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RM Reports

Land Pooling in PPP model: evolution, benefits and success stories

by Soumya Prakash

By 2031 India’s urban population is expected to reach 600 million (60 crore) as per a report prepared by JNNURM Directorate – Ministry of Urban Development and National Institute of Urban Affairs. By 2021 Delhi-NCT (National Capital Territory) is expected to touch 230 lakh while that of the National Capital Region (NCR) 641.38 lakh as per NCR Plan – 2021 report. The Master Plan of Delhi (MPD) 2021 also projects the population of the city touching 230 lakh by 2021 and 24 lakh new dwelling units will be in demand in Delhi by that time whereas DDA has built only 11.69 lakh residential units in the city till now. Likewise, there will be an exponential requirement of residential units for the projected urban population of India.

To fulfil this demand urban development authorities in India are now banking on ‘land pooling’ instead of controversial land acquisition that used to be the norm earlier (Land acquisition in India is governed by the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 which came into force from 01 January, 2014. Till 2013, land acquisition in India was governed by Land Acquisition Act of 1894). With the landowner being in direct control of the development, the land pooling policy is being seen as the future of urbanisation in the capital. The land pooling policy is going to fuel a housing boom in the capital making available 24 lakh dwelling units in the next five years. Out of 95 villages to be declared urbanised the Delhi Government has recently declared 89 as urbanised, removing the final bottleneck in operationalising the land pooling policy.

Land Pooling in Delhi: Landowners can pool their land and give it to DDA for infrastructure development like roads, schools, hospitals, water, power, sewage lines, etc. Once developed, landowners will get back 48% or 60% of their land and rest will be retained by DDA or the private builder who can put it on sale. Landowners can also collaborate with builders.

Benefits/Give & Take: According to the DDA, the land, which will be returned to farmers, will be like a “gold mine” as they would get fully developed residential pockets that they can later sell off at very good rate. They can even enter into an agreement with developers, which could facilitate building and selling residential units.

# People giving 2 to 20 hectares of land will get 48% of developed land (43% residential + 3% commercial + 2% public/semi-public) # People giving more than 20 hectares of land get 60% of developed land (53% residential + 5% commercial + 2% public/semi-public). # Along with the land, developer entity will have to give Rs. 5 crore per hectare to DDA as External Development Charge (EDC), whereas farmers unable to give the EDC, will have to forego an additional 8% of the returned developed land. (In other words this EDC gets waived off in lieu of 8% developed residential land.) # Those who opt not to give EDC will get 35% of land (residential) in return. # Developer will get the returned land within 5 km radius of the pooled land. # DDA or the concerned builder will have to complete projects within 7 years. # If DDA fails to develop basic infrastructure before the completion of projects, it’ll pay 2% of the EDC in the first year and 3% in the successive years to the developer/land owners # Construction of houses for Economically Weaker Sections (EDS) amounting to 15% is mandatory over and above the maximum permissible Floor Area Ratio (FAR) of 400% # DDA intends to charge an EDC of Rs.1 crore for 1 acre of land, which comes to around Rs. 2,500 per square feet which is low by the standards in Delhi.

Though experts’ caution regarding ‘land pooling’ in Delhi – the success of land pooling policy would lie in the coordination between agencies like DDA, MCDs, PWD as last mile connectivity is also going to be a challenge – holds good for any corresponding local urban body for any city or town across India. Forwarding the case of Amaravati, the new capital of Andhra Pradesh, Ramesh Menon, founder-director of Certes Realty Limited, a New Delhi-based niche advisory and transaction organisation argues in favour of all possible incentives in an article in a national daily, so that government agencies have access to identified land parcels for the new infrastructure to fulfil the stated vision of Delhi in MPD 2021 into a world-class megalopolis. MPD 2021 is the last phase of development of Delhi and 100% land is likely to be consumed for the development and for this he argues ‘land pooling’ is the only way forward. In an Business World – article dated 03 June, 2017 Ranjit Sabikhi, principal partner, Ranjit Sabikhi Architects while arguing in favour of a comprehensive city scale vision for future development, agrees if implemented properly on the basis of a coordinated detailed urban design ‘land pooling’ can help transform the city. He cautions, without advance planning in detail, land pooling may actually not happen.

Evolution: Since the development authorities were finding it increasingly difficult to acquire land, because of the low compensation offered as compared to market value, in September 2013 they came up with the suggestion that landowners be requested to pool together parcels of land, for joint development with the govt./DDA, who would act as a facilitator with minimum intervention. However, it was not getting realised, because of the rules governing construction in and around villages until recently pending the villages be declared as urbanised. In 1997 Town Planning Department and Municipal Corporation of Pune city notified the development of Magarpatta – satellite township through ‘land pooling’ practice. As per a report prepared by Paresh L. Sharma, Chief Town Planner, Gujarat titled ‘The Gajarat Land Pooling Scheme’, the city of Jamalpur was first modelled on ‘town pooling scheme’ in 1925 and pooling regime in Gujarat is almost of 100 years.

Success Stories: Amaravati, the new capital of Andhra Pradesh, is being constructed by innovative land-pooling mechanism without the use of the Land Acquisition Act. Magarpatta – a satellite township of Pune is another success story of ‘land-pooling’ from the 1990s under the leadership of farmer-leader Satish Magar. The Union government is also planning to build six airports under the public-private partnership (PPP) model in Tamil Nadu, West Bengal, Maharashtra, Uttar Pradesh and Bihar adopting a land-pooling model. As per Civil Aviation Secretary R.N. Choubey, this model has so far not been adopted in the airport segment and this will help remove a lot of obstacles such as fund requirement and resistance from landowners. ‘The Gajarat Land Pooling Scheme’ report mentioned above also enumerates a number of land-pooling success stories over the years under planned, fair and equitable urban development sub-title.

Soumya Prakash is a writer who has been contributing in different fields of mass media under various capacities in the last two decades. His blogs on city infrastructure and real estate are pathbreaking!

 

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