J&K Govt Rejects Ramdev's Rs 1,000-Crore Patanjali Park Proposal

The decision is a clear setback to the Modi government's preferred optics of the Article 370 move opening up J&K's economy to outside investment.

Srinagar: Yoga guru and businessman Baba Ramdev’s plans to expand his business to Jammu and Kashmir have suffered a setback.

The government in the J&K Union Territory has turned down the proposal of Ramdev-owned Patanjali Food and Herbal Park Private Limited to acquire over 1,300 kanals of land in Jammu for setting up an industrial park.

The company had submitted the proposal to the government in 2017, planning to invest Rs 1,007 crore to set up the park that would house at least different 30 units at Meen Chakran in Bari-Brahmana area of Samba district in Jammu.

In the past two years, the proposal came up for discussion at least twice in J&K’s Apex Projects Clearance Committee (APCC), which clears new industrial units to be set up across J&K.

When the Committee, headed by chief secretary B.R. Subramanyam met again last month, the proposal was rejected despite the fact that the government had shown willingness earlier to consider it.

It has been learnt that the concessions sought by the company for paying land premium in 10 years and its demand to waive off the lease rentals became “the main grounds” for rejection of the multi-crore proposal.

“The concessions sought by the company are outside the scope of the J&K industrial policy as land premium is always upfront and one-time payment,” reads the minutes of the meeting that was held on October 29.

“The conditions put forth by the company are not considered and hence the proposal is dropped.”

As per the industry norms in J&K, the company was asked to pay lease rentals of Rs 32.50 lakh annually at the existing rate of Rs 3.75 lakh per kanal of land, per annum. The J&K Industrial Policy also envisages a hike of 10% every two years in the lease rentals.

Also read: How Strong is the Economic Rationale Behind Scrapping Article 35A?

“Over the next 40 years of the initial period of lease it (the rentals) would amount to more than Rs 52.89 crore. Thus, SIDCO (State Industrial Development Corporation) would incur huge losses on this account as lease rentals are the only revenue generation resource of the Corporation,” reads the minutes of the meeting.

While turning down the proposal, the high-level committee which has members from different departments also observed that payment of premium in instalments will lead SIDCO, which is the nodal agency for development of industries in J&K, into financial tightness since the Corporation has already paid Rs 25 crore for acquisition of the land.

“If the request of the company is considered as a one time exception, SIDCO shall recover the land acquisition cost in five years and shall earn Rs 26 crore in next five years, besides saving Rs 108 crore toward development cost,” reads the minutes.

The director of Industries, Jammu, Anu Malik said the relaxations sought by the company were not suiting J&K’s interests. “The company also didn’t engage in negotiations, showing that they were not serious,” said the director.

A hoarding with an image of Baba Ramdev is seen inside a Patanjali store in Ahmedabad. Photo: Reuters/Amit Dave

The company proposal envisaged the setting up of an industrial park which would house more than two dozen units involved in the production of a range of items.

“They were planning to set up a Patanjali Park with various units related to the manufacturing of organic beauty products, medicines derived from herbs, and so on. There was even a proposal for growing small nurseries to produce essentials like flour and oil,” said the director, adding that the quantity of the land sought by the company was justified, given their “vast plan”.

The company proposal reveals that Patanjali was intent upon developing horticulture, agriculture and an herbal-based FMCG (mainly comprising food, cosmetics and Ayurvedic medicines) unit.

The Patanjali Food and Herbal Park Private Limited, a wholly-owned subsidiary of Patanjali Ayurved, had claimed its primary objective for setting up the unit as the establishment of an integrated value chain processing to empower farmers in the area and create employment.

The government committee, however, justified turning down the proposal saying the company was engaged in commercial activities and the waiver of lease rentals was considered only in case of public utilities.

An official said that following the rejection of the proposal the committee directed SIDCO to immediately take possession of the land from district administration and submit a proposal for its development into a new industrial estate.

Baba Ramdev had for the first time talked about establishing the manufacturing unit in J&K in April 2017. “We are in the process of acquiring 150 acres in Jammu and Kashmir to set up a manufacturing unit which will offer jobs to Kashmiri youth,” he had said at a function in Delhi.

Also read: US to India: Steps to Improve J&K’s Economy Would Require ‘Normalised’ Political Environment

Earlier, the erstwhile PDP-BJP government had shown willingness to allot the land to the company. Besides 1,300 kanals of land, the company had also sought allotment of undeveloped land at the site at half of the land premium.

Subsequently, the government acquired 1,457 kanal of land at Meen Charakan. The proposal was later discussed in 42nd and 43rd APCC meetings.

In the 42nd meeting, the committee introduced a the rider that the company should use horticulture products like apple, walnut and apricot, abundantly grown in Kashmir, as raw material for manufacturing their end products.

It, however, advised that the land acquirement of Patanjali Foods be critically assessed through their detailed project report to quantify the minimum requirement of land for setting up the unit.

In its response through a letter dated September 9, 2017, the company agreed that it would utilise all horticulture items produced locally as raw material and provide advisory service to farmers in the identification of potential medicinal plants using scientific cultivation methods, along with ensuring the assured market for their quality produce.

A migrant worker straightens an iron rod at the construction site of a parking lot in Srinagar October 30, 2019. Photo: Reuters/Danish Ismail/File Photo

Accordingly, SIDCO, in its 136th meeting held in December 2017 approved to notify 1,457 kanals of land for industrial use for Patanjali.

This is the first proposal of an “outside” company that has been dropped by the J&K government following the reading down of Article 370 and the bifurcation of the state of Jammu and Kashmir into two Union Territories.

The BJP-led government at the Centre had claimed that reading down of J&K’s special status will pave way for roping in outside investment to develop industries in J&K and help employment generation in the region which is supposedly riddled with unemployment.

Another senior official of the industries department said the chief secretary-headed committee took the decision considered all the circumstances while deciding on the merit of the case. “It (clearing the case with the concessions sought by the company) could have set a bad precedent for future even as we are aware of the fact that the company would have helped in employment generation in J&K,” said the official.