Industries and IT Minister K.T. Rama Rao’s demand that the Central Government withdraw its plans to sell assets worth ₹ 40,000 crore in Telangana has reflected the concerns expressed by different States over the manner in which lands acquired by them are being treated.
Mr. Rama Rao lambasted the Centre for its attempts to sell off ₹40,000 crore assets including those of the public sector undertakings in Telangana. The State had allotted 7,200 acres to Hindustan Cables Ltd, Hindustan Fluorocarbons, Indian Drugs and Pharmaceuticals, HMT, Cement Corporation of India and Ordnance Factories claiming that the State had allotted these lands at marginal prices and, in a few cases, offered for free as it would generate employment for locals and facilitate industrial development.
Mr. Rama Rao was not alone in raising the issue in the form of a letter to Union Finance Minister Nirmala Sitharaman. The issue of lands acquired by the States and transferred to the Centre found mention in the meetings of the Southern Zonal Council and was included in the agenda of its recent meeting held in Thiruvananthapuram.
The Tamil Nadu Government raised the issue claiming that it was the State government that acquired and transferred huge tracts of land for establishment of infrastructure like Central public sector undertaking, airports and others. The State would incur huge costs in acquiring the land and would transfer it free of cost while the Government of India/Airports Authority of India would, in turn, transfer the asset to a third party.
Accordingly, the value realised/revenue accrued thereby should be proportionately shared with the State Government reflecting the huge investment made by the respective State, Tamil Nadu Government argued. It wanted steps to ensure that the value of land should be converted as equity of the State Government in the special purpose vehicle formed or an appropriate revenue sharing agreement proportionate to the investment is arrived at before any further asset transfer takes place,
The issue of transfer of lands to the Central Government for some specific purposes too figured in the meeting and wherein concerns were expressed that at the time of corporatisation, privatisation and monetization of these assets either for the whole organization or specific assets, the value of the lands would accrue only to the Government of India. The States have accordingly demanded that the respective State Government be allotted equity in proportion to the value of lands involved in case of corporatisation.
In case of monetization by the special purpose vehicle or by privatisation as a running concern, the proportionate share of proceeds or equity stake should be granted to the State. The States were well within their rights to resume land in toto and put to other productive use based on larger public purpose if the original conditions were violated. The SZC referred the matter to the Ministry of Civil Aviation, Ministry of Corporate Affairs and Department of Economic Affairs for their comments.
