The Industries department has sanctioned changes to the Unified Industrial Land/Building (Allotment & Disposal) Regulations for KINFRA & KSIDC, 2024, enabling optimal utilisation of industrial land, flexibility in permitted industrial activities, facilitation of subleasing and creation of common infrastructure facilities in industrial parks and industrial estates.

The unified regulations were framed in 2024 for regulating allotment and disposal of land or buildings owned by the land allotment agencies Kerala Industrial Infrastructure Development Corporation (KINFRA) and Kerala State Industrial Development Corporation Limited (KSIDC).

A high-level committee chaired by the Union Cabinet Secretary reviewed the land allotment policies of various States and recommended that States devise enabling provisions for optimisation of land use in existing and upcoming industrial clusters. The changes to the regulations have been made based on these recommendations.

Though the existing land allotment policy permits subleasing of built-up space in specified cases, such as warehouse facilities in logistics and warehousing activities, there is no general provision for subleasing beyond such specified cases. In order to facilitate optimal utilisation of industrial assets while protecting the industrial purpose for which land is allotted and preventing industrial land or buildings from being used primarily as a real-estate or rental asset, subleasing will now be permitted subject to certain conditions. The maximum period of any sublease will be 10 years. Renewal of the sublease will require fresh prior written approval of the land allotment agency.

Conditions

In the case of subleasing of land or buildings, the original allottee should have continuously operated its approved industrial activity for a minimum period of three years before becoming eligible to seek permission for subleasing. The original allottee holding minimum two acres of allotted land will be permitted to sublease a portion of the allotted land, where the principal industrial unit continues its approved activity and the proposed sublease is intended to accommodate component manufacturers, ancillary units, vendors or other units forming part of an integrated manufacturing cluster.

The sublease should not be used as a means of discontinuing the principal activity merely for the purpose of deriving rental income or converting the allotted premises into a commercial real-estate or rental asset, but for ensuring optimum utilisation of industrial plot and promoting further investments.

The land allotment agency will adopt public-private partnership (PPP) models for the design, financing, construction, operation and maintenance of common infrastructure facilities within an industrial park, including effluent treatment plants, fire hydrants and fire-fighting systems, internal roads, water supply, street lighting and worker welfare facilities.