Is NIMZ land allotment to Dakshin Agropolis a legitimate deal?

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Right now, Indian economy is going through a slump. The growth projections for India’s GDP have come down ever since Modi took great initiatives like Demonetization and GST. There could be an economic crisis ahead, but we are quite optimistic that this phase will be over soon and that we will go back to getting adjusted to the new and changed environment – that’s the layman attitude towards solving all the problems.

UPA government in the past has sanctioned NIMZ for Medak district. This was planned in about 12,000 acres with an estimated investment cost of Rs. 40,000 crore. Once conceived the NIMZ was expected to provide direct employment for about 3 lakh.

It was so there were some doubts whether the NDA Government would follow the policy of UPA in promoting the proposal. NDA Govt somehow approved the proposal in 2016.

So far 3501 acres of land, out of a total 12,635 acres for the NIMZ, have been acquired by Telangana State Industrial Infrastructure Corporation (TSIIC) Ltd.

NIMZ vs SEZ

On Nov 6th 2017, Telangana IT Minister KTR said, an agreement to set up the  food processing zone has been finalized. Dakshin Agropolis- Andhra (Rajamundry) based company signed a Memorandum of Understanding worth Rs 6,000 crore to establish a food processing zone at NIMZ in Zaheerabad, and would require 300 acres.

KTR further added the food processing zone would generate employment for about 6,000 people which would consist of 5,000 women and 1,000 men.  People were wondering how KTR a staunch hater of Andhrites would sign MoU with them?

 

But is Dakshin Agropolis a legitimate company?  Can they invest 6000 crores in this Industry?

Company was incorporated on 10 Sept 2014-3 year old company.

Share Capital & Number of Employees of Dakshin Agropolis

Authorized Capital ₹20,000,000
Paid up capital ₹500,000
Number of Employees Unknown or less than 10

As per their balance sheet dated  March 2015- their

Share Capital is Rs.1lakh

Liabilities-Rs.4.3 lakhs approx

Assets-Rs.4.3 lakhs approx.

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We have seen many instances where SEZs were misused. Many companies diverted land allotted to them for commercial use and they have taken loans from National Banks not repaying. Thus land acquired was not serving the objectives of the SEZ act.

Developers have been misusing the Special Economic Zone policy to buy land for the stated purpose of setting up such zones and later de-notifying these and gaining from the price appreciation, according to the latest CAG report on SEZs.

“Land appeared to be the most crucial and attractive component of the scheme. Companies misuse the incentives provided by the govt.

NIMZ land allotment looks like a fishy deal unless KTR and his govt revisits the MoU or company management gives an explanation to the people of Telangana on how the investment capital will be funded.

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