Industrial areas in Punjab to now have malls, multiplexes, hotels

The state government on Thursday decided to allow conversion of plots from leasehold to freehold, besides change in land use of industrial plots for setting up hospitals, hotels, banquet halls, commercial spaces, institutes and even rental housing.

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The decision was taken at a meeting of the Council of Ministers chaired by Chief Minister Bhagwant Mann. Industrial plots measuring between 1,000 sq yd and 4,000 sq yd can be put to use under 10 different categories. The policy would also be applicable for industrial parks spread over 40,000 sq yd, provided the park has a 100-foot-wide road abutting it and the developer would have to pay 12.5 per cent conversion charges. Multiplexes, shopping malls and retail shops could also be set up in industrial parks.

The change in land use (CLU) charges for individual plots would range between 10 and 50 per cent, and the width of the approach road would be 45-60 feet.

The decision seems to have been taken to strengthen the state’s sagging economy, and considering the fact that services sector contributes the largest share to Punjab’s Gross State Value Added (GSVA) at 48 per cent, and is growing rapidly.

Comparatively, industry contribution to the GSVA is around 28 per cent. The services sector also gives employment to 41 per cent of the workforce. “Though there was a conversion policy earlier as well, it was restrictive and did not serve much purpose. Industry had been demanding this for a long time,” said RS Sachdeva, former Chairperson of the PHD Chamber.

“The other significant decision taken by the Cabinet allows conversion of leasehold plots of the Punjab State Industries and Export Corporation into freehold plots, by plugging the loopholes in the previous freehold policy, first brought in 2005. A standard conversion fee will be charged at 20 per cent of the current reserve price or collector rate, whichever is higher,” said New and Renewable Energy minister Aman Arora. “The government expects to earn Rs 1,000-crore revenue with the roll out of this policy,” he added.

It is learnt that there will be a 50 per cent remission in conversion fee to be paid by original allottees of industrial plots, if their land title documents had a clause of unearned increase.

Those going in for this conversion will deposit 90 per cent of the charges in the state treasury and the PSIEC will get 10 per cent of those charges. This remission will be 75 per cent for allottees that do not have the clause to pay unearned increase. Till date, the fee charged for this conversion was just Rs 20 per sq yd, which amounted to just 0.05 per cent of current reserve price of plots.

Other key decisions

Amendments to the MSE Facilitation Council Rules to create a mechanism for recovery of awards such as arrears of land revenue under the Punjab Land Revenue Act

Approval of Amendments to the Punjab Water Resources Department Junior Engineers (Group-B) Service Rules

Approval to Merge Various Directorates under the Department of Finance

Approval to the creation of nine new posts for the state SNA Treasury