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Real estate major DLF has been asked by the Haryana government to offer existing market rates to farmers to buy land for its multi-product SEZ in Gurgaon. This could significantly increase the company’s investment in purchasing the land.

At present, floor price in the state is just about Rs 22 lakh per acre. On the other hand, prevailing market price in the areas notified for the DLF SEZ is 4-5 times of this. The project has been notified in a close proximity to Reliance Industries’ (RIL) Jhajjar SEZ, where land has been acquired by the company at the floor price. However, most land-tracts in the Jhajjar area are considered infertile. As such, market price in the area is not as high as that of Gurgaon, where the DLF project is located.

When contacted, a DLF spokesperson said: “We are anyway buying land at prices which are mutually agreeable to us as well as the farmer. We are not basing our purchases on the floor price.”

However, sources in the Haryana State Infrastructure and Industrial Development Corporation (HSIIDC) said that they were recently approached by the company to facilitate acquisition for the project. “We were told that some large tracts of land in the notified area has been bought by individuals and groups, mostly having politically vested interests. However, we will not facilitate any acquisition till the company has acquired at least 75% of the total project area,” an HSIIDC official said.

It is learnt that the company had sought the state government’s assistance in the way of imposing section 6 of the Land Acquisition Act in some tracts. This section is a tool used by state governments to acquire land from farmers for developing civic amenities.

As a matter of policy, the state government cannot buy agricultural land without the consent of the farmer. There, however, is a catch to this policy. Once a land is notified for a particular project, the owner cannot apply for a change in use (CLU). It means, if he does not intend to do farming on that land, he will necessarily have to sell it for the notified project.

DLF plans to develop its Gurgaon SEZ in four phases. The first phase of 500 acre is expected to be completed by 2009 and the final phase by 2018. The company expects the SEZ to attract an investment of Rs 1,24,000 crore in terms of fixed assets like industrial, commercial and residential units. The annual export potential of the project has been pegged at $10-12 billion once it is fully operational.

Source: The Economic Times