Tuesday, October 27, 2015

Land ceiling bill meant to "help" industrialists set up shop, easily sell land: Internal Gujarat govt note

By Rajiv Shah
An internal Gujarat government note, prepared by the state revenue department and in possession of Counterview, has admitted that the recent amendments to the state’s land various ceiling Acts are meant to “enable the industrialist to speedily establish industry”, in such a way that the industrialist could “purchase” the land for industrial purpose “without prior permission of the district collector.”
In order to do this, it said, it has amended Section 63 AA of Mumbai Tenancy Administration and Agriculture Land Act, 1948; Section 55 of Saurashtra Gharkhed, Tenancy Administration and Agriculture Land Act, 1949; and Section 89-A of Mumbai Tenancy Administration and Agriculture Land (Vidarbh Pradesh and Kutch region), 1958.
The amendments await President Pranab Kumar Mukherjee’s nod before they could become legal entities. The Gujarat governor refused to sign the amendments, and instead sent them to the Government of India for approval, as they invited wide-scale criticism of favouring industry at the cost of farmers.
The internal note says, “According to the prevailing provisions, a certificate is given by the collector to the purchaser of the agriculture land for industrial purpose”, and “the industrial activity has to be started within three years and production of goods /providing services has to be done within five years.”
Pointing towards the current hassle, the note says, “The government, after having considered the price paid for the purchase of the land, would pay compensation and enter the land of such industry in the government account and can dispose the land” if there is a “failure in starting the industrial activity within three years and production of the goods/providing services within five years.”
Giving reasons why “legal amendments” had become necessary, the note says, currently, “bona fide industrialists are facing difficulties/hardships due to the less time period limitation to start the industry.” And, “due to the changing circumstances and not starting the industry timely, the industrialist cannot sell such purchased private lands and, thus, despite of the circumstances beyond control, they cannot sell the land and end up with economic crises.”
Secondly, according to the note, “There is also no clear provision for the industrial park”, nor is there any “clear provision that the after having purchased the land for the industrial park, the land is developed and can be sold to other industrial units. Thus, it was found, is a necessity to make provision in the law for industrial park.”
In order to avoid these difficulties, the note says, “If the purchaser of the land wishes, he can give an equity/part in the proportion of the cost of the land to the farmer selling the land. This is just an enabling provision, vide which an opportunity of mutual partnership is created between the industrialist and the farmer and this would create ‘win-win’ situation for both which would provide the motivational force in the industrial development of the state.”
Then, the note states, a new provision of starting industrial activity under which the “time limit of starting production or providing services be totally five years, and on the basis of the application of the industrialist, such time period can be further extended for the period for two years (one year at a time) without charging any amount.”
But if, during this period, which totals “seven years, including the extension period”, the industry is not started, “a provision is made to extend such time limit for the period of three years by charging 50 per cent of the amount of jantri.” Jantri is the government assessment of the value of land, revised periodically, and is generally very low compared to the market rate.
Further, says the note, “If the industrialist cannot start the production/provide services for whatever reasons, he can sell such self-purchased land for industrial purpose. Interestingly, this can be done “after three years”, on payment of an amount to the state government – 40 per cent of the jantri between three to five years, 60 per cent of the jantri between five and seven years, and 100 per cent of the jantri for more than seven years.
Coming to the need for industrial parks, which are being developed in Gujarat “in order to make the industrial development of the state”, the note says, the existing laws do not allow the promoter to “sell the plots of such industrial park to another industrialist”, hence the government's “goal of development of such industrial parks, is not fulfilled.”
Under the new provisions, the note says, “The lands purchased for the purpose of industrial park could be sold to other industrial units.” Of course, the developer has to create “infrastructure facilities subject to the terms and conditions decided by the Industrial Commissioner” within three years after the purchase of the land, but if he “fails to fulfill the conditions, “the government could take over the land after paying the compensation as decided by the government.”

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