99-year lease of lands to industries welcomed

The government’s decision to allot land to industries on lease for 99 years is being welcomed on the ground that it will bring down the capital costs substantially.

It is considered a timely policy intervention that helps prospective entrepreneurs in setting up their units in Sunrise State without being worried about the exorbitant land costs.

Hitherto, the government used to sell land to industries through Andhra Pradesh Industrial Infrastructure Corporation (APIIC) but it has recently adopted 99-year lease as the preferred model of allotment to discourage real estate business.

The lease proposal was incorporated in the Industrial Development Policy 2015-2020 that was released by the Department of Industries and Commerce through G.O Ms No. 36 on April 29. The government has initially planned to fix the lease period at 33 years but has made it 99 to ensure a stable land use policy.

The Confederation of Indian Industry (CII) Vijayawada Zone has late last year recommended to the government to give land on lease and suggested that a delay tax of 10 per cent of the land cost should be imposed every year till the commencement of commercial production.

The new policy envisaged outright sale of land to industries coming up with investments exceeding Rs 100 crore and for projects whose gestation periods are more than five years.

Good initiative

There are some other exceptions to giving out the lands for lease.

Welcoming the government’s decision, CII Vijayawada Zone Vice-Chairman G. Venkateswara Rao toldThe Hindu that it was a good initiative and hoped that the change of governments over a 99-year period would not create uncertainties in the land allotment policy.

There should be no scope for different interpretations of the same policy, he said.

Andhra Chamber of Commerce and Industry Federation secretary Ch. R.K. Prasad said it was an excellent opportunity for companies with small budgets to take lands on lease.

The government will get lease rentals and the ownership of land will be with it at the end of lease period. Besides, companies will be most probably permitted to transfer the lands to other firms in the event of sale of their businesses.

SOURCE: The Hindu