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RDM proposes realtors to share 80% profit with farmers; prices of plots/flats to zoom

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RDM proposes realtors to share 80% profit with farmers; prices of plots/flats to zoom

Last updated: June 2 2011
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  • RDM proposes realtors to share 80% profit with farmers; prices of plots/flats to zoom

    RDM proposes more equitable deal for landowners; realtors may have to share 80% profits - The Economic Times

    NEW DELHI: The rural development ministry has proposed that farmers should get 80% of the profits from resale of land bought from them for development, much higher than that suggested by a Sonia Gandhi-led panel.

    The National Advisory Council had pegged the compensation after resale at 25% of the profits made by private developers. The proposal, aimed at giving farmland owners a better deal, follows protests in Uttar Pradesh's Greater Noida last month over land acquisition.

    "The ministry of rural development has proposed introduction of this clause in the Land Acquisition (Amendment) Bill," a rural development ministry official told ET. The proposed profit-share will be calculated after the developer has deducted development costs and taxes.

    However, developers say the idea is not viable. The UP protests were the latest in a series of agitations across the country over acquisition of land for industry, which have held up billions of dollars in investments and forced several developers to scale down plans for special economic zones.

    The matter has added urgency to the government's plan to introduce more farmer-friendly clauses in the Land Acquisition Amendment Bill and Resettlement and Rehabilitation Bill. "One of the major reasons for the resentment among farmers is that without development, their lands are of low value, and after it the value of the land increases manifold," a ministry official said.

    "We believe this is not right and they should partake majority of the benefits that private developers make by transferring the land," the official added. The clause, however, might not go down well with industry, though it is not opposed to sharing its profits from resale of developed land with its original owner. "It is not a viable proposition for any developer. We will book losses if this happens.

    As a developer, we take all the risk of the development including getting permissions and selling. We would rather get into the contracting business where profits will be better," says Shiv Priya, executive director at Amrapali Group.

    Industry body Federation of Indian Chambers of Commerce and Industry (Ficci) too does not favour such a high limit. "An 80% might be too high... but as a principle, some amount of the profit should be shared. I cannot comment on the exact percentage, but companies should share the profits," said Ficci Additional Director Chetan Bijesure. Experts say these proposals do not address the real issue. "These are half-baked solutions in the prevailing scenario because companies can manipulate their profit making the step useless," said Mukul Rohatgi, senior advocate and former additional solicitor-general of India.

    Industry supports Haryana model

    In the case of initial compensation for land acquisition, the ministry has proposed a one-time payment and a 30-year annuity payment to farmers to ensure continuous income support. The ministry's proposed annuity model is in line with that adopted by the Haryana government.
  • #2

    #2

    Re : RDM proposes realtors to share 80% profit with farmers; prices of plots/flats to zoom

    Best option in current time is to lock a ready to move flat (at around Rs 4000 - 5000 per sq ft) or to book an under construction flat in a safe location (like 50 (Mahagun Maple, Amrapali Eden Park etc), 34 (Supertech), 52, 45, 100, 110 etc.

    These above sectors are safe as they have other high rises and plots where people are living for a long time.


    Suppose builder is making Rs 1000 per sq ft profit on a sale price of Rs 3000 per sq ft.

    He would have to give Rs 800 per sq ft to the farmers. So, he would be left with Rs 200 per sq ft profit only which is peanuts. To survive, builders and govt authorities would increase the price multiple fold to have the same profit as before.

    The above would lead to a general price rise across the board.

    hence, it is prudent to soon buy a ready to move property or lock an under construction property in safe sectors at current justified rates.

    Comment

    • #3

      #3

      Re : RDM proposes realtors to share 80% profit with farmers; prices of plots/flats to zoom

      Originally posted by sanjeevchaudhri View Post
      Best option in current time is to lock a ready to move flat (at around Rs 4000 - 5000 per sq ft) or to book an under construction flat in a safe location (like 50 (Mahagun Maple, Amrapali Eden Park etc), 34 (Supertech), 52, 45, 100, 110 etc.

      These above sectors are safe as they have other high rises and plots where people are living for a long time.


      Suppose builder is making Rs 1000 per sq ft profit on a sale price of Rs 3000 per sq ft.

      He would have to give Rs 800 per sq ft to the farmers. So, he would be left with Rs 200 per sq ft profit only which is peanuts. To survive, builders and govt authorities would increase the price multiple fold to have the same profit as before.

      The above would lead to a general price rise across the board.

      hence, it is prudent to soon buy a ready to move property or lock an under construction property in safe sectors at current justified rates.
      Sanjeev, what about PAN Oasis Sec 70 ? Is it safe or not ? I know you have good knowledge about NOIDA.
      If already constructed building is parameter then it has a school adjacent to plot and on other side LIG flats.

      Comment

      • #4

        #4

        Re : RDM proposes realtors to share 80% profit with farmers; prices of plots/flats to zoom

        Originally posted by sanjeevchaudhri View Post
        Best option in current time is to lock a ready to move flat (at around Rs 4000 - 5000 per sq ft) or to book an under construction flat in a safe location (like 50 (Mahagun Maple, Amrapali Eden Park etc), 34 (Supertech), 52, 45, 100, 110 etc.

        These above sectors are safe as they have other high rises and plots where people are living for a long time.


        Suppose builder is making Rs 1000 per sq ft profit on a sale price of Rs 3000 per sq ft.

        He would have to give Rs 800 per sq ft to the farmers. So, he would be left with Rs 200 per sq ft profit only which is peanuts. To survive, builders and govt authorities would increase the price multiple fold to have the same profit as before.

        The above would lead to a general price rise across the board.

        hence, it is prudent to soon buy a ready to move property or lock an under construction property in safe sectors at current justified rates.

        Sanjeev...........Do you have idea about under construction sector - 137...I have a flat there.Whats your take...I have got it at a decent rate with Purvanchal builder...Is it prudent to hold

        Comment

        • #5

          #5

          Re : RDM proposes realtors to share 80% profit with farmers; prices of plots/flats to zoom

          Originally posted by chandra2034 View Post
          Sanjeev, what about PAN Oasis Sec 70 ? Is it safe or not ? I know you have good knowledge about NOIDA.
          If already constructed building is parameter then it has a school adjacent to plot and on other side LIG flats.
          In my opinion, Sector 70 is quite safe. There is a running school as well as individual plots.

          Comment

          • #6

            #6

            Re : RDM proposes realtors to share 80% profit with farmers; prices of plots/flats to zoom

            any idea about sector 120?

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            • #7

              #7

              Re : RDM proposes realtors to share 80% profit with farmers; prices of plots/flats to zoom

              Originally posted by tyagi_rajat View Post
              any idea about sector 120?

              also any idea about sector 74?

              Comment

              • #8

                #8

                Re : RDM proposes realtors to share 80% profit with farmers; prices of plots/flats to zoom

                74,75,76,77 and 78 are not litigation free. Some of the farmers from these sectors have not accepted compensation and their cases are filed in High Court.

                120 is a small sector and appears to be safe.

                Comment

                • #9

                  #9

                  Re : RDM proposes realtors to share 80% profit with farmers; prices of plots/flats to zoom

                  Originally posted by sanjeevchaudhri View Post
                  74,75,76,77 and 78 are not litigation free. Some of the farmers from these sectors have not accepted compensation and their cases are filed in High Court.

                  120 is a small sector and appears to be safe.
                  Sanjeev,

                  Any thoughts on sector-137 and Purvanchal as a builder.I bought it a decent rate there.As of now this appears to be ok.What are your opinions

                  Comment

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