Karnataka government plans new asset monetisation policy

BENGALURU: The cash-hungry Karnataka state government has set its sights on conquered plots of land to replenish its cash reserves. So far, the government has cleared invasions and reclaimed land on 2.7 acres. Evacuation is underway for another 1.3 acres of land. Since there is legislative pressure to give more impetus to the process, the government is working on a policy to absorb non-tax revenue through the monetization of assets. The guidelines for implementing the new asset liquidation plan are being discussed. “A policy is expected to be announced soon,” said Navin Raj Singh, Regional Commissioner (Bengaluru Division) and director of the Karnataka Public Land Company Limited (KPLC). In the Bengaluru metropolitan area alone, there are 16,149 acres of land available for income. A. At the current rate of Rs 30 crores per acre, the land value in Bengaluru is only Rs 4.8 crores, nearly double the budget expenditures of Rs 2.4 crores, announced for FY 2021-22. If taken seriously, monetization of assets can generate revenues twice the size of the state budget. Ramaswamy said the government does not need a lot of debt if it is focused on selling reclaimed land. Land grabbing, especially in the Bengaluru metropolitan area, has been the subject of serious discussion at the current budget session and the government has come under serious attack for its failure to drive out squatters. Even Finance Minister R Ashoka admitted to the assembly that "his hands are tied to crack down on the state's land appropriators." The government's offer to sell available plots of land has been painfully slow. Only 7 acres of land in and around Bengaluru could be sold through phase one auction in 2020. About 104 acres are road-ready soon. The response has so far been tepid for various reasons. The slowdown caused by Covid has had a major impact. "We expect demand to rise in the new fiscal year," said Manjunath, deputy commissioner for the Bengaluru metropolitan area. As a first step, he said, the district administration would fence off the plots. It will be ready for auction, after meeting the land quota for housing agencies such as Rajiv Gandhi Housing Corporation, BBMP to build solid waste management plants. Real estate and industry representatives said the asset monetization plan will only succeed when the cost of the land is reduced by reducing the targeting value. “From an industry perspective, the price of the land offered at auction should be the same as the price of the cheaper KIADB land,” said TR Parasuraman, Chairman of the Bengaluru Chambers of Commerce and Industry. He said industries prefer an undivided plot of land ranging from 20 acres to 50 acres, but the reclaimed lands are usually auctioned in the form of "small plots", which leads to little demand.

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