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Andhra Pradesh: Today, birth of Amaravati, and a land model

Andhra Pradesh government provided incentives to the original owners of land by exempting them from capital gains tax and stamp duty on the first sale.

Written by Anil Sasi , P Vaidyanathan Iyer | Abuja/ New Delhi,, New Delhi |
Updated: October 22, 2015 11:18:41 am
Andhra capital, amaravati, chandrababu naidu, andhra news The capital has been planned on sustainable development principles, with extensive, open green spaces, to add value to the urban ecosystem.

The more-or-less smooth acquisition of 32,000 acres of land from farmers by the N Chandrababu Naidu government to build Amaravati, the new capital of Andhra Pradesh which will be inaugurated Thursday, has prompted the Centre to consider the state’s land-pooling mechanism as a model that can be adopted by other states and Central government agencies.

“Union Finance Minister Arun Jaitley and Urban Development Minister M Venakaiah Naidu have shown a lot of interest in the process followed by the state for acquiring land. They have been seeking regular updates on the process,” said Y S Chowdary, Minister of State (Science & Technology), who was initially the chairman of a capital committee set up by Naidu.


Even as Union Cabinet ministers are studying Andhra’s land-pooling model, certain Central government infrastructure ministries are already exploring the feasibility of deploying it for projects such as power transmission, where large tracts of contiguous land are required. “Since private developers are struggling for land and there are obstacles posed by the UPA-legislated land acquisition statute, alternatives such as the Andhra model should be considered,” said a power ministry official present in a meeting called to address concerns of power generation and transmission developers.

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Chowdary said his state’s land pooling method created a “win-win situation” for both farmers and project developers. He, however, admitted that the Andhra government stretched itself by handing over 25 per cent of developed land to original owners. The state had acquired 31,000 acres from about 18,000 farmers by committing an annuity of Rs 50,000 per acre for 10 years and simultaneously giving back 1,250 sq yards of residential plot and 200 sq yard of commercial plot in the new city for every acre.

According to Chowdary, the state need not have acquired so much land, but was left with little choice because it agreed to partake with the farmers a larger portion of developed land. Besides the 32,000 acres land acquired from farmers, the state itself has 22,000 acres. Sources in the state government said that except for a village where the YSR Congress was strong, farmers have willingly given the land. “About 3,000 acres is still to be acquired,” a source said.

The Andhra Pradesh government further provided incentives to the original owners of land by exempting them from capital gains tax and stamp duty on the first sale. “Since this was agricultural land and gains would not have been taxed on sale, the state decided to exempt it from capital gains tax after change in land use. Also, stamp duty has been waived to make it worthwhile for the farmers,” Chowdary said.

The land holdings of farmers vary from 40-50 acres to less than an acre. “While 50 per cent of the entire land acquired will be utilised for development of trunk infrastructure and social infrastructure, 25 per cent will be given back to original land owners and the balance 25 per cent will remain with the government for other uses,” said Chowdary.

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