The Telegraph
Tuesday , September 4 , 2012
Since 1st March, 1999
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Land ceiling leeway for realtors
- Rule to be eased if developers agree to reserve 25% homes for the poor

Calcutta, Sept. 3: The Mamata Banerjee government has decided to allow real estate developers to hold ceiling surplus land in urban areas if they agree to reserve 25 per cent dwelling units for the poor.

The move has been initiated to rectify an anomaly enforced by the Left Front after the Urban Land (Ceiling and Regulation) Act (Ulcra) was passed in 1976.

“We will frame a policy under which builders will be allowed to hold surplus land in urban areas if they reserve certain percentage of the dwelling units, say 25 per cent, for the poor. Details of the modalities will be laid down in the policy,” said Firhad Hakim, the state urban development minister.

“But we won’t repeal the Ulcra as it offers safeguards to the poor and middle-class,” Hakim added.

According to the act, individuals can hold a maximum of 500 square metres in cities like Calcutta and other urban local bodies falling in category A. In areas like Asansol, Burnpur and Durgapur — which fall in category D — the ceiling limit is 2,000 square metres.

Senior officials at Writers’ Buildings said the decision to frame a policy for granting exemption to builders is encouraging in terms of urban development, which had received a jolt during the Left Front regime.

“The act had come into force in 1976 when a few states, including Bengal, had passed it in the Assemblies after it was passed in Parliament. The act was actually implemented in Bengal by the Left Front after it came to power in 1977,” said an official.

Officials also said that though the act was passed with an aim to prevent concentration of urban land in the hands of a few persons and speculation and profiteering, it was later found that it was a barrier to urban development.

“Land prices in cities reached astronomical heights because of the artificial scarcity created by the act,” said an official.

Waking up to the reality, the Centre had repealed the act in 1999 and urged the states — which had passed the act in their Assemblies — to repeal it too.

The Centre had decided to repeal the act after it was felt that vast tracts of land in cities would be freed up for development and bridge the gap between demand and supply in real estate. It was also felt that the increase in the supply of land would improve accessibility and affordability for the urban poor.

Senior officials at Writers’ Buildings said the new government’s decision to frame a policy to grant exemption to builders would serve to some extent the purpose the Centre was advocating. “But it would have been better, had the state decided to repeal the act like all other states,” said an official.

A minister in the Mamata Banerjee cabinet said: “It is true that the act has taken the price of land in urban areas beyond the reach of middle class and the poor. But we cannot repeal the act because of our political compulsions.”

The Left Front government was also against repealing the act even after the Centre had made it mandatory for securing funds under the JNNURM, the urban renewal scheme.

“The Left Front government had set up a committee to review whether the act should be repealed. But neither did the committee send the report nor was the act repealed,” said an official.

The new government was facing pressure from the Centre to repeal the act to ensure funds for urban development projects such as JNNURM-II, which will be launched in 2013.

“In April, the state government had assured the Centre that it would consider repealing the act. But now it has decided to frame the policy to serve the purpose without repealing the act,” said an official.

Senior officials of the state urban development department said the state would not have to amend the existing act to implement the policy as builders could be exempt on certain conditions under Section 20 of the act.