Rehabilitation Problem (6)

Housing compensation: It is necessary to highlight a major flaw in the procedure for
fixed immovable property like houses, well, barns fence, cattle-stalls, etc. The present procedure evaluates the “current worth” or “value after depreciation” for determining the amount of compensation. This concept is faulty. He should be paid an amount for his house etc., equivalent to the cost of reconstructing a dwelling place equal to the plinth area lost under submergence. This amount (i.e., replacement cost) will obviously be more than the “current worth” of his old dwelling.