Investors now have the opportunity to acquire undeveloped and semi-developed industrial land at reduced prices. In a recent directive, RIICO announced that the pricing would be determined by the basic land cost (DLC), in addition to development and administrative fees.
The shift from the previous practice of transparent auctions was initially aimed at drawing investors to remote industrial regions where demand is low and land remains unused. However, the directive does not differentiate and applies to all industrial zones, including urban locations.
According to RIICO’s order dated July 15, it is evident that the government aims to offer more affordable land to industries, with undeveloped or semi-developed land serving this purpose. Industries Minister Rajyavardhan Rathore informed that this decision achieves two key goals: monetizing RIICO’s unused land parcels and providing land to industrial entities at lower costs.
In fact, the industry within the state has advocated for direct land allotment rather than auctions, which increase acquisition costs and render the state less competitive. Suresh Agarwal, President of the Federation of Rajasthan Trade and Industry, remarked, “This decision will benefit the industry. However, we urge the government to accelerate the process of allotting undeveloped land, ensuring it serves a wide range of industrial sectors.”
Nevertheless, certain sectors of the industry have raised concerns regarding the allotment process for such undeveloped land. “While we fully support the government’s decision to make undeveloped land available at lower prices, the allotment process remains a concern,” they stated, choosing to remain anonymous.
According to the order, the allotment process is contingent upon RIICO’s Infrastructure Development Committee (IDC), which is predominantly composed of the corporation’s officials. “Ultimately, it will be their decision regarding who qualifies for allotment. Therefore, there is a potential risk of subjectivity influencing these decisions,” they expressed.
They suggested that the allotment of the undeveloped land should have also been done through the auction process. “It is more or less a fair process. There would be no question of somebody crying foul that the genuineness of their application for land was not considered,” they said.
