30,000 crore, 10,000 buy­ers

10,000 prop­erty buy­ers face an un­cer­tain fu­ture and 30,000 crore re­mains locked up be­cause of Delhi govt’s in­abil­ity to take a stand on the land pool­ing pol­icy

HT Estates - - NEWS - Jee­van Prakash Sharma

The Aam Admi Party (AAP) has an im­por­tant ques­tion to an­swer. Why, when it is try­ing to fast track the reg­u­lar­i­sa­tion of about 1,200 unau­tho­rised colonies in Delhi, is the party re­fus­ing to take a clear stand on the land pool­ing pol­icy (LPP) which has the po­ten­tial to cre­ate 25 lakh to 30 lakh hous­ing units with modern fa­cil­i­ties in Delhi? The sad truth is that thou­sands of buy­ers are also in the dan­ger of los­ing their money as un­scrupu­lous par­ties are sell­ing them land and prop­er­ties as part of LPP.

Ac­cord­ing to a rough es­ti­mate drawn up after dis­cus­sions with sev­eral stake­hold­ers in Delhi De­vel­op­ment Author­ity’s (DDA) LPP, HT Es­tates has rea­son to be­lieve that var­i­ous cor­po­rate houses, de­vel­op­ers and in­di­vid­ual buy­ers have in all prob­a­bil­ity spent ₹ 30,000 crore on buy­ing land from farm­ers in the past few years. This huge cor­pus re­mains locked up due to lack of clar­ity on the part of the Delhi gov­ern­ment caus­ing se­vere fi­nan­cial in­con­ve­nience to the par­ties con­cerned.

An­other mat­ter that has come to light is that when the manda­tory pro­vi­sions of the LPP have not been com­pleted, builders or bro­kers can in no way ad­ver­tise projects re­lated to it. ₹

Under the LPP, land parcels owned by in­di­vid­u­als or groups are legally con­sol­i­dated by trans­fer of ownership rights to the des­ig­nated land pool­ing agency. The agency then trans­fers ownership of part of the land back to the landown­ers for de­vel­op­ing such ar­eas.

Some de­vel­op­ers and land own­ing groups, it is learnt, have also been lur­ing home­buy­ers to in­vest in apart­ments in land pool­ing zones. When the manda­tory pro­vi­sions of the LPP have not been com­pleted, builders and bro­kers can in no way launch a n d a dve r t i s e projects re­lated to it. Till now, ac­cord­ing to an­other es­ti­mate, more than 10,000 home­buy­ers have al­ready paid the book­ing amount, rang­ing be­tween ₹ 10 lakh and ₹ 20 lakh, for apart­ments in agri­cul­tural ar­eas the land use of which has yet to be changed to res­i­den­tial.

Ex­perts say that land in seven LLP zones – L, J, K1, K2, P1, P2, N – mea­sures 75,000 acres, out of which, if a con­ser­va­tive view is taken, 25% to 30% (18,000 to 22,000 acres) land has al­ready been bought by sev­eral cor­po­rate houses, de­vel­op­ers and in­di­vid­ual buy­ers from farm­ers. If land cost is roughly cal­cu­lated at ₹ 1.5 crore per acre, the money to pur­chase land comes to around

LJ₹ 27,000 t o

₹ 35,000 crore.

“The land pool­ing pol­icy files have been ly­ing with the Delhi gov­ern­ment for more than six months but no de­ci­sion has been taken on the mat­ter. This is the file which con­tains Delhi’s fu­ture de­vel­op­ment plan, with costs es­ti­mated at more than ₹ 1 lakh crore for hous­ing for more than 20 lakh fam­i­lies in highly reg­u­larised modern group hous­ing colonies,” says Sud­hir Dabas from Saf­fron-Land Realty Ven­tures Private Lim­ited, a com­pany which pro­vides con­sul­tancy on land pool­ing.

I t i s “un­for­tu­nate,” Dabas says, t hat while the econ­omy is “beg­ging for more in­flow of in­vest­ment in key sec­tors, about ₹ 30,000 crore of in­vestor money is held up in land pool­ing schemes. The funds could have oth­er­wise gen­er­ated a huge in­flow of for­eign and indige­nous in­vest­ment in the oth­er­wise mor­bid real es­tate sec­tor. The Delhi gov­ern­ment must clear files or give rea­sons for its lax­ity.” Ques­tion­ing the “in­dor­di­nate de­lay” by the Delhi gov­ern­ment, Ramesh Menon, director, Certes Realty, says non-im­ple­men­ta­tion of the op­er­a­tional­i­sa­tion mech­a­nism of land pool­ing has given the “op­por­tu­nity to a few un­scrupu­lous el­e­ments to mar­ket apart­ments, which have no le­gal sanc­tion what­so­ever. The law which reg­u­lates rais­ing of money from pub­lic en­ti­ties, does not al­low multi-state co­op­er­a­tive hous­ing so­ci­eties and wel­fare so­ci­eties to col­lect money from the pub­lic for the pur­pose of real es­tate ac­tiv­i­ties.”

Many ex­perts say that most sell­ing agen­cies haven’t un­der­taken any due- dili­gence on th­ese projects, and are my­opi­cally marketing th­ese projects over­seas, too, for self­ish gains. Th­ese bro­ker­age fir ms have en­dan­gered the hard earned money of un­sus­pect­ing con­sumers, who are most likely to lose not just the in­ter­est on their in­vest­ment, but also the cap­i­tal in many cases.

“Many de­vel­op­ers are advertising even fa­cil­i­ties, ameni­ties and de­sign of apart­ment projects even though the manda­tory pro­vi­sions of the LPP are yet to be com­pleted. Most sea­soned in­vestors have stayed away so the buy­ers at the bot­tom of the pyra­mid are be­ing tar­geted,” says Menon.

When the ur­ban de­vel­op­ment min­istry gave its nod to op­er­a­tional guide­lines for LPP in May last year, lot of peo­ple thought the LLP would very soon be­come a re­al­ity. The next step would have en­tailed the con­ver­sion of 95 ru­ral vil­lages to ur­ban vil­lages under Section 507 of the Delhi Mu­nic­i­pal Cor­po­ra­tion Act (DMCA) 1957.

Ac­cord­ing to Section 507 ( DMCA), “The Cor­po­ra­tion with the pre­vi­ous ap­proval of the Gov­ern­ment, may, by no­ti­fi­ca­tion in the Of­fi­cial Gazette, de­clare that any por­tion of the ru­ral ar­eas shall cease to be in­cluded therein and upon the is­sue of such no­ti­fi­ca­tion that por­tion shall be in­cluded in and form part of the ur­ban ar­eas.”

Once the ru­ral vil­lages will be­come ur­ban ar­eas, Section 12 of DDA Act di­rects that th­ese vil­lages should be con­verted into de­vel­op­ment ar­eas.

“Once th­ese two steps are com­pleted by the Delhi gov­ern­ment, DDA can in­vite land own­ing agen­cies to sur­ren­der land to the Author­ity,” says a se­nior of­fi­cer from the DDA .

When HT Es­tates wrote to Man­ish Siso­dia, Delhi deputy chief min­is­ter, with a copy to the Arvind Ke­jri­wal, chief min­is­ter, ask­ing for rea­sons for the de­lay in no­ti­fi­ca­tion for the con­ver­sion of 95 ru­ral vil­lages to ur­ban ar­eas, the mail was for­warded to spe­cial sec­re­tary ur­ban de­vel­op­ment by GK Mad­hav, OSD to deputy chief min­is­ter, keep­ing this cor­re­spon­dent in the loop with a com­ment, “Please find the mail here to look into the mat­ter. ATR/Sta­tus may please be sent to ap­pli­cant.” Re­peated at­tempts by this cor­re­spon­dent to get in touch with SS Gill, spe­cial sec­re­tary, ur­ban de­vel­op­ment, who is as­so­ci­ated with the LPP, proved fu­tile as Gill dis­con­nected his mo­bile phone the mo­ment he was asked to clar­ify the sta­tus of the pol­icy.

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