The Delhi government has decided to increase compensation for land acquisition by three times, which, real estate experts said, would make flats in future projects costlier.
A panel of three ministers on Thursday decided that the new rate for land acquisition would be Rs 75 lakh per acre as the earlier rate of Rs 25 lakh was considered too low against the market rate.
“We will send our recommendation on the new rate to the cabinet. The date from which the new rates would be applicable would be decided by the cabinet,” said PWD and Urban Development Minister Raj Kumar Chauhan. Finance Minister A.K. Walia and Industry Minister Mangat Ram Singhal are the other two members of the panel.
A senior official of Delhi Development Authority (DDA) said the land cost component is 25 per cent of the cost of a flat. “If the land acquisition rate increases three fold, this would become 50 per cent,” he said. The official said a DDA flat in Dwarka costs Rs 30 lakh. It will go up to at least Rs 50 lakh.
Private builders charge at least 20 per cent more than the government agencies for similar property, he added.
“Vacant land is primarily available in north and north-west Delhi which would be the new areas of development as per the Master Plan. If the rate is increased three times, it would have a cascading effect on the end product which is the apartment,” said Ramesh Gupta of Ideal Property, a private firm.