VIJAYAWADA: The move of the State government to take five per cent of the land from the newly-developed layouts or collect equivalent money is bound to increase the cost of new ventures, ultimately burdening the consumers.
Realtors say they have no other option but to transfer the additional cost to customers as the market in the state is dull compared to other states.
The Covid pandemic and abnormal increase in cost of raw material have already pushed the developers and builders to the wall and now with the additional expenditure, they were not in a position to do business without transferring the burden to end users.
As per the GO MS No 145 issued by Municipal Administration and Urban Development department on December 6, 2021, five per cent of layout area should be handed over to the district collector concerned by the layout owners or developers of private layouts.
In case they are not able to hand over the five per cent of additional land within the current layout, they have to hand over the five per cent land within three km.
A third-option is for them to pay the basic value of the five per cent of layout area to development authority, and in case the area is not covered in development authority, to the concerned urban local body.
The GO clearly states that the five per cent additional land reserved shall be utilised for YSR Jagananna Housing Projects for the poor. Municipal Administration Minister Botcha Satyanarayan claimed that it was not a new decision but an old one, which is being implemented now. “They can exercise any of the three options,” he had said.
Speaking to TNIE, K Ramesh Ankineedu, realtor and general secretary of CREDAI, Vijayawada, said when calculated, the additional burden comes to around Rs 15,000 per acre that is anywhere between Rs 600 to Rs 1,000 per square yard.
“If there is a project of say some 10 acres, one has to spend Rs 1.5 crore on the project. Given a choice, most of the developers would opt for the third option,” he said.
As per existing rules, an owner or a developer of a layout has to hand over 30 per cent of the land for infrastructure like internal roads, drains, ducts etc to the government besides 10 per cent of land for social service activities.
Only in the remaining 60 per cent they have to develop the plots.
Under such circumstances, they would not like to part with the land.
“In our state, 40-feet roads are being insisted on. However, in the plots developed by Hyderabad Metropolitan Development Authority and Directorate of Town and Country Planning, only 30-feet of road is being developed instead of 40 feet. If the same strategy is adopted in the state, it would be beneficial for the developers and parting five percent of layout would be more acceptable,” Ramesh said.
A major developer in Vizag, on condition of anonymity, said normally a developer or a builder would have a margin of around 10 per cent and now with the government’s move, they stand to lose half of it.
No businessman would want to do a business for less or no profit, hence the burden would invariably be transferred to the customer, he explained.
