Yes, even as Karnataka is positioning itself to take off from the launchpad and be an industrial leader in the country, it has been drawing flak over land prices from the industry almost consistently. Especially from small and medium enterprises.
Instances in the recent past, such as land being returned in the Dabaspet industrial area citing high prices –– Rs 59 lakh per acre, while the market prices as claimed by the industry is around Rs 35 lakh –– is one such example.
In yet another development, the State’s nodal agency, Karnataka Industrial Areas Development Board (KIADB), is under criticism for charging a high price for land in Malur IV phase industrial area, in Kolar district.
Price revision
In a letter dated March 10, 2010 that KIADB sent to close to 400 land applicants, the Board wrote it has revised its tentative price to Rs 69 lakh per acre, which at the time of applying for land (2007), was Rs 7 lakh. This, industry sources believes, is very high and that its is discouraging for small entrepreneurs and firms. Echoing the same, Sunil Maloo from Atco Engineering Corporation, one of the applicants told Deccan Herald, “How can the price be raised 10 times? We are not big enterprises that can afford land at such prices. If I pay Rs 69 lakh just for the land then my entire budget needs to be rejigged. The project is just not viable.”
KIADB justification
Downplaying the issue, senior officials at KIADB opine that there is nothing super-normal about the prices quoted by the Board, adding that KIADB cannot quote lavish prices to suit itself and that there is a system by which it is decided.
“What the they need to understand is the cost that KIADB bears. Besides acquiring the land and paying the land owners, the board also takes up development work, including providing the required infrastructure,” the official said.
Throwing more light on the same, the official said that around Rs 500 crore has been spent only on paying compensation to farmers at Rs 22-23 lakh per acre and similarly around Rs 22 lakh per acre would be the development charges and then around 20 to 22 per cent of the land price and development charge will be the Board’s service charge –– totalling to about Rs 69 lakh per acre.
The Official, further said “the first few acres (200-300 acres) of acquisition was done 15-20 years ago and the land remained vacant until 2005. The compensation paid to the farmers then was around Rs 1.5-2 lakh and other cost incurred by the Board was also on the lower side enabling us to allot land at Rs 7 lakh.” However, he said, in 2007-08 land prices in Malur were hiked to Rs 25 lakh as farmers began to demand more for the freshly acquired land and now it is at Rs 69 lakh.
“So, we can allot land at the old price anymore,” the official said, adding “we are open to consultation, applicants can come to our office and clarify things...”
