Exorbitant land prices in Krishna dist deter investors

Vijayawada: Exorbitant land prices and very high land conversion charges known as Non-Agricultural Land Assessment (NALA) tax are the biggest impediments for industrial growth in Krishna district.

Though the Krishna district is located centrally in Andhra Pradesh with abundant water supply from Krishna river, the district is lagging behind in industrial development compared to other districts.

Except KCP Sugars Limited and handful of cement industries, there are no industries worth mentioning in the district.

On the other hand, the State government is inviting investors from across the world for setting up of industries and creating job opportunities in the State, including Krishna district.

Due to abundant fresh water facility available for kharif and rabi, the land prices are very high in many areas surrounding Vijayawada city.

Each acre of land costs not less than Rs 50 lakh in the surrounding mandals of Vijayawada like Penamaluru, Ibrahimpatnam, Agiripalli and Gannavaram.

On the outskirts of the city, the prices range from Rs 1 crore to Rs 2 crore per acre depending on nearness to highways and main roads.

The investors are reluctant to spend crores of rupees to purchase the land due to very high price. The share of land and taxes in the total capital reaches nearly 50 per cent of the total expenditure.

Consequently, the investors are not coming forward to set up industries in spite of 10 types of permissions granted in 21 days for setting up of industries by the government.

The entrepreneurs have to spend nine per cent of the land price as NALA tax for conversion of agriculture land into non-agriculture purposes particularly for residential or industrial purposes.

Besides, the entrepreneurs have to pay 14 per cent of the land value as development charges to the local bodies like UDA, Capital Region Development Authority to obtain permission for setting up of industries.

If an industrialist purchases Rs 1 crore worth land, he has to pay Rs 9 lakh as NALA tax and again Rs14 lakh as development charges.

Again, he has to spend for infrastructure development like laying roads, getting power supply, obtaining permissions from Pollution Control Board, revenue department, industries department, labour department and fire services departments.

T Parthasaradhi, president of Andhra Pradesh Small Scale Industries Association, said the exorbitant land prices and agriculture conversion charges are the biggest impediments to the promotion of industries in Krishna district.

He said the land prices are very high so the NALA charges and development charges are also very high

He said the government should reduce the NALA taxes from nine per cent to two per cent or four per cent to attract entrepreneurs. Parthasaradhi felt the government should reduce the power tariff rates in order to promote industries.

The government in order to encourage entrepreneurs was granting permissions in 21 days as per the single window system. Vasireddy Muralikrishna, general secretary of Federation of Andhra Pradesh Small and Medium Industries Association, said Krishna district is lagging behind in industrial development due to high prices of land and due to lack of awareness among the people on setting up of industries.

He said education curriculum should be changed to generate new entrepreneurs in the State. He stressed upon the need to establish more Industrial parks with basic infrastructure facilities to encourage more industries in the district.

K Kanakadurga, one of the active women entrepreneurs in Krishna district and Managing Director of Rajeswari Harinacon Blocks, felt the ghovernment should address the problems being faced by entrepreneurs.

She said shortage of skilled man power is another problem being faced by industrialists. She felt the there is mismatch between the education imparted in colleges, universities and industry requirements.

Andhra Pradesh Chamber of Commerce and Industry president M Murali Krishna said the representatives of trade bodies are submitting representations to the government to concede their demands.

He recalled that Finance Minister Yanamala Ramakrishnudu recently invited trade bodies for talks before presenting the annual budget and hoped the State government would give tax relaxations to promote industries in the State.