The Telangana government’s decision to convert a vast stretch of under-utilised industrial estates in and around Hyderabad into high-value multi-use commercial zones has triggered a political row. While the opposition Bharat Rashtra Samithi (BRS) has dubbed it a ‘mega scam in the making’, the ruling Congress has framed the move as a pathbreaking initiative to transform Hyderabad into a global metropolis.
The government has approved the Hyderabad Industrial Lands Transformation Policy (HILTP)-2025, paving the way for large-scale conversion of ageing industrial estates located within and near the Outer Ring Road (ORR) into high-value, multi-use zones.
The policy, cleared through a Government Order issued recently, aims to unlock thousands of acres of industrial land that have become economically unviable, underutilised, or incompatible with the city’s rapidly expanding urban core.
The move is expected to significantly alter land-use patterns across some of Hyderabad’s oldest industrial hubs — Nacharam, Mallapur, Cherlapally, Moula Ali, Balanagar, Jeedimetla, Kukatpally, Sanathnagar, Gandhinagar, Ramachandrapuram, Patancheru, Kattedan and several others — many of which were established more than five decades ago.
In its policy note, the government said Hyderabad’s transformation into a global metropolis has brought with it new socio-economic and environmental challenges. Industrial estates that were once located on the city’s periphery have now been absorbed into densely populated residential and commercial neighbourhoods.
“Rapid urbanisation has enveloped the industrial estates and parks established 50–60 years ago, making them integral to the city’s urban core,” the order said.
This shift, combined with outdated technology, disrupted supply chains and rising compliance costs, has rendered many industrial units unviable. Widespread closures have left significant land parcels underutilised. The government observed that the resultant mismatch — old industrial clusters now sitting inside busy urban zones — is creating ecological stress and hampering integrated urban planning.
The order lists 22 industrial estates and standalone industrial land parcels, amounting to 9,292.53 acres, of which 4,740 acres are plotted and eligible for conversion under the policy.
The government has also listed 2,000 acres of standalone industrial lands as eligible for conversion.
The order identifies two core issues: One, economic unviability of industrial units due to outdated technology, market disruptions and growing costs of operating inside dense urban pockets. Two, environmental and planning challenges caused by large industrial clusters situated inside the city’s urban fabric.
The HILTP is therefore framed as the “logical and strategic next step” to repurpose these vast land parcels into modern, productive and integrated urban spaces.
Under the new policy, land originally classified as “industrial” can now be formally converted into “Multi-Use Zones.” The permitted uses include residential apartments, integrated townships, commercial office spaces, retail and hotels, schools, colleges, hospitals, research centres, parks, sports complexes, and cultural centres.
The government argues that this will facilitate better land utilisation, create high-value urban districts and generate significant revenue while supporting sustainable urban planning.
A key feature of the policy is the introduction of a one-time Development Impact Fee (DIF), calculated as a percentage of Sub-Registrar Office (SRO) land values. The policy is expected to unlock thousands of crores in non-tax revenue.
The order said that the HILTP offers significant planning, economic and sustainability advantages. With nearly 10,000 acres identified, experts say this could become one of the largest urban land-transformation exercises undertaken by any Indian state.
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