HILT deadline extended again as industry response remains tepid

The Telangana government has extended the HILT application deadline till October 31 after receiving only 193 applications covering about 450 acres. Industries continue to cite relocation costs, DIF-related concerns and inadequate relocation infrastructure, resulting in a much lower response than expected.

Hyderabad: With a lukewarm response to the Hyderabad Industrial Lands Transformation (HILT) policy even a year after its launch, the Congress government has extended the deadline by another three months. Applications will now be accepted until October 31, after the earlier deadline failed to generate the level of participation expected by the government, with industries not being keen to opt for the scheme despite a series of concessions.

The HILT policy seeks to convert industrial land within the Outer Ring Road (ORR) into residential, commercial and other mixed-use developments while relocating industries to alternative sites outside the ORR. However, the poor response is being attributed to the government’s focus on unlocking the real estate value of Hyderabad’s industrial land rather than its actual objectives.

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Of the 9,292 acres spread across 22 industrial estates and parks, nearly 4,740 acres could potentially be converted after accounting for land required for roads and infrastructure.

Yet, applications so far cover only about 450 acres from 193 industries, which is less than a tenth of the potentially convertible land. The limited uptake is particularly significant because the government expects the applications to generate around Rs 1,500 crore through the Development Impact Fee (DIF). So far, Rs 150 crore towards its target has been deposited.

The government is expecting the extended window to attract another 300 applications. But the hesitation among functioning industries remains a key obstacle. Industry representatives have flagged conversion costs, uncertainty over the values used to calculate the DIF and the lack of fully developed relocation sites as major concerns.

For an operating factory, relocation is not simply a land-use change, as it involves rebuilding plants, shifting machinery, retaining skilled workers and recreating logistics and utility networks. This has forced many manufacturers to adopt a wait-and-watch approach, even as some sick, defunct or underutilised units have shown greater interest in the policy.

The government has sought to address these concerns. The Telangana Industrial Infrastructure Corporation (TGIIC), which was appointed as the nodal agency, has identified alternative sites at Madaram, Dandu Malkapur, Sangareddy, Ibrahimpatnam, Gowrelli and Thimmapur. Land acquisition and environmental clearances are also being pursued. The Hyderabad Metropolitan Development Authority issued a preliminary notification on July 25 last year for converting the land use of 21 industrial parks into multi-use parks.

The latest extension comes with another concession. The government will allow applications until October 31 using registration values that were in force before June 5. Officials said they were also considering extending the relocation period from one year to two years for small and medium industries and from three years to four years for large and mega units.

The policy has also faced legal scrutiny in the Telangana High Court, while the opposition parties have questioned its implementation and valuation framework. The government maintained that HILT is aimed at redeveloping ageing industrial areas, reducing pollution within ORR limits and creating better-equipped industrial locations outside the ORR.

But the numbers so far point to a fundamental challenge. Though the government has identified the land and its potential value, it is yet to persuade a significant section of the operating industry that moving is commercially viable.

Total applications: 193

Pending applications: 48 with Approval Committee; 24 with Scrutiny Committee; 57 at zonal level

Pending applications for additional documents: 54