Noida may 'rationalise' land rates, seeks expert opinion

Noida may ‘rationalise’ land rates, seeks expert opinion

NOIDA: With several of its recent commercial, residential and institutional schemes ending in disappointment, the Noida Authority has decided to evaluate the land allotment rates in the city so as to rationalise them. And to do so, the Authority will invite a panel of chartered accountants, cost accountants and asset valuation firms.

The decision could have a long-term impact on the future growth of the city, officials said.

Since November 2019, the Noida Authority has launched 13 different schemes to offer residential, commercial, institutional and industrial plots. However, the Authority was only able to generate traction while allocating industrial plots.

The remaining schemes failed to generate adequate response. In its report last year, the Comptroller and Auditor General had also raised objections over the way Noida has been fixing the land value.

“We have realised how adversely the increased rates affected the response for these schemes under all categories. Commercial allocation was the worst hit and we found it difficult to find takers for some schemes that were launched. Most of the potential buyers told us that the rates were too steep. Pandemic further broke our back,” said an Authority official.

The expert agency that is being scouted will be given the mandate to gather information from all the verticals and departments of the Noida Authority to identify the existing cost-plus model, costing structure, benchmarking with costing methodologies adopted by other municipal bodies and ascertain the value of the Authority’s assets to determine land cost as per sectors and asset class, officials said.
Noida may ‘rationalise’ land rates, seeks expert opinionThe agency will also be asked to carry out a survey of the localities and sectors in order to recategorise the value of sectors. At present, the land premium commanded by the Authority varies according to size of the plot and profile of the sector. While for residential plots, the Authority has created six price bands as per urbanisation within sectors, for industrial and commercial plots, the city has been divided into three circles.

Officials of the Noida Authority are of the view that existing land rates for commercial and housing categories need to be rationalised urgently. “But without an expert view, we will not be able to convince the board and senior officials to rationalise the property rates,” said another official.

The Authority commands a premium of Rs 2.44 lakh to Rs 3.78 lakh per sqm for small commercial plots measuring up to 100 sqm within the urbanised and developed sectors in the city. “At that price we can get ready-to-move-in shops in operational market complexes within large apartment societies in 7X sectors. Hence there is no point of buying a shop or commercial plot from the Authority,” said Jais Khan, a fruit juice seller.

When contacted, additional chief secretary of infrastructure and industrial development department Alok Kumar said, “It is an operational decision of the Noida Authority to get an independent opinion and view on their financial matters. If they approach the government with some proposal to revise or rationalise land cost, we will take a call on the subject.”