Augmentation charges too high, hike unilateral, say industrialists

GURUGRAM: Augmentation charges — money charged from an industrialist for additional floor area ratio (FAR) — has become a bone of contention between industrialists and HSIIDC (Haryana State Industry and Infrastructure Corporation). While industry members are saying the charges were increased arbitrarily, HSIIDC officials say the increased charges are required to offset additional pressure on infrastructure.
Initially, FAR in Udyog Vihar was 75. In 2006-2007, it was raised to 125 against augmentation charges of Rs 500/sqm. A couple of years ago, FAR was again raised to 150, for which augmentation charges were fixed at Rs 4,000/sqm.

Six months ago, HSIIDC again revised the charges. This time, augmentation charges for increasing FAR from 75 to 125 went up from Rs 500/sqm to Rs 8,000/sqm, while that for increasing FAR from 125 to 150 went up from Rs 4,000/sqm to Rs 4,800/sqm. For industries in Udyog Vihar, especially in the MSME sector, this came as a huge setback.

“HSIIDC has unilaterally raised augmentation charges without consulting the industries. Now, a MSME with 100sqm plot will have to pay over Rs 60 lakh just as augmentation charges,” said colonel Raj Singhla of Udyog Vihar Chamber of Industries.

Industrialists have flagged the issue with the government, saying they can’t sustain such high prices. The matter was discussed at a meeting with additional chief secretary, Devendra Singh, held in Gurugram on December 17.

“These prices are not sustainable. The government has to come up with an alternative. We’d highlighted the issue with the state industries secretary, who assured us of some changes, but there hasn’t been any official announcement yet,” said city-based industrialist Ashok Kohli.

HSIIDC officials said at a time when industrialists aren’t letting them inspect their factories for FAR violations, they shouldn’t expect any relief in augmentation charges. “We have to increase augmentation charges so that we can augment infrastructure to bear the additional pressure from increased FAR due to violations,” said a senior HSIIDC official, requesting anonymity.

Industrialists though said HSIIDC already has Rs 80 crore in its coffers as augmentation charges, and that not a single paisa of that has been spent on infrastructure development in the industrial estate.