Bill To Repeal Land Ceiling Act Soon

The centrehas decided to repeal the Urban Land Ceiling Regulation Act, 1976, paving the way for urban land holding regulation to be shifted from the Centre to the states, urban development minister Ram Jethmalani announced after the Union cabinets meeting in New Delhi yesterday.

The minister said a bill would be introduced in the budget session of Parliament, beginning May 27, to repeal the existing Act. This will lead to greater supply of land in urban areas and is expected to eventually push real estate prices down.

Jethmalani also revealed that a proposal has been submitted to the finance ministry to confer infrastructure status to the real estate sector, thereby allowing institutional investment to flow into the sector.

 

The Delhi Rent Control Act would also be amended to strike a balance between the interests of tenants and landlord, he said.

Front cabinet had decided to repeal the ULCRA in November 1997 for restoring to states their constitutional and legislation powers on land, it could not move a bill in parliament during the last session as the 11th Lok Sabha was dissolved.

Under the constitution (Article 252 (2)) the repeal of a central Act can be brought about only after two state legislatures have passed the resolution seeking repeal.

While the Haryana assembly had already passed a resolution to the effect, the previous government was awaiting the progress in the Rajasthan and Madhya Pradesh legislatures which had evinced interest in the subject. As per protocol, the centre will now write to the states seeking the legislative resolution.

Besides repeal of the ULCRA, the urban ministry also proposed a package of other measures including fiscal concessions similar to other infrastructure industries, foreign technology transfer and relaxation of various laws in order to increase the supply of urban land.

He also said that in order to translate the announcement of providing two million additional houses into a reality, the government would extend help to the private sector to invest in the area. He also said that foreign investment would also be welcome. Jethmalani also announced that policies regarding granting approvals to plans for residential buildings would be simplified and time-bound clearance would be given for all building plans. In addition, the minister also announced a rehabilitation package for slum dwellers. He also said that one more floor would be allowed to be constructed in Delhi following the recommendations of the Malhotra committee.

Ministry sources said that repeal of the act could bring down land prices due to increase in land supply and lead to speedy growth in sectors like housing, transport and other infrastructure due to free availability of land. Industry has accepted repeal of the ULCA as a step in the right direction which will pave the way for a take-off of the urban real estate sector in a path of sustained development.

The immediate fall-out of the abolition of the Act would be an increase in the supply of urban real estate which will bring down the real estate prices in the short term. In the long term, it will bring about a stability in land prices and help it reach realistic levels, pointed out KP Singh,MD, DLF Industries.

However, the abolition of ULCA needs to be followed by a slew of other measures including amendments in laws in order to have appropriate zoning laws, lifting of environmental and building restrictions which will enable better servicing and increased supply of urban land for housing purposes, he pointed out.