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IIT experts to fix EDC formula for state’s key cities

Till now, the department has been using an index-based system to calculate the EDC. This system was applicable till March this year.

gurgaon Updated: May 30, 2019 01:31 IST
Abhishek Behl
Abhishek Behl
Gurugram
IIT experts,EDC,EDC formula
The department of town and country planning (DTCP) has given the task of preparing an infrastructure development plan for Gurugram and other major cities in Haryana to experts from IIT-Delhi and IIT-Roorkee. (Arvind Yadav/HT photo)

The department of town and country planning (DTCP) has given the task of preparing an infrastructure development plan for Gurugram and other major cities in Haryana to experts from IIT-Delhi and IIT-Roorkee. Based on their report, a formula will be devised for calculating the external development charge (EDC) that are sought from private developers for creating basic infrastructure, including roads, power and water supply, and sewage.

Till now, the department has been using an index-based system to calculate the EDC. This system was applicable till March this year.

DTCP director MK Pandurang, on Tuesday, said an exercise would be carried out by IIT experts to prepare city-specific development plans on the basis of which the expected cost of infrastructure development will be worked out.

“The reason for revising the EDC is that the cost of land and development works has appreciated significantly. We want to calculate a rate that is in line with or close to the market cost,” he said, adding that this exercise had become necessary as EDC rate is revised after every three years.

The external development charge is collected from developers to carry out development works, including building roads, setting up electrical infrastructure, laying water and sewerage lines, building drains and related infrastructure. The charges are calculated by the department based on the area being developed by the builder.

Presently, the DTCP is using an index-based formula to calculate the EDC for different cities in Haryana by classifying them as high-, medium- and low-potential towns. This formula has been applicable since 2016. To calculate this index, the EDC determined for Gurgaon-Manesar Urban Complex was taken as base and multiplied by indexation factors.

Commenting on how a revision in the EDC calculation mechanism may affect the buyer, experts said that given the rise in cost of construction inputs, it was most likely that the EDC rates would increase and this may have an amplifying impact on the price of properties that will be developed in the coming years.

“The EDC is already a big cost for developers. If this rate is hiked further it may lead to an escalation of costs and subsequently higher price for buyers,” real estate consultant Sanjay Sharma said.

To prepare the development plans of various cities across the state, their respective DTCP officials will work closely with experts from IITs, said District town planner RS Bhath. “Gurugram is a key city for the department (of town and country planning) and all efforts would be made to simplify the EDC calculation method and rationalise it,” he said.

As per the available government data, Gurugram alone has generated ₹6,700 crore from EDC in the last five years and it is 70% of the EDC-generated revenue in the entire state.

An RTI, however, had revealed last year over ₹10,000 crore was pending as EDC  from developers in Gurugram alone.

First Published: May 30, 2019 01:31 IST