Industries hail govt move to seek suggestion on MVR

PATNA: The state registration department has invited objections and suggestions regarding fixation of minimum value rate (MVR) for sale and purchase of land. The government charges stamp duty based on circle rate of the land being sold.
The industrialists in the state were grappling with manifold increase in the 'circle rate' of the rural land which is higher than the actual rate in many areas.The local industrialists and small and medium entrepreneurs, who are facing the problem of land crunch, have welcomed the government move.
The problem of the industrialists who want to purchase land at affordable rate to set up their units is not limited to the high circle rate only. They also have to face the income tax (I-T) department in case they purchase the land from the farmers at a rate lower (prevailing rate) than the 'circle rate' fixed by registry offices, said the chairman, real estate subcommittee of Bihar Industries Association (BIA) Narendra Singh.
In such cases, the I-T department treats the money saved on purchasing rural land, which is a difference of the 'circle rate' of the land and its actual price, as 'profit' made by the industrialists for purchasing the land at lower price. The I-T department realizes income tax on that so called 'profit', Singh said. There has been manifold increase in the MVR (circle rate) of the rural land fixed by the respective district registry offices than their actual price, he added.
Singh said the situation sometimes comes to such a pass that the farmers needing to sale their land to meet any exigency have to wait for long to get the land price at the circle rate and the industrialists willing to purchase the land at lower price start feeling reluctant. It has affected the industrial development as the lands are not sold for industrial purposes and the farmers needing money also suffer, he said.
The decision of the state registration department to invite suggestions from the aspiring industrialists/entrepreneurs has given them the opportunity to voice their concern over the dilemma of actual price and the circle rate of an area, said former BIA president K P Jhujhunwala.
Land crunch affects small and medium entrepreneurs (SMEs) aspiring to set up their industries in Bihar which has mostly agriculture land. CM Nitish Kumar had announced at Udyami panchayat a couple of months back that the state government was actively considering to give green signal for setting up private industrial estate, a demand made by BIA president KPS Keshri and other local industrialists.
But the very high 'circle rate' of the rural land could pose difficulty to the industrialists in purchasing land for setting up private industrial areas. Former BIA secretary general Sanjay Goenka said in the state industrial policy, 2011, a change should be brought about to include land and building along with the plant machinery for giving subsidy to the industry. Such subsidy is being given under the Food Processing Policy to the food processing industry. The BIA will raise the issue for adding land and building to the plant and machinery for giving subsidy at the midterm meeting with the industries department to discuss industrial policy, Goenka said.