It is easy to dismiss Maharashtra’s repeal of the 30-year-old Urban Land Ceiling (Regulation) Act (Ulcra) as a case of too little, too late. Admittedly, Ulcra’s repeal is not going to dramatically add to developable land stock in Mumbai. Nor will it bring about any short-term reduction in skyrocketing real estate prices. As for creating affordable housing for the poor and the middle-class, the purpose for which Ulcra was originally enacted in 1976, the Act’s demise is unlikely to bring about any perceptible change for the better. However, there are several positives, which may, in the long-run, transcend the short-term negatives pointed out by sceptics. Perhaps the biggest benefit is the creation of a workable model to tackle the difficult tasks that remain unfinished on the reforms agenda.
What decades of political wrangling and pressure by civic activists and the media could not bring about has been achieved by the Centre’s carrot and stick policy on Ulcra. If Maharashtra, or any of the laggard states yet to get rid of the antiquated Act, managed to do so by March 2008, they would receive funding from the Centre under the Jawaharlal Nehru National Urban Renewal Mission. If the states fail to do so, they would get nothing. This is an admirably simple and efficient way to get things done. That fiscal incentives, provided they are thought-out and substantial, really do work, is proved by Maharashtra’s rapid action in the face of a looming deadline. Mumbai alone will now get Rs 11,000 crore to revamp its overstrained civic infrastructure. The state as a whole will get over Rs 17,000 crore, and provide a badly-needed boost to civic development in other booming but chaotic cities like Pune, Nagpur and Nasik. The political opposition to the move has exposed the vested interests which have been the bane of development and good governance in India.
The claim of ‘protecting’ the interests of the poor rings hollow in the face of the reality of the hellish slums in which India’s urban poor are forced to live. The creation of a more transparent and uniform policy, and reducing the role of government clearances will ultimately benefit the real stakeholders: the citizens.