Kerala will lose Rs.20 crore of revenue envisaged in the Budget for the current year owing to the failure of the government to revise the rents on revenue and forest leases.
Various plantations and others holding lands leased from the government paid only nominal rent for years though the Assembly had passed a Bill to revise the rent as way back as 1980. The rents ranged from Rs.1.50 an acre to Rs.5 an acre for most of the land leased out by the erstwhile Travancore and Cochin governments, and up to Rs.250 in cases where the leases had been renewed.
Finance Minister T.M. Thomas Isaac had proposed a formula to determine the revised rent: Rs.1,300 for lease exceeding 100 acre; Rs.1,000 for lease of 25 to 100 acres; and Rs.750 for lease below 25 acres.
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However, this was not implemented. Instead, the Forest Department issued a notification in November last amending the rules notified under the Kerala Grants and Leases (Modification of Rights) Act. (The Department had initially shelved its plans to issue the notification on the ground that the Finance Department would issue necessary notification. The Forest Department’s notification will not cover all the revenue leases.)
Complex formula
The notification proposed a complex formula for fixing the rent. Accordingly, the revised rent would be the higher among either 70 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, would not exceed the rate applicable to forest lands leased to public-sector undertakings from time to time.
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The Collectors were to do the assessment of the income and expenditure of plantation companies and other entities. None of the Collectors has undertaken the exercise yet though they were told to do so at a conference of Collectors here recently. The assessees can go in appeal against the decision of the Collector. And as it stands now, there is little chance of revenue accruing from the revision of rent this year.
According to the Budget speech, 1.33 lakh acres of revenue land and 20,933 hectares of forest land are leased out to various private parties. Apparently, leases to some of the major plantations are not being treated as forest leases. However, the Act and Rules cover all the leases of the 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.76,800 a hectare. However, the lease rent payable would be only Rs.1,300 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 Kanan Devan Hills Plantations Company, which is another large landholder 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.
Planted areas excluded
The Act, which was enacted to take over the Kanan 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 the company was paying rent of 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 the Act were 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.