- 5% for poor beneficiaries in fresh private layouts
- No funds for Amaravati incomplete buildings
- Only bank guarantee, Controversial decision as cases are pending in HC
Amravati: AP cabinet approved few decisions today, Tuesday, out of which some are pertaining to real estate sector in the State and on construction of in complete buildings in Amaravati. These decisions appear to be controversial and may have to be reverted in future. The main reason is the cases pending in High Court on Amaravati and decision of leaving 5% to poor on layouts is blow the standard of real estate sector.
What Govt. says on real estate and lay outs
AP Govt. clarified that private layouts should allot 5% to poor beneficiaries from their layout, which will be implemented from April. The land should be handed over to Government, as per cabinet approval which happened today. Andhra Pradesh Real Estate sector is in downfall since 2019, due to three capitals issue, rise in sand and cement rates. Realtors have been migrating to neighbouring States such as Telangana and Karnataka. The buyers may not move forward to invest in the State if this policy is implemented, say AP realtors. The incomplete buildings in Amaravati gave a big blow to the real estate sector which invested crores of rupees on the projects. Even the buyers gave partial amounts as an advance, but the builders were on a wait and see posture post 2019 elections. Now State Govt did not came out with clarification about the funding on incomplete buildings in Amaravati. It only said,that it will give bank guarantee of approximately Rs. 3000 crore for completion, that too only for those buildings which are 70% completed.
The Government has a plan to auction part of the land or buildings which are yet to be completed.. Once they complete construction of buildings which are 70% completed by now, Govt. will go forward with auction so that they get a good price. But before taking that decision, Govt. should look after pending legal cases on Amaravati in High Court and also on the issue of three capitals. Today Minister Perni Naani said that the Govt. will move to Vizag very shortly and said it will be the executive capital, for sure.
How will Govt generatee Revenue
Neighbouring state, Telangana, is going in jet speed getting huge revenue from real estate and liquor. The scenario is reverse in Andhra Pradesh with both these main revenue yielding sectors getting drastically dropped for the past 2 years. Now the main question is, how will Govt. generate revenue, if these two sectors can’t pick up? What is Jagan’s Govt. going to do in future for these sectors to pick up? There is no answer right now, but Andhra Pradesh realtors are firm on their decision to pack up or sit silent for few months until they get clarity on State capital issue or on sand and cement rates.
No Business even at Executive Capital
There is slump in Vizag Real Estate sector too. Main reason is people are not much confident on Govt’s decision of Vizag becoming the executive capital and if there is change in Govt. in next elections, they may leave it behind and might move to other places for development. The same story is witnessed at Jagan Mohan Reddy’s own district, Kadapa. Telangana Govt. was successful in getting new projects and approval even for Regional Ring Road (RRR), but in AP, Outer Ring Road (ORR) did not move an inch for two years. AP CM should come forward and hold talks with Central Govt. on these issues in future.
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Hope AP Govt. will look after these issues and move forward with a positive attitude in coming days with a clear and firm decision.