Hyderabad: The expansion of the Greater Hyderabad Municipal Corporation has brought land revenue laws under scrutiny. The Telangana government recently merged 27 urban local bodies around Hyderabad into the GHMC. This move has raised concerns over conversion taxes and possible revenue loss.
The state legislature passed a bill to expand GHMC limits, and the Governor later gave assent. The expansion includes seven municipal corporations and 20 municipalities located on both sides of the Outer Ring Road.
The merged areas cover high-value real estate zones such as Badangpet, Bandlaguda Jagir, Meerpet, Boduppal, Peerzadiguda, Jawaharnagar and Nizampet. Municipalities including Manikonda, Narsingi, Shamshabad, Adibatla and Ameenpur also fall under the new limits.
As a result, large stretches of agricultural land now come under GHMC jurisdiction. Landowners are likely to convert this land for non-agricultural use. This shift directly affects the conversion tax structure and state revenue.
GHMC expansion and conversion tax concerns
Under existing revenue laws, landowners must convert agricultural land before using it for non-agricultural purposes. They must pay a conversion tax for this change.
Earlier, authorities collected an annual non-agricultural land tax under the NALA Act, 1963. The government later replaced it with the NALA Act, 2006, which introduced a one-time conversion tax. The tax initially stood at 9 percent of the basic land value. The government later reduced it to 3 percent.
After launching the Dharani system, the government issued orders fixing the conversion tax at 3 percent for lands outside GHMC limits. It later revised the rates and imposed higher percentages in non-GHMC areas.
Now, due to the GHMC expansion, agricultural land in the newly merged 27 urban local bodies will attract only a 3 percent conversion tax. Earlier, the same land attracted 5 to 6 percent. Officials warn that this change could lead to a significant loss to the state exchequer.
Audit and legal concerns
Revenue officials and land experts have called for a comprehensive audit in these high-value zones. They want authorities to verify whether officials collected the correct conversion tax.
Experts have also raised concerns about the role of tahsildars, who now issue conversion orders online. They questioned whether officials followed the law strictly while approving conversions.
In addition, the Bhu Bharati Act excludes agricultural land located in notified urban areas from its scope. The government has not yet issued such notifications in most regions. However, the GHMC expansion increases the likelihood of notifications in the merged areas.
If that happens, farmers in these regions may lose the protections offered under the Act. This could trigger legal disputes and administrative complications.
Experts have urged the Telangana government to issue clear notifications under Section 3(7) of the Bhu Bharati Act. They have also called for specific orders on conversion tax rates within the expanded GHMC limits.
According to them, clarity will help prevent revenue leakage, safeguard landowners’ rights, and ensure uniform enforcement of land laws.