In recent budget of Rajasthan government which is the first budget by finance minister of Rajasthan; honorable Diya Kamari Ji, it is been declared that the warehouse shall be an Industry now.
This was the long awaited demand of industrial lobby of Jaipur Rajasthan; that warehousing activity should come in criteria of industrial activities; earlier it was considered as commercial activity.
Some reasons why this lobby wants it:
- In most industrial areas of Jaipur like Vishwakarma industrial area, Sitapura industrial area; 22 Godaam, Mahindra World City, Bagru Industrial area and so on are nearby Jaipur city.
All this industrial areas are regulated by RIICO; Due to non availability of enough supply of warehouses infrastructure; from prolonged period, industrialists started making warehouses in these areas, which was not allowed by RIICO and govt. bodies, but storage of goods was also a big challenge in front of these industrialists. Hence RIICO and Government of Rajasthan remained flexible towards it, so that they can store their finished goods and take benefit of cost effectiveness.
- But in current scenario as the requirement of warehouses for lease-rent in jaipur grown; it has became a good source of rental income for those industrialists, RICCO allotted land to them for developing the industries on cheap rates but somehow it has become a source of rental income by renting out their buildings and industrial shades for warehousing. Before the budget all such have got the notice from RIICO to vacant the premises immediately which was being used for warehousing by FMCG, E-Commerce, Consumer Durables, Pharmaceutics etc
Advantages:
Warehousing in industrial areas would be encouraged by this decision and the biggest advantage shall be fast supply due to good logistics network and better connectivity within the city and outer side of the same.
Companies who need big warehouses have to complete some compliance for establishing the same among them Land Use of Property was a big factor faced by these companies; now it would not be a factor to affect.
It will increase employment in industrial areas for both skilled and non skilled workers.
Disadvantages:
Land cost of RIICO would be increased which will not be cost effective for new industrialists.
It is already been seen over the 3 years the land cost in industrial area have significantly increased due to rental activities, as many IT companies and E-Com companies has accommodated in such areas; due to cheap rental and better connectivity of transport and other amenities therefore its challenging for a new industrialist to set up a industry in such areas.
Rental of warehouses especially in RIICO areas have been increased by 100% from present rental level; which would not be cost effective for such companies.
Conclusion:
Warehousing infrastructure in Jaipur is still struggling, due to lack of such land around the city and conversion of its land use; although we have seen a great escalation in YoY demand of warehouses within 40 km radius of Jaipur; as per a Commercial-Industrial Real Estate Consultancy firm Anita Associates in Jaipur,
The recent infrastructure development of warehouses in Mahindra SEZ has trying to meet out this demand in a organized way but if we talk about the future; the market of warehouse would be facing crunch of supply as told by.
