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With Rs. 23k-cr builders’ dues pending, Gurgaon infra suffers

A series of attempts by the Haryana government to recover Rs.23,000 crore dues pending since 1981 from private developers has drawn a blank.

gurgaon Updated: Aug 01, 2016 01:52 IST
Sanjeev K Ahuja
external development charges
A jam on the waterlogged Delhi-Gurgaon Expressway. The rain on Thursday exposed Gurgaon’s lack of preparedness for the monsoon.(Parveen Kumar/HT File Photo)

A series of attempts of the Haryana government to recover Rs.23,000 crore dues pending since 1981 from private developers has drawn a blank, leaving the state of civic infrastructure in Gurgaon in a dilapidated condition for the want of funds.

The total external and internal development charges (EDC/IDC) due from builders is Rs.35,000 crore, of which Rs.12,000 crore has been recovered.

The government’s latest attempt to recover the amount through a ‘relief policy’ that allows developers to pay outstanding charges in four half-yearly instalments has failed to yield results.

It is this failure of the state government that has forced it to turn to lending institutions, seeking overdraft facility of Rs.1,000 crore for its cash-strapped development agency Haryana Urban Development Authority (Huda). The development authority has to complete Gurgaon’s pending infrastructure projects such as Badshahpur drain that triggered waterlogging and jams after the downpour on Thursday evening.

The government is still to collect Rs.13,000 crore and Rs.10,000 crore in the form of EDC/IDC and VAT from developers.

With the outstanding amount mounting, Haryana’s BJP government led by Manohar Lal Khattar has almost slapped an embargo on issuance of new licences to private developers. As against the average annual issuance of 100 licences by the previous Congress government led by Bhupinder Singh Hooda, the BJP government has issued only 21 licences since November 2015.

Also, the ‘relief policy’ for the recovery of outstanding amount has not produced the desired results as the realty market is in a slump. “This policy was announced recently and is new, and will take time to yield results,” additional chief secretary, Town & Country planning, P Raghvendra Rao, said.

The state government also made it mandatory for the defaulting developers to mortgage a percentage of their saleable property with it. The mortgaged land could be sold in case developers default.

However, this strategy proved futile too. “Since majority of developers do not have land with clear titles for mortgage purpose, the policy did not work. The state government did get finances as it has slapped embargo on issuance of new licences and hence, has not received money in the form of licence fee, EDC, IDC for new projects,” Parveen Jain, president of National Real Estate Developers Council, said.

The town and country planning department has issued only seven licences to developers this year and five of these are only for affordable housing projects.

Sources said majority of the EDC collected from Gurgaon was diverted to other Haryana towns and spent there. Supporting this claim, former Huda administrator SP Gupta, who served in Gurgaon between 2005 and 2007, said, about Rs.1,500 crore generated from various sources such as EDC, IDC, and auctioning properties from Gurgaon was diverted to towns such as Rohtak and Jhajjar. “To generate finances for the Mehrauli-HUDA City Centre yellow line, we had organised an auction of Rs.900 in a single attempt by auctioning various properties in Gurgaon,” Gupta said.

Meanwhile, Rajeev Talwar, CEO of DLF Limited — one of the early entrants in Gurgaon realty market — with Ansal and Unitech in early 1980s said that the company has paid all its dues in the form of EDCs and IDCs. “We are rather contributing towards the infrastructure development of the city. For example, we have contributed Rs.325 crore in the Rs.650 crore 16-lane expressway between Gurgaon Expressway and Sector 56 roundabout,” he said.