More power to landowners
Haryana aims to solve land acquisition challenge innovatively through transferable development rights, which will also empower landowners
With land acquisition now becomi ng a time- consuming and an expensive affair ( compensation that is almost four times the market price of land has to be paid for rural areas and two times for urban l and), t he Haryana gover nment has now found an innovative way to address the challenge. Last week, it launched the new integrated licensing policy ( NILP) 2015, which seeks to balance the aspirations of farmers, property buyers, real estate developers and the government. Under the policy, the minimum size of a township has been reduced from the earlier 100 acres to 25 acres and the international model of transferable development rights (TDR), already in place in Maharastra, Tamil Nadu and Karnataka, has been introduced.
Under this policy the government might not have to compulsorily acquire land. Through the TDR mechanism it seeks to enable small landowners to voluntarily monetise their land by participating in the process of licensing, real estate development and marketing and sale of their TDR. Instead of a fixed compensation for land acquisition, farmers will get TDR cer- tificates which they can sell like stocks in the share market.
Farmers with land holdings of less than 25 acres will be able to obtain a TDR certificate from the government and monetise their land holdings at current market prices in residential areas and for sites designated for external development works such as sector roads, colleges, hospitals, fire stations, open spaces and green belts etc.
Each farmer will be allowed to sell the TDR certificate equivalent to 1 floor area ratio (FAR) of his land at market rates and not end up filing cases in courts claiming more compensation as per market rates.
Relaxing norms for builders, the policy now allows real estate developers to construct projects on land measuring less than 100 acres. Also, builders can acquire land directly from the farmers and give it back to the government in exchange of a TDR certificate which will get them additional FAR that can be loaded on to their existing project in the same zone. They can also sell the certificate to another developer in the same zone. This will ensure that work on basic infrastructure such as roads, pipelines etc continues without getting mired in land acquisition issues, say experts.
This concept has recently been introduced for procuring land falling within the align- ment of internal 18- 24 metre wide roads to enable connectivity with the wide sector roads and to make infrastructure provision for specific colonies located within the sectors.
While realty experts have said that this policy is a “game changer” and much better thought out than Delhi’s land pooling policy, they add that its success will ultimately depend on how well it is executed. “Ultimately, all depends on execution, how the policy finally gets rolled out – that will define its success in the future. How much TDR can you buy? What is the process of approval? How much time will it take to get approvals? All of it has to be thought out. This is only a statement of intent, a policy document. The modalities will take some time to come through. This will pave the way for longterm maturity of the market. So far there is artificial scarcity and pricing in the market, arbitrage in land values will go away or at least come down,” says Anckur Srivasttava of Gen Real Advisers.
The intent of this policy is to overcome the challenges of land acquisition with the onus to acquire land now resting on the developer. “Naredco welcomes this well thought out move. It will open up infrastructure development without the government having to put in huge