No deed signed for hydel project, state govt reduces land lease rate

Pratibha Chauhan

Shimla, February 10

The state government has amended land lease rules by reducing the rate for land to be given on lease from Rs 50 per sq mt to Rs 5 per sq mt, as in the past one year, no deed was signed for hydroelectric power or cement plant projects.

Interestingly, the Congress government had enhanced the land lease rate from Re 1 to Rs 50 per sq mt on assuming power over a year ago. The Cabinet yesterday gave nod to reducing the land lease rate as in the past one year, nobody came forward to take land, forcing the government to review its decision. The rate was reduced on the basis of the feedback from the Revenue Department.

Had raised charges last year

• The Congress-led government had enhanced the land lease rate from Rs 1 to Rs 50 per sq mt over a year ago in the hope of generating revenue but the decision proved to be counter-productive
• The Cabinet on Friday gave nod to reducing the land lease rate as in the past one year, nobody came forward to take land for hydroelectric power or cement plant projects

Though land for industrial or tourism projects is given at the circle rate, for a power project, cement plant, expansion of the railway line or some other projects like AIIMS, the state government gives land on lease at subsidised rates. The Congress government had enhanced the land lease rate from Re 1 to Rs 50 per sq mt in the hope of generating revenue but the decision proved to be counter-productive.

However, in a major shift from the earlier practice, the developer of any project will have to pay lease amount for land even if he has paid the net present value (NPV) for the transfer of forestland to it. “As per the changed lease rules, the government will now make it mandatory for the developers to pay the lease amount to it even if they had paid the NPV to the Union Ministry of Forest and Environment, which gives approval for the diversion of forestland for a project,” said Onkar Sharma, Additional Chief Secretary (Revenue). He added that this had been done to generate additional revenue for the government.

In case of tourism or industrial use, land is given at the circle rate but the lease value is charged at 10 per cent of the circle rate. The government has decided not to change this provision. Earlier, land was given on lease for 99 years but the Congress government had last year reduced this period to 40 years. Successive governments have given huge chunks of land for setting up hydroelectric power projects, cement plants or other similar development works.