Jaipal Reddy refuses funds for Mumbai’s renewal plan unless Urban Land Ceiling Act is killed. But govt will launch the plan on Feb 7 nonetheless.
NEW DELHI: The National Urban Renewal Mission (NURM) that could make India’s cities liveable is being launched in Mumbai on February 7 with no funds and lots of problems.
Expressing displeasure at the attitude by the Congress-led state government, which has refused to scrap the Urban Land Ceiling Act citing political compulsions, Union Urban Development minister S Jaipal Reddy warned once again on Thursday that this would automatically restrict funds for Mumbai. Repeal of the ULC Act is amongst the reforms made mandatory by the NURM. “States must ensure full compliance with the mission guidelines for central funding,” Reddy said.
Last week, Chief Minister Vilas Deshmukh made a presentation to Prime Minister Manmohan Singh in this regard. Deshmukh pleaded that his state’s case be considered as a special one because Mumbai needs urgent infrastructure to combat the monsoons and floods.
But Reddy said the arguments defending the ULC Act are not convincing. “If Delhi could do without the Urban Land Ceiling Act, why can’t Maharashtra?” he said, adding that the Rent Control Act too has outlived its utility. Turn to p17
The Maharashtra Chamber of Housing Industry has been urging the state government to scrap the act for many years now. Developers say the act has damaged the real-estate market. The act is being implemented only in Mumbai, Pune, Thane, and Nagpur.
With all states except Maharashtra and West Bengal agreeing to repeal the ULC Act, Reddy repeated his stand: “No reforms, no money.”
According to the NURM guidelines, Maharashtra can avail of up to 25 per cent of the funding needed for its urban projects from the Centre if it submits detailed project reports based on a city development plan.
The catch is that Maharashtra needs to commit to reforms, to be implemented over seven years. There is no compulsion that the ULC Act has to go first. It can go finally, in the seventh year. But each state has to carry out a minimum of one mandatory and two optional reforms a year to keep central funds flowing in.
Maharashtra is still entitled to money for its most urgent projects - those relating to water supply and sanitation. “These projects will consume maximum money in the state,” Reddy said. Senior state officials are likely to meet their central counterparts in this regard next week.
What is the Urban Land Ceiling Act?
The Urban Land Ceiling Act was introduced in 1976 to take over surplus land from private holders and use it to build housing for the poor. The act limits individual land holdings to 500 square metres. The surplus has to be surrendered to the government for public purposes.
But private trusts and companies - which are estimated to control 50 per cent of all private land in Mumbai - were allowed to retain their properties if they used it for the specific purpose for which the trusts had been set up.
Private developers hold the power of attorney for thousands of acres of such lands. But the act prevents them from exploiting it commercially.
Developers and landowners say the act has been used to harass them and is a major obstacle in the path of the housing sector’s growth. But government officials say it is the only chance for the poor to acquire land. They also say the exemptions under the act are being misused.
In 1999, the Centre repealed the act, but states were permitted to take the final decision on whether to retain it.
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