The urban development ministry notified the Land Pooling Policy (LPP) for the Capital a year ago, but it is yet to be cleared by the AAP-led Delhi government. In the meantime, conservative estimates indicate that more than Rs 1,000 crore have been collected by many entities who have illegally pre-launched housing projects under the land pooling policy targeted at unsuspecting buyers without any formal sanctions and approvals.
The LPP, when approved, is expected to bring in credible and internationally-acclaimed developers who will create a supply of more than two million dwelling units in Delhi, in all price categories, with almost a third of it in the affordable category.
Though pre-launches are not legal, Satish Kumar Aggarwal of the Federation of Housing Societies and Developers in Delhi claims that investments worth Rs 1,000 crore have already been pumped in by individuals or through approximately 40 housing societies in zones P1 and P2, L and N demarcated as part of LPP. “People have paid at least Rs 12 lakh for the land,” he says. His federation has written several letters to the Delhi government appealing that it clear LPP but has yet to get a response.
When contacted, an AAP spokesperson said that the Delhi government did not agree with the parameters laid down in the land pooling policy. “There are a number of objections, the primary objection relates to the fact that it will not help the people of Delhi but the builders’ lobby,” the spokesperson said.
Realty experts say that the land pooling policy has two main impediments. One – the Delhi government has to declare 89 villages as urban villages and two – 95 villages have to be declared as development areas. They say if the land pooling policy is not notified soon, the number of unauthorised colonies will rise from 2,000 to 3,000.
Yet another challenge is the amendment of the Delhi Land Reforms Act 1954 wherein Section 33 prohibits fragmentation of land among land holders and Section 81 which does not permit non-agricultural use of agricultural land for housing or warehousing.
“Around five lakh people migrate to Delhi every year and there is a requirement for around 90,000 dwelling units to be created year on year. DDA till date has created barely four lakh housing units over the last 35 years.It is time that the agencies concerned like DDA, Delhi government, revenue department, MCD work in tandem and ensure operationalisation of the Land Pooling policy,” says Ramesh Menon of Certes Realty. “The state has a lot to gain by adding almost a third to its GDP by incremental economic activity in Delhi.”
Amendments in land policies are necessary as these will result in the construction of around five lakh homes and bring in revenues of around Rs 50,000 crore to the Delhi government. On August 4, 2015, the circle rates for the land pooling areas were notified and increased from around Rs 2 crore per acre to Rs 3.5 crore per acre. Experts say they can’t understand why, if the government has collected revenues on the basis of the new circle rates, is it not giving the green signal to LPP.
Leaving the policy unattended would leave room open for price escalation. Prices are bound to go up if the policy is not notified soon and the increased prices will regulate the supply. Right now the potential to construct around 25 lakh homes exists in the land pooling areas and that too at affordable price points of Rs 35 lakh onwards, which bring unit costs to around Rs 3,000 per sq ft . That might not be possible once the unit cost escalates to around Rs 10,000 per sq ft, says an expert.
A buyers’ lobby claims that as of now around Rs 1,000 crore have been collected on land pooling promises. The base maps are ready and the government merely has to verify the records from the revenue department.
Menon is of the view that the Delhi government has to address some key operational issues in tandem with DDA and other implementing agencies. The Delhi Land Reforms Act 1954 has many clauses that impede the land pooling policy, and the same have to either be annulled or amended to facilitate planned unbanisation of Delhi.
What one needs to understand here is that the 1954 Land Reforms Act came into being when the country was not food sufficient. Therefore, a law was made to ensure land would not be fragmented. “By now we have had a green revolution and now we are talking about urbanisation. In the context of urbanisation, these laws are archaic and some of them must be done away with altogether,” says Menon.
It may be noted that the Delhi government has already sought suggestions from the public on the proposed amendments to the impeding section of the DLR Act 1954 through full page ads in leading newspapers, and the same should be submitted by July 10, 2016.
LPP will also take care of Delhi’s vacancy problem, which is about 25% of all housing units available in the Capital. On an average four dwelling units exist in any established part of Delhi and most are empty because majority of the population cannot afford them. LPP will change that because of the affordable housing costs. and, therefore, cheaper rentals.
“This is also Delhi’s chance of getting legal developed land. Come to think of out, any house
priced around Rs 25 lakh within the Capital is bound to be illegal, perhaps it will be in all probability be located in an unathorised colony or be an unathorised floor,” Menon says.
High circle rates are also an impediment. These were increased in land pooling areas last August. Experts say that in some areas the land prices, at around Rs 1.25 crore are below the circle rates and that needs to be reviewed.
“The confusion over the circle rates of Rs 3 crore per acre discourages investors currently from investing in land. Even revenue officials aren’t clear as two separate circulars have been issued.Investors seek clarity in pricing so that they could derive their ROI,” says Menon, adding this is also hindering the spirit of participative development.
Another bottleneck to the land pooling policy is the non-preparedness of the revenue department. While DDA has made the policy and claims to have written as many as 24 letters to the Delhi government, operationalising the policy needs to be taken up by the revenue department.
Private sector expertise in IT integration and implementation has to be sought by DDA.The gross urbanisable area under land pooling is approximately 56,000 hectares and it’s not possible for DDA and revenue department to undertake such a massive exercise. Geosat images, sectoral plans under the Master Plan 2021 by DDA, revenue maps etc have all to be integrated under a single IT platform.