New guidelines likely for sale,lease of govt land

New guidelines likely for sale,lease of govt land

In what could have a far-reaching effect on future sale or lease of government land to private players,the Centre is proposing

In what could have a far-reaching effect on future sale or lease of government land to private players,the Centre is proposing a slew of policy guidelines to bring transparency and prevent land scams by including stringent provisions like selling land only through e-auction,fixing a specific formula for lease value,and limiting lease period to a maximum of 28 years.

The guidelines are set to be taken up at the Cabinet meeting on Thursday. Interestingly,the Defence and Railways ministries — two of the largest land-owning departments — have opposed the guidelines,contending that they already have a transparent process in place. The Defence ministry,which was beset by controversies like Adarsh and Sukna land scams in recent times,has maintained that it does not sell or lease land to private players for commercial use. It has argued that defence land should not be treated at par with land held by other government departments.

The Railways ministry had contended that stringent measures will deter developers.

The guidelines,prepared by a committee of secretaries,propose significant amendments,including setting up of a Public Sector Land Management Committee (PSLMC) under the department of expenditure to oversee government sale and lease. Among the recommendations are:


* All grants of land lease must be made through transparent bidding methodology. Deviation can be made only at the level of secretary of the administrative department,that too only in the case of non-commercial land for public purpose where the lease period will not exceed three years and there will be no provision for renewal or extension of lease.

* Lease value should be calculated at a rate of 14 per cent of “expected minimum market value of land”. This will be in the same ratio to the circle rate of land as notified by state government prevalent at the expiry of 14 years,which the present market value of land has with the present circle rate of land,as notified by the state government.

* Lease rent will have two components — a fixed amount for the entire lease period and a monthly or annual rent that will be variable.

* For lease upto 14 years,the fixed amount will be seven per cent of market value of land per annum for non-commercial purposes. For commercial purposes,it will be 14 per cent of the market value of land per annum to be calculated for entire lease period.

* 50 per cent of the above amount (first component) for the total period of lease will have to be paid upfront before the actual commencement of lease. Remaining 50 per cent shall be paid before the second half of the lease period begins.

* Wherever land value is more than Rs 50 crore for commercial,industrial,residential or institutional use,sale or lease will be done only through e-auction.

* Approval of the Union Cabinet will be required before transfer of title can be done even after buyer has been selected,in case land value is more than Rs 50 crore. If less,then permission of PSLMC will have to be taken.

* No land shall be leased for a period exceeding 28 years except with the recommendation of PSLMC or Cabinet.

It is also proposed that fresh renewals of existing lease cannot be done after these guidelines become operative and all cases will have to follow the guidelines at the expiry of existing lease period.