Urban Land Ceiling Act To Be Repealed

The government yesterday decided to repeal the Urban Land Ceiling and Regulation Act and replace it with a fresh one which will empower state governments to enact their own Acts according to their requirements.

The move, in keeping with the recommendations of industrial and trade bodies, is expected to prevent monopolistic acquisition of land and thereby augment land supply. This, in turn, is expected to push down prices. The enhanced housing activity is expected to spur the crucial housing, transport and construction sectors.

The Act, in its present form, has been criticised for failing to provide a mechanism to force the entry of vacant urban land into the market through appropriate fiscal measures. This had resulted in the supply of urban land for housing and other developmental needs being choked, sending land prices sky-rocketing, particularly in metros.

 

The present ULCA vested too many discretionary powers in the state governments for granting exemptions, which inevitably led to corruption in the exercise of these powers. Further, the Act vested the government with the power to acquire the entire ceiling-surplus vacant land at a nominal price, which often led to lengthy litigation disputes.

The government will move the fresh bill in Parliament after its gets the necessary endorsements from state governments. 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 complete repeal.

The basic spur to repeal the Act was provided by the triumvirate of industry minister Murosali Maran, information and broadcasting minister Jaipal Reddy and finance minister P Chidambaram. Significantly, Prime Minister I K Gujral, who had moved the present ULCA in his role as housing minister in 1976, had first proposed the idea of repealing the Act when the cabinet had met on October 17.

While the Haryana legislature has already passed a resolution to the effect, the Centre will await 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.

The new Act is slated to take effect prospectively. Therefore, all cases of pending litigation will be settled under the Urban Land Ceiling Act of 1976. Urban devel-opment ministry sources revealed that this measure had been endorsed by the Law Ministry.

The new Act is expected to aid the acquisition, development and disposal of urban land. A fall-out of this would be that sick industrial units like National Textiles Corp could be rehabilitated faster. NTCs revival plan had stalled after the Maharashtra state government refused to permit it to sell its surplus land.

The requirements of land for lower income groups would be taken care of by the respective state governments, while enacting independent legislation with reference to urban land use in metropolitan cities.

The governments decision was welcomed by industry. The alternate president of Assocham, K P Singh, said amendments to the Act would only have amounted to cosmetic changes. G RBahri of Unitech Ltd said the repeal of the Act would free land for development, specially in the metros. However, he pointed out that it was not clear whether the proposal for a shelter and urban development fund levy had been scrapped or not.