The Madhya Pradesh government yesterday approved a policy that would allow private companies to mortgage government allotted land for investment purpose.
To boost investment activities, the state government has decided to allow private companies to mortgage leased or allotted land. As of now, the government used to consider land mortgage for private companies on case-to-case basis, said a government spokesperson.
The private companies, however, will not be able to change the land use terms and in case of any claim, litigation, or suit, the state government will also be a party in any court if any agency claim any dues on the leased land. The agency that owns the land will recover its all non-movable properties on the land and then fixed rates on market prices.
A meeting yesterday approved policies regarding conveyance of government patta land (leased land), mortgaging of land acquired for.
While creating loan against the land, state will have first right to claim all charges payable to its government. The leasee private company or investors will not the right to move to court for any litigation without making government a party. In case of default of loan the mortgager will recover dues from the immovable properties and assets first and later will use the land if no other option is left. The government authorities will fix value of the land at prevalent market prices at the time of its allocation to private player or investor.
The private firms will also be responsible for fixing all environment related issues over the land.
A number of companies are in processing of developing their projects on Madhya Pradesh land. It would be another facility for industries. However the main opposition Congress has flayed the decision and said it is not appropriate decision. How can a leasee create mortgage? This should always be in case-to-case basis. The non-serious investors will create mortgage against government land and may not repay and it would be a direct loss to the government, said Ajay Singh leader of opposition.