Kerala loses Rs. 20 crore a year in lease rent

February 19, 2010 08:54 pm | Updated 08:54 pm IST - THIRUVANANTHAPURAM

Kerala will be losing Rs. 20 crore of revenue envisaged in the Budget for the current year owing to failure of the government to revise the rents on revenue and forest leases.

Various plantations and others holding lands leased from government had been paying only nominal rents for years thought the Assembly had passed a Bill to revise the rents as back as in 1980. The rents ranged from Rs. 1.50 an acre to Rs. 5 an acre for most of the land leased by erstwhile Travancore and Cochin governments, and up to Rs. 250 in cases where the leases had been renewed.

The Finance Minister Thomas Isaac had proposed a simple formula for determining the revised rents: Rs. 1300 for leases exceeding 100 acres, Rs. 1000 for leases of 25 to 100 acres and Rs. 750 for leases below 25 acres. However, this was not implemented. Instead, the Forest Department issued a notification in November last year, amending the rules notified under Kerala Grants and Leases (Modification of Rights)

Act. (The Forest Department had initially shelved its plans to issue the notification on the ground that the Finance Department would issue necessary notifications.)

The notification proposed a complex formula for fixing the rent.

Accordingly, the revised rent shall be the highest among either seventy per cent of the profit from crops or three per cent of the value of land. The revised rent assessed on the basis of land value, however, is not to exceed the rate applicable to forest lands leased to public sector undertakings from time to time.

The collectors were to do the assessment which involved assessment of income and expenditure of plantation companies and other entities.

None of the collectors have undertaken the exercise yet though they were told to do so at a conference of collectors here recently. The assessees can go on appeal against the decision of the collector. And as it stands now, there is little chance of revenue accruing from the revision of the rents this year.

According to the Budget speech, 1.33 lakh acres of revenue land and 20933 hectares of forest land are on lease to various private parties.

Apparently, leases to some of the major plantations are not being treated as forest leases. However, the Act and Rules covers all the leases from erstwhile States of Travancore and Cochin.

According to an official release issued by the Forest Department at the time of issue of the notification, three per cent of the value of land owned by Harrisons Malayalam Plantation in Thenmala Village of Pathanapuram taluk (Kollam district) would come to Rs. 76800 a hectare. However, the lease rent payable would be only Rs. 1300 a hectare, being the present rate fixed for forest lands leased to public sector undertakings. However, the company said in a public announcement a few days ago that it did not have any leased land outside Thrissur district.

Similar is the case with Kannan Devan Hills Plantation Company, which is another large land holder in the State. The Government and Assembly committees maintain that the Company holds land in excess of that awarded by the Land Board under the Kannan Devan Hills (Resumption of Lands) Act. The Act, which was enacted for taking over the Kannan Devan Hills, had excluded the planted areas which were on lease to the Company’s predecessor. The District administration is not sure whether the Company’s land would come under the Grants and Leases Act and has not initiated any steps to revise the same. Collector Asok Kumar Singh said that the Company was paying rent at Rs. 200 a hectare. It was not paying plantation tax for years on account of default in assessment.

Lease rents had remained low for decades in the State, as the Act remained unimplemented. The Rules for implementation of Act was brought in 1990, only to be stayed by the Secretary (Forests) within months. An amendment to the Act passed by the House in 1999 did not get the President’s assent. In 2006, the State was told that there was no need of the amendment as the purpose could be achieved by amending the Rules. The proposed amendment took another three years to be notified.

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