable projects and too lax to protect property owners. Forced land purchase requires the consent of at least 70% of affected landholders and must also pass a social-impact test. Compensation must be twice the market value for urban plots and four times for rural land...
....Yet compensation in India is based on recent land sales, which are likely to be far lower than the true value of a property due to India’s distorted market. The direct sale of farmland to industry is banned in several states and tricky in many others; instead, land is often sold by a farmer in distress to another farmer. Prices are under-recorded to escape high stamp duty".
Click here to read the article.