The Telegraph
Since 1st March, 1999
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Landlock Act vexes builders
- Housing availability, affordability hampered by archaic legislation

Concerned that the state will once again miss the bus of the great Indian housing revolution and its cascading effect on the local economy, organised developers of Calcutta have decided to petition the government to repeal or modify the “impeding” Urban Land Ceiling Regulation Act of 1976.

City Developers’ Forum (CDF), the umbrella body of realtors, will submit a memorandum to the state housing and urban development ministries to this effect, this week.

Under the Act, nobody can hold more than 500 sq m of land (7.5 cottahs) in metro cities and other state capitals, while for ‘B’ and ‘C’ grade cities, the permissible land ceiling is 1,000 sq m and 1,500 sq m, respectively.

“Even though the underlying purpose of the Act was laudable, it was subsequently defeated. Most other states have done away with this archaic legislation, which stands in the way of affordable housing for all, an issue close to the heart of the ruling Left,” says CDF president Jugal Khetawat.

Besides Bengal, the Act is still enforced in Goa and parts of Maharashtra, though the latter has been offering a slew of sops to compensate developers, so that large-scale projects, like those in Navi Mumbai, can flourish. Instead of freeing large chunks of land to alleviate housing shortage, the Land Act has only served to freeze all land, allege builders. These plots are neither acquired/developed by the government, nor made available to private developers, triggering an artificial shortage of land, even as property prices skyrocket.

Now, with easy housing loans on hand, more and more Calcuttans can afford apartments. “But, with the Act still in place here, private builders are prevented from developing big-format townships or delivering a lifestyle product at competitive prices,” says Pradip Kumar Chopra, managing director of the PS Group, a CDF member-company.

The crippling constraints of the Land Act often force Calcutta developers to price themselves out of the national market. On an average, both residential and commercial properties are dearer than their counterparts in Bangalore “by at least Rs 500 per sq ft”, mainly due to higher land costs, say CDF members.

Besides, with no one allowed to hold land more than 500 sq m in size, no private builder doing business in Bengal can avail of the benefit of income-tax exemption offered in the last budget to projects spread over an acre or more.

Sushil Mohta, honorary secretary of CDF, alleges that the government's refusal to annul the Land Act has bred rampant corruption and encouraged backdoor methods. “Besides, the two basic tenets towards solving the housing problem — availability and affordability — are negated by large areas of land being needlessly locked in,” he adds.

The least the government can do, say CDF members, is modify the Act, so that builders giving an undertaking that they shall develop the land under the Land Act within a reasonable timeframe, should be allowed to do so and exempted from the ambit of the legislation. “Only then can we create a competitive environment to not only address housing needs, but also offer ready commercial space to attract multinationals,” says Chopra.

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