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The Rajasthan State Industrial Development and Investment Corporation (RIICO) has amended its Disposal of Land Rules, 1979, allowing industrial plots to be converted for commercial, residential, institutional, or mixed-use purposes. Under the revised norms, conversions to commercial use will be charged at twice the industrial rate, while residential or institutional conversions will cost 1.5 times, and mixed-use the highest applicable rate. In contrast, conversions from commercial to industrial or residential use will incur just 0.10 times the industrial rate. While the policy encourages flexible urban development, officials caution that low conversion fees could spur speculation and reduce revenue. Transparency and fair valuation will be key to sustainable implementation.
In a major policy move earlier this week, RIICO amended its Disposal of Land Rules, 1979, to allow industrial landowners across Rajasthan to convert their plots for alternative uses, including commercial, residential, institutional, and mixed-use developments. The reform aims to modernise land administration and respond to evolving urban and industrial demands within the state. Advertisement
As per the revised regulations, conversions from industrial to commercial use will now attract a charge equivalent to twice the prevailing industrial rate. Converting industrial plots into residential or institutional categories will incur 1.5 times the industrial rate, while mixed-use development will attract the highest applicable fee. Conversely, conversions from commercial to industrial or residential use will be levied at just 0.10 times the industrial rate.
While the policy has been introduced to simplify land management and encourage balanced development, some RIICO officials have expressed reservations. They believe the sharply reduced conversion rate could result in lower revenues for the corporation and open the door for speculative activities, particularly in prime locations.
Concerns have also been raised over the disparity between RIICO's reserve prices and actual market values. In the Jagatpura Apparel Park Industrial Area, for instance, the reserve price stands around INR 14,500 per square metre, while market valuations are estimated at nearly INR 150,000 per square metre - a significant difference that may incentivise conversions for profit rather than productive use.
RIICO's decision to relax land-use norms signals a major shift towards adaptable urban development across Rajasthan's industrial zones. While the move could help promote diversified growth and investment, it also poses challenges in maintaining fair valuation and preventing speculative misuse. Ensuring transparency in conversion processes and periodically reviewing pricing mechanisms will be crucial for the state to achieve a balance between development objectives and fiscal prudence.
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