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New land lease policy on anvil, Real Estate News, ET RealEstate

New land lease policy on anvil, Real Estate News, ET RealEstate
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THIRUVANANTHAPURAM: To rationalize the criteria laid forward by various industrial promotion agencies and offer a level-playing field for entrepreneurs, industries department is ready with a unified land allotment policy, while allotting land for various entrepreneurs who approach it.

The new land lease policy, while allotting government land for industrial purposes, will liberalize the conditions for entrepreneurs, allowing them to change ownership of the enterprise, change the business and it will also entail an exit policy for the entrepreneur.

“The policy is being framed to make it easier for investors who are seeking land from the government. The draft policy, under the active consideration of government, is expected to get a final clearance in a month,” said principal secretary (industries) K Ellangovan.

The policy will be applicable to various agencies that are entrusted with industrial development- by acquiring, holding and allotting lands for setting up industrial enterprises in state – but are following different sets of rules and regulations. These include district industries centres under the directorate of industries and commerce, small industries development corporation, Kerala state industrial development corporation (KSIDC) and Kerala industrial infrastructure development corporation.

Since different agencies under the department are following different land disposal regulations, an entrepreneur coming to set up an enterprise is in a dilemma as to which agency he should approach for allotment of land, as terms are different for each agency.

“The traditional concept of landlord-tenant relations and imposing unnecessary conditions on the entrepreneur will create a negative impact on the development of industries. Industrial policy is expected to give more leverage to make Kerala industrial-friendly and invite entrepreneurs to invest here to generate more employment by giving more incentives and concessions, including allotment of land with least delay,” said KSIDC MD and chairman of the policy drafting committee M G Rajamanickam.

As per the new policy, change of manufacturing product, within the same product category for which land was originally intended, will be allowed without specific permission from the government. As per existing policies, if a change of product is envisaged, entrepreneur will have to surrender land to government and await a fresh allotment, which will heavily impact time and cost.

Also, the allotted property can be mortgaged, for which a tripartite agreement will have to be entered between the financing agency, the government and the allottee.

But, there will be reasonable restrictions like prohibition of excavation or mining in allotted land to remove stone, earth or other materials. There are provisions in the new policy under which government can resume the plots.

Kerala has been undertaking several measures to improve its position in the ease of doing business (EoDB) rankings. Last time, when the ranks were published in 2019, it stood at 28th spot. A higher rank in EODB rankings is a key factor in attracting more investors to state.

After its pathetic performance, Kerala had launched a series of reforms monitored by the department for promotion of industry and internal trade. As on March 1, 15 states (including Kerala), have completed the district business reform action plan as part of EODB.


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