MSMEs raise Red Flag over HMDA Multi Use Zone proposal

1. HMDA proposes conversion of nearly 9,250 acres across more than 20 industrial estates into Multi Use Zones under the HILT Policy.
2. FETSIA warns the move could impact nearly 3 lakh industrial units and the livelihoods of several lakh workers, seeking a 45 day consultation period instead of seven days.
3. Industry bodies urge the government to develop fully serviced industrial parks outside the ORR before relocating existing manufacturing units.

MAHESH AVADHUTHA I hyderabad

A major policy shift proposed by the Telangana government to transform industrial land within the Hyderabad Metropolitan Development Authority (HMDA) limits has sparked widespread concern among Micro, Small and Medium Enterprises (MSMEs), with the Federation of Telangana Small (MSME) Industries Associations (FETSIA) urging the government to pause the process and hold extensive consultations with stakeholders.

The controversy stems from the draft notification published by HMDA on July 26 proposing variations to the Master Plan under the Hyderabad Industrial Lands Transformation Policy (HILTP). The notification seeks to convert nearly 9,250 acres of industrial land spread across more than twenty industrial estates into Multi Use Zones, opening them for residential, commercial, institutional, IT, hospitality and mixed use developments.

The notification lists several prominent industrial estates including Patancheru Phases I to IV, Jeedimetla, Uppal, Cherlapally, Mallapur, Nacharam, Kukatpally, Balanagar, Moula Ali, Sanathnagar, Gandhinagar, Pashamylaram, Auto Nagar Hayathnagar and others. It states that the lands, presently notified as industrial use under the HMDA Master Plan 2021, are proposed to be redesignated as Multi Use Zones, subject to exclusion of master plan roads, water bodies, canals and buffer areas. Objections and suggestions have been invited within seven days of publication of the draft notification.

FETSIA, the apex federation representing more than 50 industrial estate associations and Industrial Area Local Authorities (IALAs) across Telangana, has submitted representations to Special Chief Secretary Jayesh Ranjan, HMDA Metropolitan Commissioner, TGIIC and other authorities, arguing that such a far reaching proposal cannot be implemented with only a week for public consultation.

According to FETSIA President M. Raja Mahender Reddy, the proposed land use change could directly affect nearly three lakh industries operating across these industrial clusters while putting at risk the livelihoods of several lakh workers and the investments of entrepreneurs who have built manufacturing units over decades.

The federation clarified that it is not opposed to planned urban development or revision of the Master Plan, but insists that implementation must be transparent, legally sustainable and balanced with the need to protect existing industries, investments and employment. It argues that Section 15 of the HMDA Act, 2008 envisages meaningful public participation before any Master Plan modification and that a seven day objection period defeats that purpose. FETSIA has demanded that the objection period be extended to 45 days.

The association also questioned the financial implications of the HILT policy, pointing out that the proposed Development Impact Fee ranging between 30 percent and 50 percent of market value would place an unbearable burden on MSMEs operating on limited working capital. It suggested a separate concessional fee structure for MSMEs and proposed that industries be allowed to lock in current land values while paying the balance only when redevelopment or land use conversion actually takes place.

Another major concern relates to relocation. Raja Mahender Reddy said industries should not be compelled to move unless the government first develops fully serviced industrial parks outside the Outer Ring Road with roads, power, water supply, drainage, CETPs and other infrastructure. He proposed region wise relocation so industries in each direction of Hyderabad can move to nearby locations just beyond the ORR, minimising disruption to management, workers and supply chains.

FETSIA also sought clarification on the inclusion of Medchal and Pashamylaram Industrial Estates, noting that they lie outside the ORR and appears inconsistent with the stated scope of the HILT policy. The federation has urged the government to keep the draft notification in abeyance, undertake a detailed economic impact assessment and ensure that no operational industrial unit faces coercive action until stakeholders' concerns are comprehensively addressed.