Hyderabad: Realty slump caused by demonetisation has halted the auction of lands by the Telangana government.
The government has readied an e-auction notification, putting 400 acres of different land parcels on the city outskirts for sale. However, with realty transactions taking a beating since the November 8 demonetisation announcement, the government kept the release of notification pending.
Meanwhile, the government is offering these land parcels to industries for an outright sale at market rate, if any investor comes forward to set up an industry.
The Telangana government had expected to raise Rs 10,900 crore from the sale of land in the budget this year (2016-17) for various schemes and projects. However, it could hardly earn Rs 1,500 crore during auctions held in May and August 2016.
In this backdrop, the government identified nearly 400 acres in Hyderabad, Ranga Reddy, Vikarabad, Yadadri and Medchal districts in October 2016.
Since all these land parcels have proximity to Hyderabad, they command huge real estate value. The government was expecting a bounty by putting them up for auction in November 2016.
However, the sudden announcement of demonetisation on November 8 dashed its plans.
The government tried to issue auction notification again in December 2016 and this month, but it held back the notification as the realty situation did not improve yet.
“The chances of realty picking up in the near future looks remote. Due to this, we have decided against issuing the auction notification for at least another four to six months. In the meantime, we are offering these land parcels to industrialists or corporates. They can purchase directly by paying the market price for setting up industries or corporate offices,” said a senior official in TS Industrial Infrastructure Corporation, which has been appointed as the nodal agency for auction of lands. Officials claim this would be a good opportunity for industrialists to buy land parcels at comparatively cheaper price over the prices that they fetch during auctions.
Ripple effect
- The government has decided against put off issuing notification on land auction for at least another four to six months.
- It is, however, open to sell the land parcels to companies which want to buy the land at market prices.
- The slow down in the real estate market after the demonetisation appears to have affected the demand for land.
