Family silver sale to fight virus
If the Karnataka government is not calling it a distress sale, it could be because it is gracious or it does not want to embarrass the friendly government at the Centre.
The BJP-run government in the southern state has decided to sell land to mobilise resources to fund its immediate needs in the wake of the Covid-19 outbreak. The decision was taken at a meeting chaired by chief minister B.S. Yediyurappa on Monday night.
Sources said the immediate need for Rs 15,000 crore would be met by selling 12,000 residential plots in the state capital. When the Narendra Modi government released Rs 11,096 crore under the State Disaster Risk Management Fund last month to combat the virus, Karnataka was given only Rs 396 crore.
The well-intentioned land auction may look like the age-old sale of family silver, the Karnataka government would not say.
Instead, it has come up with an equanimous reasoning that the Modi government will hope will be adopted by other states, especially those ruled by the Opposition that has pointed out that the chief ministers’ demand for money has so far elicited no response from the Prime Minister.
“We understand the Centre has to take care of the whole country. So we are trying to mobilise some money internally,” a Karnataka government official said, adopting a sympathetic stand while explaining the reason behind the auction.
“If we manage to raise Rs 15,000 crore, we can handle the situation for some time. Hopefully, the Centre would give some more aid for our Covid-19 response,” the official added.
The Bangalore Development Authority, the custodian of the 12,000 housing plots, usually distributes land to applicants from the state and auctions off residential properties at least once a year. This is, perhaps, the first time that the government is planning to mobilise funds for an emergency situation by auctioning off land, sources said.
The low value of real estate now could play a spoiler. “Dipping land value is a concern. But there is some hope as demand would be higher when prices are low,” said another official.
The auction decision comes at a time the pandemic has exacerbated the state’s financial crisis since the 2019 floods left thousands of people homeless and village roads in ruins.