Industrialists have kept their fingers crossed over the method the government would adopt for allotting land to the existing and new ventures. Confusion still prevails on whether the land will be sold outright or given on lease for a specified period.
Under the existing system, land available with the Andhra Pradesh Industrial Infrastructure Corporation (APIIC) is put for sale. The government, however, is examining recommendations made by the stakeholders including the Confederation of Indian Industry (CII) that land should be leased out. A decision over the issue is expected in a few days.
The CII is not in favour of transferring of ownership of land as it would give scope for price escalation at a time when land has become costly in the wake of the announcement of Capital region.
The industry body has recommended that entrepreneurs have to be made to pay a ‘delay tax’ of 10 per cent of the land cost after certain period till the commencement of production to discourage the non-serious players and the tax could be adjusted against the sales tax payable by them.
With ‘land pooling’ for Capital gaining pace, industrialists are seeking clarity on mode of land allotment for new projects and expansion of the existing units in Capital region.
Speaking to The Hindu , CII ,Vijayawada Zone, Chairman V.V.M. Krishna said leasing was a good idea as buying land entailed a huge expenditure which only a few entrepreneurs could afford to. Moreover, the rate of return on investments on land had a long gestation period.
“The government should give land on lease on a case-to-case basis. The lease rents have to affordable and the lease period should vary depending on the type of industry. It should not be a once-size-fits-all kind of formula,” he says.
Cost minimisation
He further said that industries could minimize their land costs which account for a substantial portion of their capital.
