Rs33,000 cr: That’s what Nagpur’s land boom is worth

NAGPUR: It was a temptation that 65-year-old Daulat Moon could not resist. The deal was too big for him to reject: Rs40 lakh per acre of land or a little less than Rs100 per sq feet. “I stamped it.”

The six-acre farmer, Moon, fixed some of his huge sum and bought five acres in a village, 50 km away, at Rs10 lakh an acre. “Once a farmer, always a farmer.”

He’s the latest in the burgeoning list of farmers who have sold their farm land in Mondha village, barely 4 km from Hingna town and 20 km from Nagpur. The real estate sharks gobbling up the lands had been after him for six months.

Mondha has sold 75% of its land to developers and the city’s noveau rich in two years.
Stretches of what were once cotton and soybean fields or orange orchards now bear hoardings of buy-in-instalment plots. The price per plot is a staggering Rs500 per square feet. That’s in multiple of what Moon got from the developer.

Land rate has soared to a staggering Rs1-5 crore per acre on the outskirts of the city. Driven by the hype created by the proposed Multi-Modal International Hub and Airport at Nagpur (MIHAN) project and the adjoining Special Economic Zone (SEZ), villages around here have seen a land rush for some time.

But the scale at which it’s happening is incomprehensible to the locals: Over a hundred villages, like Mondha, within a 50-km radius of Nagpur, have sold their agriculture land. About a million small and big investors have invested in plots or farmland beyond the city limits in the hope that prices will zoom.

What’s more, the realtors estimate at least 200,000 individuals to be engaged in land brokering in Nagpur, and as many in the rural parts.

The district collector’s office estimates that 30,000 hectares (330 crore sq ft) has changed hands from farmers to individuals — many in benami transactions; 10,000 hectares (110 crore sq ft) has been sold in plots to small investors from and outside Nagpur. At a modest Rs300 per square feet, the game is at least worth Rs33,000 crore! It’s little wonder then that the rural police say there has been a spike in land-related crimes.

“This explains the sudden affluence that has come to a few developers and real estate firms and their agents,” says Praful Gudadhe, a civic body member and builder himself. This, he feels, is not sustainable unless manufacturing and industrial units come up in a big way and create massive demand.

But today, prices are too alluring for the farmers to reject, insists Moon’s young neighbour Raju Lomsonge, a part-time land-broker who works with Hingna spinning mill. A couple of years ago, Raju sold his own land and turned broker when he realised the sector had the potential to make him quick bucks.

Raju says the number of registries a day has risen manifold. And a visit to the deputy-registrar’s (land records) office at Hingna, where land deals are notified, bears this out. The middlemen are omnipresent.

What he could not earn all his life from his job at the only-surviving spinning mill here Raju makes in a snap from one land deal.  

There’s a great demand for many like him these days across rural Nagpur — both from buyers and sellers.

Raju doesn’t go beyond the simple arithmetic of commission. “I don’t know if the prices will remain stable, rise or fall in the future. What I know is it’s wiser to sell agricultural land and make money today than to till in losses forever.”

“Today it is Rs50 lakh per acre, I cannot tell you tomorrow’s figure,” says Raju. The 35-year-old reveals that the young and unemployed of his village are all into land brokeraging. “A middleman rakes in 2% commission.”

The sudden inflow of money has also transformed the lifestyle of villagers, particularly those who drive the deals as middlemen.

“Yes, there are a few more cement houses in the village now, consumption of liquor has risen, and so has the number of two-wheelers,” says the sarpanch of Mondha, Arvind Modak. “People buying land here are obviously doing it for commercial reasons. The farmers who get a good price here for their land are buying farmlands in distant villages of Wardha and Yavatmal,” he says.

A farmer from here sells his land to developers and migrates to Wardha but not before taking up land rates there. The wave thus travels further, and further.

But hundreds of farmers sold their lands cheap five years ago or earlier. Today most of them are landless labourers. They suffered huge losses.

Modak says rich traders from other cities have also bought land. “Many businessmen and traders have come from as far away as Mumbai and Delhi.”

The bubble created by the MIHAN and SEZ has had a cascading effect on the land-holding pattern not just in Nagpur, but the entire Vidarbha. And while the ambitious project is yet to take shape, the realtors have already made a life out of it by selling dreams to investors.