Surya Desaraju

They were eagerly waiting for news from the Centre on the exemption of 'capital gains tax' on the first sale of their lands given away under the land pooling scheme for building Andhra Pradesh's new capital city Amaravati.
Instead, Prime Minister Narendra Modi, like the proverbial bolt from the blue, dropped a bomb on the farmers of the state's capital region by demonetising currency notes of Rs 500 and Rs 1000 denominations.
Now scores of farmers, who had literally been building castles in the air for the last couple of years seeing their land prices surge to astronomical heights, suddenly feel doomed.

In all, farmers spread over 29 villages in Amaravati region parted with about 33,400 acres of their land for the new capital.
Most of the farmers, however, sold away their land after the price per acre shot up to Rs 2 crore. Between December 9, 2014--when the land pooling scheme was announced --and March 5, 2016, as many as 9304 transactions were registered in the capital wherein 6,573 acres of land was sold.
Of this total, 100 persons purchased 365.66 acres, with 7.5 acres being the single largest transaction and two acres the lowest.

From a minimum of Rs one crore, the land price ranged up to a maximum of Rs 2.4 crore an acre. But, the book value (government-fixed registration value) remained somewhere between Rs 8 lakh and Rs 12 lakh per acre and all transactions were based on this only.

Thus, in all these transactions hundreds of crores of rupees, if not a few thousand crores, remained "unaccounted for", in official terms, and "black money" in general parlance.
Land transactions came to a halt after March for a variety of reasons, including lack of progress on capital construction, but began again on a low scale in the last one or two months after the temporary Secretariat started functioning at Velagapudi and government launching road development works.
Some of the farmers who sold their land re-built their houses, purchased cars or expensive motor cycles but it was also retained the form of cash either stashed at home or in lockers.

There was no other avenue for farmers to preserve their money as it was unaccounted for and as such were bundled and kept at home in many a case.
Ironically, they can't even show it as income from agriculture as all cropping activity in the capital region was stalled in the last three seasons after the lands were given away to the government.
"The Primary Agricultural Cooperative Societies used to be liberal in accepting cash deposits in lockers without any limit. But, somehow, in the last one month even the PACS stopped accepting large cash deposits. So, many people have that cash at home," a villager in Mandadam claimed.

Ironically, even the money in lockers would be of no use now since high denomination notes have been scrapped. A tour in some of the villages in the capital region like Mandadam, Uddandarayunipalem revealed gloomy faces today with the main topic of discussion among villagers being the abolition of high denomination notes.
Though they were discussing the introduction of new Rs 500 and Rs 2000 notes, and also the Rs 1000 note, there was little cheer as the existing notes--which many of them were still holding--had no value.
During his visit here on October 28, Finance Minister had Jaitley promised to "sympathetically consider" the request for waiver of capital gains tax and take an "early decision". But now it is believed even if he grants it now, it will be of little solace to the farmers. PTI DBV.