The HILTP Debate: Balancing Urban Evolution With Statutory Compliance

Overview of HILTP

While the HILTP identifies 22 industrial parks, including IDA Nacharam, IP Kukatpally, and IP Balanagar, its applicability appears to be broader. The policy extends to all industrial estates, parks, and Auto Nagars under the jurisdiction of the Telangana State Industrial Infrastructure Corporation and the Industrial Area Local Authority, as well as standalone industrial units situated within or near the Outer Ring Road region.

Under this framework, land originally restricted to industrial use can be converted into 'multi-use' zones to accommodate a wide spectrum of activities including (a) residential projects such as apartments and integrated townships, (b) commercial spaces including offices, retail centres, and hotels, (c) institutional or recreational facilities like schools, hospitals, and cultural centres and (d) IT/ITES technology parks and campuses aligned with the Government's GRID Policy. To facilitate this conversion, HILTP mandates a one-time 'Development Impact Fee' calculated as a percentage of the Sub-Registrar Office (“SRO”) land value. The applicable rate is determined by the width of the abutting road, whereby plots on abutting roads narrower than 80 feet incur a fee of 30% of the SRO value, and plots on abutting roads of 80 feet or wider are charged at 50% of the SRO value.

Crucially, the policy includes a "sunset clause", requiring applications to be submitted within a strict six month window from the date of official issuance of the policy.

The Political Friction

The policy has been the subject of intense debate in the Telangana Assembly, with the opposition labelling the policy a "blueprint for a 5 lakh crore land scam". The crux of the political allegation rests on the "Development Impact Fee" and the discrepancy between the SRO values and actual market rates.

The Government, however, maintains that the policy is a transparent and voluntary framework designed to unlock stagnant assets and generate over ₹10,000 crore for the state exchequer.

Judicial Scrutiny: Public Interest and the Environment

While the policy aims to repurpose these unviable brownfields into productive urban spaces and facilitate the relocation of industries to specialised parks, it has become the subject of judicial scrutiny. The Telangana High Court has admitted public interest litigations including those filed by professor, K. Purushotham Reddy^[1] and politician, K.A. Paul, questioning the validity of HILTP. The petitions raise the question of whether a government order can effectively circumvent the statutory procedure prescribed for modification of a master plan under the Hyderabad Metropolitan Development Authority Act, 2008 (“HMDA Act”).

The petitioners have further cautioned that the HILTP lacks a clear framework for environmental remediation. They argue that permitting residential development on 'brownfield' sites, historically contaminated by heavy industrial activity, without a court-monitored environmental impact assessment could lead to a public health crisis.

The Statutory Framework: Can a G.O. Rewrite the Master Plan?

Under Sections 11, 13, 14, 15, 18 and 19 of the HMDA Act, the Metropolitan Development Plan (including land use zoning framework) is prepared, notified for objections, sanctioned by the Government and brought into force by Gazette notification, and thereafter all development must conform to that plan. It therefore operates as a statutory instrument governing land use within the metropolitan region. This process requires the Metropolitan Development Authority to notify the draft plan, invite objections and suggestions from the public, and consider them before submitting the plan (or any modification thereof) to the Government for sanction.

In Chairman, Indore Vikas Pradhikaran v. Pure Industrial Coke & Chemicals Ltd.^[2], the Supreme Court emphasised that town planning acts are intended to regulate property rights in the public interest. The Supreme Court held that a planning authority cannot exercise power arbitrarily or bypass statutory procedures, particularly where such actions affect proprietary rights, as the right to property under Article 300A of the Constitution is a constitutional right that cannot be abridged without authority of law.

This principle was further reinstated in R.K. Mittal v. State of Uttar Pradesh^[3], wherein the Court observed the following:

“Even when a Master Plan is to be amended, the entire prescribed procedure must be followed. The power to amend should be exercised only in consonance with the settled norms without going beyond the original power of the Development Authority to make such Plan in accordance with the provisions of the Act”.

The statutory procedure thus serves as the essential framework within which the planning authority must operate.

Regulatory Inconsistency and the "Relocation Clause"

A significant hurdle for HILTP is its apparent conflict with G.O. Ms. No. 20 dated March 1, 2013, which mandated the relocation of polluting industries beyond the Outer Ring Road^[4]. Crucially, the 2013 order stipulated that land use conversion within existing industrial areas would not be permitted until all industrial units were fully relocated. While the HILTP now proposes the conversion of these lands for alternative uses, the earlier framework effectively conditions such conversion on the prior vacation of the premises by the industrial units operating therein.

In recent hearings of the PILs, the Advocate General representing the Government reportedly submitted to the High Court of Telangana that land use conversion will not be permitted until the relocation of polluting units is complete.

This position introduces uncertainty regarding the implementation of the HILTP. If this stance is maintained, land use conversion may be sanctioned at a policy level but remain difficult to implement while operational units continue to occupy the land. This creates a regulatory gap where a developer or landowner may receive formal approval for a "multi-use" project under HILTP, they may be unable to operationalize that approval so long as nearby industrial units remain in place.

The Way Forward

The successful implementation of HILTP depends on reconciling ambitious executive policy with the procedural requirements of the HMDA Act. As the High Court continues its review, the government faces the challenge of proving that HILTP is a strategic urban evolution, rather than a legal shortcut.

For the real estate and industrial sectors, the policy represents a high-stakes transition. Its success remains contingent upon the prior relocation of industrial units as mandated in 2013 and the development of adequate supporting infrastructure both in the new industrial parks to which such units are proposed to be relocated and in the existing industrial areas that are proposed to be redeveloped for multi-use purposes.

References

[1] WP(PIL) No. 72 of 2025

[2] AIR (2007) SC 705

[3] AIR (2012) SC 389

[4] G.O. Ms. No: 20 Dated March 1, 2013, Industries and Commerce (INF) Department Available at: https://tgpcb.cgg.gov.in/Uploads/Industry%20Guide/GO%20Ms.%20No%2020.pdf

Author: Sagarika Reddy, Principal Associate - TLH, Advocates & Solicitors sagarika.r@tlh.law. Views are personal