Desperate to mobilize resources to tide over the financial crisis aggravated by the second wave of Covid-19 pandemic, the Telangana government is set to begin sale of government lands to raise Rs 20,000 crore while the move has drawn the ire of opposition parties.
After failing to raise resources through sale of lands for last two years, the Telangana Rashtra Samithi (TRS) government has finally initiated the process for e-auction of identified lands to realize its ambitious Budget for 2021-22.
The state’s non-tax revenue for 2021-22 was estimated at Rs 30,557.35 crore, including Rs 20,000 crore from sale of land.
It had set a target of mobilizing Rs 10,000 crore in 2019-20 and Rs 14,515 crore in 2020-21 but the government could not even begin the process for sale of land due to the slowdown of the economy amid Covid-19.
Though the country’s economic recovery has received a setback due to the second wave of the pandemic and prospects of getting good price for lands do not look bright due to continuing slowdown in the real estate sector, this time the state government is desperate to raise resources.
The pandemic has hit hard the state’s finances. It suffered a revenue loss of about Rs 50,000 crore during the first wave of Covid-19 lockdown and another Rs 3,000 to Rs 4,000 crore in the second wave.
Facing a severe fund crunch, the state is looking to raise additional resources to meet its financial commitments, especially for Rythu Bandhu, the investment support scheme for farmers. Under this scheme, the government will be crediting Rs 7,509 crore to bank accounts of farmers between June 15 and 25.
The government is also facing an additional financial burden of Rs 1,000 crore due to revision of salaries of government employees and for payment of arrears to them.
The government also requires more funds to improve health infrastructure. It already announced plans to spend Rs 10,000 crore over next two years to improve infrastructure facilities in government hospitals.
Taking swift actions, the State Cabinet constituted a Sub-Committee headed by Finance Minister T. Harish Rao on resource mobilization and also set in motion the process for sale of government lands.
Harish Rao asked all the departments to prepare a list of properties, land parcels and other properties belonging to the government.
The minister justified the government’s decision, saying that lands were being sold for the state’s development and to implement various welfare schemes.
Dismissing opposition Congress party’s criticism, he alleged that the Congress had sold nearly 88,000 acres of Telangana land in erstwhile Andhra Pradesh, to spend on the development of the Andhra region.
“Only those lands which do not serve any public purpose will be identified for auction. Land parcels which are in prime locations and likely to fetch good prices will be priority,” said a senior revenue official who did not want to be identified.
“In addition to the prime land parcels in Hyderabad and surroundings, plots in other towns of the state will also be identified for auction This will be done in phases. The process is likely to continue for several weeks,” he said.
A Government Order (GO) was issued on June 10 prescribing Standard Operating procedure (SOP) for nodal agencies for sale of government land parcels under control of various departments which are not required for any public purpose located in various prime areas scattered throughout the state by open public auction.
According to the GO, since land parcels in prime locations scattered across the state are prone to encroachments, the government permitted for disposal of government land parcels which are not required for any public purpose by open public auction.
The government formed different committees to execute the process in a transparent manner, follow all norms and to ensure that it get good price for the land.
Nodal department will be delegated powers to approve the special terms and conditions and tentative schedule for conduct of e-auction and for fixing of upset price duly considering the prevailing market rates with due diligence.
The government also granted permission to engage MSTC, a Government of India agency as service provider to conduct e-auction on online platform. The GO provides for constitution of a committee at nodal department under the concerned Principal Secretary to Government to finalise bids and approve.
The government has already identified prime land parcels in Hyderabad and surrounding districts of Rangareddy, Medchal-Malkajgiri, Sangareddy and Yadadri Bhuvanagiri for e-auction. This is likely to be done in three phases and the government hopes to raise Rs 10,000 crore.
The auction will begin with the prime lands in Hyderabad. This is expected to fetch the best price in the country.
Hyderabad Metropolitan Development Authority (HMDA) and Telangana State Industrial Infrastructure Corporation (TSIIC) have fixed Rs 25 crore per acre as the minimum price to be quoted for the first phase of land auctions in Kokapet and Khanamet. A total of 65 acres of land in 13 land parcels will be auctioned on July 15. While the upset price has been fixed at Rs 1,625 crore, the government hopes to net about Rs 3,000 crore.
The opposition parties have slammed TRS for its move. The Congress party has demanded that the government withdraw the GO on land sale. It dared the TRS for a debate on revenue earning and debts of the state.
It reminded that TRS had opposed land auction by the previous governments in combined Andhra Pradesh.
Congress Legislature Party (CLP) leader Mallu Bhatti Vikramarka said his party would fight against the auction of government lands. He said the party would petition the governor on the issue and would also educate people how the decision could increase burden on each citizen.
“The State government is already in neck deep in terms of barrowings. With this move, KCR is forcing everyone to pay the price for his misgovernance,” he said.
The Congress leader vowed to stop the government from auctioning lands and warned that the state could have a burden of credit to the tune of Rs 5 lakh crore in the next two years.
Congress party’s national spokesperson Dr Dasoju Sravan Kumar also slammed TRS for its double standards on the issue. He recalled that TRS leaders had staged a sit-in in front of HMDA office in 20212 demanding then government headed by Kiran Kumar Reddy not to sell lands.
BJP also strongly opposed sale of lands. Its leader N.V.S.S. Prabhakar wanted to know how government found the land for sale when it claims that there is no land available for construction of double bedroom houses and implementing three-acre land to Dalits programme.
“The Telangana movement itself was to save precious lands of Telangana from encroachment or sale by rulers but unfortunately lands of Telangana are being sold once again,” he said.
