Maharashtra Industrial Development Corporation Announces New Industrial Policy
The Maharashtra Industrial Development Corporation (MIDC) has unveiled its novel industrial policy, poised to significantly influence the real estate landscape in Mumbai. This policy has garnered a warm reception from Mumbai's real estate developers, despite certain allegations of impropriety.
A New Dawn for Mumbai Real Estate
The freshly introduced industrial policy by MIDC offers a beacon of hope to real estate developers operating in Mumbai. It is viewed as a potentially lucrative opportunity for the city's real estate sector.
MIDC's decision involves the release of approximately 35,000 acres of land within Special Economic Zones (SEZs) for residential project development. The new guidelines stipulate that around 40% of the total SEZ land can now be allocated for residential construction, while the remaining 60% will be designated for commercial ventures.
Economic Expectations and Industry Response
The Maharashtra state government anticipates revenue generation of approximately Rs. 3.08 lakh crore from this initiative. Bhushan Gagrani, the CEO of MIDC, stated that this SEZ land has remained underutilized for the past five years and further added that he believed this governmental action would provide a boost to the industry and result in the creation of a plethora of job opportunities.
According to the new resolution, Bharat Forge emerges as a prominent real estate developer, possessing approximately 11,500 acres in Pune, outstripping DLF's land bank of 7,900 acres.
Additionally, Mukesh Ambani and Reliance Group have expressed their gratitude toward this updated policy, which facilitated their acquisition of around 7,500 acres in the state.
Addressing Concerns and Allegations
Mr. Gagrani firmly dismissed claims of potential real estate scams, emphasizing that the government has increased the allocation of land to industries from 50% to 60%. He clarified that developers are permitted to construct and sell residential properties on the remaining land within the Mumbai real estate market.
However, lawyer and social activist YP Singh raised concerns, stating that the decision regarding land allocation should fall under the purview of the state's housing ministry, not the industrial ministry. Singh also implicated Narayan Rane, the Minister for Industries, in alleged land scams.
Countering these allegations, Mr. Gagrani reiterated that there is no possibility of real estate scams. He emphasized that home construction by real estate developers can only commence after industrial development is complete.
Historical Context and Expert Opinions
The state government initiated the separation of land under SEZ nearly a decade ago, acquiring it from farmers. Changes to the SEZ policy were implemented during the 2005-2006 period.
While Raigad-based activist Ulka Mahajan voiced criticism of the policy, numerous real estate developers have welcomed it. Niranjan Hiranandani, Managing Director of the Hiranandani Group, emphasized the necessity of such a policy to address the need for housing for all. Nevertheless, Hiranandani expressed reservations regarding its effective implementation. Some observers suggest that the policy's implementation is strategically timed in anticipation of the 2014 general election.