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- Law Repeal May Free Up Land in Mumbai
With Maharashtra set to become the 10th state in the country to repeal the Urban Land Ceiling & Regulation Act (ULCRA),the megapolis of Mumbai and its suburbs Thane and Navi Mumbai could see around 25,000 acres of land being freed up for development.
On February 6, 2006, these entities faced a serious setback with the urban land ceiling department of Maharashtra issuing a circular to the registrar of properties not to register any of their documents which fell under the ULCRA. Once the Act is repealed, these entities will be free to trade in their land.
The Maharashtra government moved a resolution to repeal ULCRA on the last day of the Assembly session on Monday. This means the matter will be taken up for debate in the coming monsoon session of the state legislature.
Real estate industry analysts expect a 25 to 30 per cent price correction when this kind of land supply hits the market. "If this happens, there will be a slowdown in property prices. Since there is acute shortage of land, developers will benefit," says Rajesh Mehta, chairman, Raha Realtors.
Developers also feel they can save significantly on the money spent on getting permission under ULCRA for land development. "Most developers spend Rs 100 per sq ft on getting permission from the ULC dept. Now we can save on that cost and pass it on to the consumer," a Mumbai-based developer said.
"Earlier, nobody knew what was going on in many of the real estate firms, with the holding company creating many subsidiaries to buy huge tracts of land for projects like townships. This was due to the ceiling on land acquisition and ownership," said Vikas Agarwal, GM, ICRA, a credit rating firm.
"Now, the main company can buy land and overseas investors can also be assured of how it has been bought and developed," he addedCommentQuote0Flag
- Govt continues acquiring land under ULC Act
The state government may have brought in a Bill to repeal the Urban Land Ceiling Regulation Act (ULCRA), but that has not stopped it from embarking on a land-acquiring spree under the Act. The Bill to scrap ULCRA introduced in the Budget session of the state legislature held in March, and a final call will be taken during the Monsoon session in July.
Sources in the ULC department said that the government had announced its decision to scrap the ULC Act about a year ago. But in the last one year, they have managed to acquire 400 hectares of land in Mumbai alone. Currently they are in the process of acquiring another 200 hectares of land before the Act is finally repealed by the state legislature.
The irregularities in the Talegaon Dabhade scheme and land acquisitions in Thane, Pune, Nagpur, Nashik and Kolhapur were discussed. A senior secretary in Mantralaya, who is opposed to the ULC Act, said, "When the government is repealing the Act where is the need to conduct a meeting for assessing progress of land acquisitions? It appears that the government wants to reap maximum benefits under the Act before it is finally set aside".
The Act was enacted in 1976 to impose a ceiling on vacant land in urban areas. The idea was to give impetus to mass housing, especially for the urban poor. But since it hindered growth, the World Bank, Planning Commission and the Union government asked the state to scrap it. Initially, the government limited the provisions of the Act to nine cities, including Mumbai, Thane, Nagpur, Nashik, Kolhapur and Pune. About a year ago, it decided to initiate proceedings to have the Act scrapped.CommentQuote0Flag