Madhya Pradesh land prices to go up from July-11

Come July and land prices will go up for industrial use in Madhya Pradesh. Almost all Audyogik Kendra Vikas Nigams (AKVNs) subsidiaries of State Industrial Development Corporation (SIDC) have obtained government nod for raising prices.

“Bhopal and Gwalior AKVNs will raise land rates from July 1 in Manideep (Bhopal), Govindpura, Satlapur, Pilukhedi, Banmore (Gwalior), Nandantola, Chainpura and Jaderua (Morena) and Pratapura industrial areas. The rates will be different at different industrial areas, however prices are likely to go up from 10-50 per cent from the existing land rates,” a government source informed Business Standard.

Lands in industrial areas in the state are available at throw-away prices vis-à-vis land in commercial areas in adjoining towns.

According to a senior official in department of industries, the state government has not reviewed land rates for years as a result of which, middlemen make money from transfer deal of lands in industrial areas.

Industrial areas like Pithampur, Dewas and Mandideep areas are out of space and investors are either pulling out of their projects ore shifting base to other states like Himachal Pradesh for expansion.

"We will be able to have at least some funds for AKVNs and investors will have more options," said the official.

If sources are to be believed, land prices are likely to go up by 100 per cent or more in some industrial areas.

At present, land is available at as low as Rs 8 per sq feet in industrial areas like Govindpura and Rs 35 per sq feet in Mandideep and Satlapur as against Rs 400-1000 per sq feet in nearby towns.

Since land acquisition Act 2008 does not bar the land holder to transfer land and reclaim better prices, AKVNs have no teeth to demand the land back from the holder. At a nominal transfer fee, any land holder in industrial area can transfer his land at commercial rates. This way middlemen and real-estate players make money.

The government has yet not made it clear what will happen to those investors who want to set up micro, small and medium scale industries (MSMEs). “Certain provisions will be made in this regard. MSMEs will get land at cheaper prices,” PK Dash, principal secretary of department of industries had told Business Standard earlier.

Reportedly MSMEs have no space in prime industrial areas like Dewas, Pithampur and Mandideep. Similarly new large and medium scale industries and existing industries could not execute their expansion plans for years.