Industrial parks may get to commercialise 34% land

NEW DELHI: The government is planning to liberalise land use norms for industrial parks. Developers may now be allowed to use 34% of the land — so far allotted for non-commercial purposes including housing — for commercial purposes and enjoy a 10-year tax break on it. According to the department of industrial policy and promotion (DIPP) proposal, 66% of the land will continue to be earmarked for industrial units. A massive private investment of over Rs 18,000 crore has been approved for over 14 states.

The government also proposes to relax the condition that a developer will have to provide for at least 30 industrial units within the park. “It is now proposed that this be reduced to something between seven and ten,”a source said.
The rules are being relaxed as it is felt that there are too many restrictions on land use for industrial parks vis-a-vis special economic zones.

“In the case of SEZs land needs to be acquired by the developer and after seeking the government’s approval the developer can apply for a change in land use (CLU) certificate,” according to the source. However, industrial parks can be set up only in notified areas as against SEZs. Thus, DIPP has thought of providing this additional incentive. As of now the matter awaits the final approval of the finance ministry.

So far, the government has approved as many as 210 cases under the scheme. Out of the proposed investment of the total proposed investment Rs 5,763 crore go to Kerala, which is the highest so far. The investment will set up 56 industrial parks in the state. Other investments include Rs 3,893 crore in the state of Karnataka to set up 37 industrial parks, followed by Andhra Pradesh with an estimated invest of Rs 2,455 crore for setting up 18 such parks.

In case a developer transfers operation and maintenance of the industrial park to another undertaking, the tax benefits will be extended to the transferee for the remaining period out of the ten years. The scheme shall be applicable for any undertaking that develops and operates or maintains and operates the industrial park from the date of its notification.

It now remains to be seen whether more states will come forward and participate in the scheme. Despite the scheme being afloat since 1999 only 200 odd proposals have been made. While another 40 or so await approval, the scheme still hasn’t seen the kind of response SEZs have got, which is over 300 in almost a year’s time.