Land prices zoom around AP’s new capital as farmers turn to real estate

Clad in worn-out blue trousers and a white shirt, 25-year-old B Saikumar waits patiently on the road near the agricultural fields of Krishnayapalem village, some 25 km from Vijayawada.

His wait is for prospective buyers of land. Though a farmer himself with two acres of land, Saikumar has transformed himself into a real estate agent, thanks to the spurt in land value after the Vijayawada-Guntur region was chosen by the Andhra Pradesh government to build a new capital.

Drive through the villages in the region and you will find real-estate signboards sprouting everywhere — at least 10 every km.

And it’s not without reason. From about ₹3 lakh four years ago, the price per acre of farm land has shot up to ₹1.60 crore now, going by a deal closed on Friday.

“Many are willing to make a quick buck by selling the land now rather than waiting for the package being offered by the government as part of land pooling,” says Kiran of Sai Ganesh Real Estates in Penumaka Village of Mangalagiri district.

The buyers can in turn surrender land to the government and receive all promised benefits. Land pooling is a scheme introduced by the government to make farmers voluntarily surrender land for the capital, which is expected to come up on about 33,000 acres.

Each farmer will get ₹30,000 to ₹50,000 per acre per year for 10 years. This is in addition to two plots of 300 sq yards and 1,000 sq yards for commercial and residential purposes, respectively. The compensation varies slightly depending on the location and the category of land.

Though 31,000 acres have already been acquired under land pooling, the scheme has become controversial on many grounds such as ‘forceful’ acquisition, delayed timelines, low compensation and allegations of high handedness by revenue officials. These are driving some farmers to sell land while corporates and long-term investors are ready to invest.

The immediate impact, however, will be on agricultural production. A majority of farm holdings in the capital region are small plots ranging from one to two acres and farmers mainly cultivate cotton, maize and vegetables.

“We regularly supply vegetables to Vijayawada and Guntur which will not happen in future,” says S Satyanarayana of Kuragallu village who grows onions.

It remains to be seen whether the new capital will address all these issues and if the boom in land value will sustain.

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