Rise in land diversion rates hits industry in Khandwa

A typical gimmick by the bureaucracy is taking its toll on industry in Khandwa.

A hike in land diversion rates is proving to be a stumbling block in the way of new industries coming up in Khandwa (western Madhya Pradesh), known for cotton ginning, processing, cotton seed crushing, and oil and dal processing.

The combined turnover of industries in Khandwa is approximately Rs 150 crore.

Sources said no unit had come up in Khandwa since 1998. A high land diversion tax, high power tariffs, and the levy of minimum power consumption charges are keeping small-scale industrialists away from the place. Further, poor infrastructure has also aggravated the problem, sources say.

"Diversion tax rates have gone up by 250 per cent since 1962. In some cases, land diversion tax exceeds prevailing land prices, forcing industries to drop plans to acquire land," said Subhash Bansal, president, Bharatiya Janata Party (BJP) (district industry cell) and secretary, Cotton Seed Crushers Association. He had also raised the issue before the chief minister, Shivraj Singh Chouhan, but despite assurances, but nothing has moved so far even after one year.

Tax rates vary area-wise. In the Singhartalai industrial area, the government has raised land diversion rates from 30 paise per 100 sq ft (in 1962) to Rs 16 in 1985 and Rs 83 in 1998.

Most of the units in Khandwa are seasonal in nature and are agro-based, dominated by the cotton seed sector.

"The Madhya Pradesh State Electricity Board levies 150-200 per kV minimum charges from each SSI unit even in off-season or non-peak season. A small-scale unit with a connection with a load capacity of 100-150 kVA pays a minimum of 20,000 per month which escalates the operating costs," Bansal added.

The BJP district industry cell has demanded sops from the state government to revive ailing industrial units and also for the relief of those displaced by Indira Sagar dam project.

Thousands of people of Harsood town, which has now been submerged under 1000 Mw Indira Sagar reservoir, have settled in Khandwa.