Land use change is cumbersome

It can lead to big gains for buyers but huge losses are also possible, for many reasons

Everyone is not as lucky as Robert Vadra. The 3.5 acres of farmland his company purchased in Haryana got the permission within a month to be used as a commercial colony from the state government. For other private citizens, the process takes at least nine to 12 months or even more.

While both builders and private citizens have been buying agricultural or forest land for years and getting these converted for private use, technically only agriculturalists are allowed to buy it. As Naushad Panjwani, senior executive director, Knight Frank India, puts it, “If you are not an agriculturalist, buying agricultural land with an intention to profit from it is quite risky.”

The law does provide for changing the land use. But the process is long and has many layers. Land is a state subject and the laws are more stringent in some places than in others. In Maharashtra, for instance, the application for changing the land use has to be made to the relevant urban development authority. Depending on where the land is, it could be either the tehsildar or the sub-divisional officer or the collector. After all the clearances, the final authority will be the chief minister.

A long list of documents is needed — land records or saat bara, the plan showing roads, open spaces, registration certificate of the architect, no-objection certificate (NoC) from the pollution board if for industrial use, NoC from land acquisition board, provisions to be adopted for sewage, drainage, etc. The application for conversion has to be jointly made by the seller and the buyer. The authorities have to conduct a feasibility survey, an inquiry with the local authorities and a detailed site study.

The procedure, though lengthy, is straightforward. But people often choose to involve intermediaries, in the hope of skipping the lengthy process and reach the signing authority, the CM, faster.

Yet, the application might never reach the CM if any of the authorities concerned are not convinced about the purpose. As Arvind Nandan, executive director, Cushman & Wakefield, says, "In our country, it is an accepted norm to believe the clearances will follow later." But if you don't get approvals or if some documents are missing while applying for the conversion, then construction can be halted. It is perhaps due to this that many projects start without all approvals or permission in place. But these come with their own set of risks, like the forest land case in Mumbai.

Around 500,000 Mumbaikars bought flats in ‘forest land’, only to find the title disputed. While the government has collected as much as Rs 100 crore as penalty from the residents and developers to clear the title, the matter is yet to be resolved. As a result, you can’t even sell the property. Worse, there is no clarity on whether the properties under-construction will ever be completed.

Life, surely, isn’t easy for other private citizens.