Cash-starved and overburdened by the infrastructure needs of cities literally bursting at their seams, the development agencies may finally have a way soon to bankroll their projects.
On the anvil is a law that would enable the development authorities to levy and collect development charges as laid out by the state government and eliminate any scope of manipulation by private builders and developers on this count.
“Till now, development authorities used to decide and fix the rate for development charges to be paid by a builder/developer on their own. Since there were no specific rules or criteria, a whimsical approach was adopted by officials,” said a senior housing department official.
But with the adoption of a clear-cut policy and rules enumerating the procedure and fixing the rate on which such charges are to be levied, the scope of manipulation and misuse would be ruled out, feels the official.
The levying of revised development charges, however, would lead only to a marginal increase in the cost of property and upcoming housing projects, the official added.
Called the Uttar Pradesh Urban Planning and Development (assessment, levy and collection of development fee) Rules 2012, a meeting to obtain the views and suggestions of development authorities before giving final shape to the law would be chaired by the principal secretary, housing, on September 17.
“While levying of development fee has been in vogue since the inception of development authorities, builders and developers would now also have to pay the city development charge that were first mooted in 2007-08 but rarely realised,” the official pointed out.
With the near privatisation of the real estate sector, development authorities in the state have been marginalised and left to play second fiddle to realty giants.
“While private developers are minting money, development authorities have gone bankrupt with little or no land bank of their own to sustain themselves,” said a town planning expert.
It’s a scenario where private players pocket profits and development agencies pick up the tab for meeting the challenges of urbanisation and providing corresponding infrastructure requirements of a city, the expert said.
The new rules are expected to provide a new lease of life to development authorities by replenishing their coffers.
“We have classified development authorities into different categories and proposed a rate on the basis of which development charges would be calculated (see box),” said the housing department official.
These development charges would be revised each year either on the basis of prevailing cost or the schedule of rates prescribed by the central public works department (CPWD).