EXISTING GOVERNMENT POLICIES GENTLEMEN !!

The Urban Land Policy Committee (Ministry of Health) appointed by the Government of India in 1965, articulated the following Land Policy Objectives (Planning Commission, 1983);


1. To achieve optimum social use of urban land;

2. To make land available in adequate quantity, at right time and for reasonable prices to both public authorities and individuals;

3. To encourage cooperative community effort and bona fide individual builders in the field of land development, housing and construction;

4. To prevent concentration of land ownership in a few private hands and especially to safeguard the interests of the poor and under - privileged sections of the urban society.

In addition, a commonly held objective is,

5. To use land as a resource for financing urban development by recouping the unearned income which otherwise accrues to private land owners. (Fifth Five Year Plan)



The most important experiment of large scale public acquisition of land for urban development has been that of Delhi Development Authority (DDA). However the results have been quite contrary to the expectation. It is generally observed that (Planning Commission, 1983);

1. It has not been possible for DDA to provide land at affordable prices to low income beneficiaries resulting in large scale jhuggi jhopadi colonies.

2. In the absence of price signals land has been sub optimally used, resulting in over provision to powerful groups, and

3. DDA.s policy to auction very few plots at a time and treating the maximum price quoted in such biding as the real market price has in fact meant artificially increasing the land price through deliberate scarcity.



Although the objectives have been neatly formulated, the policy measures which can achieve these objectives in practice still remain to be sharpened and coordinated. The measures can be classified as a) direct government investment b) legal and regulatory; and c) fiscal. Examples of these are;

1. Direct government investment in land development for provision of infrastructure, housing or overall town development through large scale compulsory land acquisition.

2. Statutory provisions for compulsory acquisition of land at less than market price, regulations regarding land use zoning, development control and building codes for health and safety.

3. Fiscal measures in the form of appropriate taxation that can help achieve the land policy objectives.



The Land Acquisition Act, 1894

The Act enables compulsory acquisition of land needed for public purposes and for

Companies. After the amendment of 1984, the expression public purpose includes, the

provision of village sites, land for town planning, for planned development, residential

purposes, schemes sponsored by government and for locating public offices.

The Act requires that the market value of land be awarded as the compensation for

compulsory acquisition. Market value of the land is determined on the rates prevailing at

the date of the publication of the notification under Section 4.

In addition to the market value of the land, an amount of 12% per annum on such market

value for the period commencing on and from the date of the publication of the notification

under Section 4, in respect of such land to the date of the award or the date of taking





Part 2 possession of the land, whichever is earlier and a solatium of 30% on such market value

in consideration of the compulsory nature of acquisition is also payable.

Declaration of Intended Acquisition under Section 6 has to be made within one year from

the date of the publication of the notification under Section 4. The award has to made

under Section 11 within a period of two years from the date of the publication of the

declaration and if no award is made within that period the entire proceedings for the

acquisition lapse.

The amount of compensation to be awarded for the land acquired under the Act is

principally based on the market value of land at the date of the publication of the notification

under section 4 (section 23(1)). However Section 24 clarifies that while awarding the

amount of compensation, increase to the value of the land likely to accrue from the

future use is not to be taken into consideration.

Changes in the Constitution affecting Land (1949-1978)

Article 19 (f) of the Constitution recognised .to acquire, hold and dispose of property. as

one of the fundamental rights. While the Directive Principles of State Policy (Article 39

(b)) require that the .ownership and control of the material resources of the country are

so distributed as best to subserve the common good; that the operation of the economic

system does not result in the concentration of wealth and means of production to the

common detriment..

The 25th amendment of 1972 made any legislation claiming to subserve the Directive

principle non-justiciable. .Notwithstanding anything contained in Article 13, no law giving

effect to the policy of the State toward securing all or any of the principles laid down in

Part IV shall be deemed to be void on the ground that it is inconsistent with, or abridges

any of the rights conferred by Article 14 or 19, and no law containing a declaration that

it is for giving effect to such policy shall be called in question in any court on the ground

that it dose not give effect to such policy.. This amendment further replaced the word

.compensation. by the word .amount. in Article 31 (2) and the adequacy of the amount

was made non-justiciable.

By the 44th Amendment of 1978, Article 38 (2) has been added which states that, .The

State shall, in particular, strive to eliminate inequalities in status, facilities and opportunities,

not only amongst individuals, but amongst groups of people residing in different areas or

engaged in different vocations.. The amendment also deleted the fundamental right .to

acquire , hold and dispose of property. and reduced it to only a legal right.

The 25th amendment of 1972 is of crucial significance, as legislation enacted thereafter

provided for taking over of land, at less than market price or at a nominal .amount..

According to Section 32 (1) of the Maharashtra Industrial Act, 1961, the State Government

can acquire the land required for the purpose of development by the MID Corporation.

Provisions for land acquisition are same as in LA Act, 1894.

Maharashtra Regional and Town Planning Act, 1966

Under Section 125 of this Act it has been clarified that "any land required, reserved or

designated in a Regional Plan, Development Plan or town planning scheme for a public

purpose or purposes including plans for any area of comprehensive development or for

any new town shall be deemed to be land needed for a public purpose within the meaning





Part 2 of the Land Acquisition Act, 1894". Under the Act, after the publication of a draft Regional

Plan, a Development or any other plan or town planning scheme, acquisition of land can

proceed under the provisions of the Land Acquisition Act 1894. On receipt of application

from the Appropriate Planning Authority, the State Government has to make a declaration

in the Official Gazette, in the manner provided under Section 6 of the LA Act, 1894. The

declaration so published is deemed to be declaration under Section 6 of the LA Act,

1894. However, such declaration should not be made after the expiry of three years from

the date of publication of the draft plan.

Compensation is determined on the basis of the market value prevailing on the dates as

described below;

1. where the land is to be acquired for the purposes of a new town, the date of publication

of the notification constituting or declaring the Development Authority for such town;

2. where the land is acquired for the purposes of a Special Planning Authority, the date

of the publication of the notification of the area as an undeveloped area; and

3. in any other case, the date of publication of interim or the draft plan or town planning

scheme.

If a declaration is not made within three years of publication the draft plan, then fresh

declaration has to made and that date is to be used for determining the market value and

compensation.

Section 127, allows the owner to serve a purchase notice to the Appropriate Planning

Authority, if land is not acquired within ten years from the date of the final Plan. If lands

are not acquired within six months from the date of the service of such notice, the

reservation, allotment or designation is deemed to have lapsed and the land is deemed

to be released from such reservation, allotment or designation. The land then becomes

available to the land owner for the purposes of development permissible in the case of

the adjacent land under the relevant plan.

Under Section 128, lands can be acquired for purpose other than the one for which it is

designated in any plan under the provisions of the LA Act 1894 under certain conditions.

The Maharashtra Slum Areas (Improvement, Clearance and Redevelopment)

Act, 1971

Execution of any work of improvement of any slum area or building in such area or

redevelopment of clearance area is deemed to be a public purpose in this Act.

The State Government on representation of the Competent Authority can acquire the

land for such purposes. The amendment of 1984, allows the State Government to transfer

the lands so acquired by way of lease to Co-operative Housing Societies of the slum

dwellers.

The compensation under Section 17, is 60 times the net average monthly income actually

derived from such land during the period of the five consecutive years immediately

preceding the date of publication of the notice under Section 14.





Part 2 Mumbai Metropolitan Region Development Authority Act, 1974

According to Section 32 (2), discharging any of Authority’s functions or exercising any of

its powers or carrying out any of its projects or schemes or development programmes

are deemed to be public purpose; and on receipt of representation of the Authority, State

Government can acquire the land.

For land in urban areas acquired under this Act, the amount of compensation under

Section 35, is 100 times the net average monthly income actually derived from such land

during the period of the five consecutive years immediately preceding the date of

publication of the notification under Section 32. When the amount of compensation for

acquisition is not paid on or before possession of the land, the Competent Authority has

to pay interest at the rate of 4% for first six months and thereafter at the rate of 9% per

annum.

In case of rural areas the compensation is to be determined as laid down in the Land

Acquisition Act, 1894.

Urban Land (Ceiling and Regulation) Act, 1976

Section 3 of the Act specifies that persons are not entitled to hold vacant land in excess

of the ceiling limit. Section 4 (1) specifies the ceiling limits applicable to different categories

of urban agglomerations as shown below:

The agglomeration is defined to include an area within a radius of 8 km. in case of

Mumbai and 5 km. in case of Thane and Ulhasnagar respectively.

After the notification under Section 10(1) by the Competent Authority the land in excess

of the limit is deemed to have been acquired by the State Government under Section

10(3). In case of lands, (Section 11(1)(a)) where there is income, compensation is paid

equal to 8-1/3 times the net average yearly income of last five years preceding the date

of notification under Section 10(1). In case of land, (Section 11(1)(b)) which has no annual

income, the maximum compensation is Rs. 10 per sq.m. for lands situated in categories

A or B and Rs. 5 per sq.m. for categories C and D. The competent Authority is entitled to

fix the amount lower than the above. In no case the total amount of compensation exceeds

Rupees Two lakhs under Section 11(6). Furthermore the land owner is entitled to get

only Rs. 25,000 in cash or 25% of the total amount whichever is less. The balance

amount is payable by negotiable bonds redeemable after 20 years duration carrying 5%

interest from the date on which the vacant land is deemed to have been acquired under

Section 10 (3).

The Maharashtra Housing and Area Development Act, 1976

The State Government by Section 41, is empowered to acquire land to enable the Authority

to discharge its functions or to exercise its powers or to carry out any of its proposals,

plans or projects. The provisions related to compensation are same as in MMRDA Act,

1974.







The salient features of the tripartite agreement are as follows;

The land holders to deliver possession of the land to the State Government for nominal

price of Re. 1 per ha.

The Authority to lease the land to the land owners for a period of 80 years for nominal

premium of Re. 1 per ha.

The landowners to develop the entire infrastructure in the land within a period of 10

years and hand over the same to the MMRDA free of cost.

15% of the entire built up area will be surrendered to the State Government/ Authority for

a fixed price of Rs. 135 per sq.ft., which was subsequently increased to Rs. 150 per sq.ft.

The entire land to be exempted under Section 20 of the ULC Act. However, land holders

to build 50% of the flats less than 40 sq.m.. in terms of FSI and remaining 50% of the flats

not to exceed 80 sq.m..

The land holders were required to offer 50 ha. of developed land to Central Government

Departments who had initiated acquisition proceedings for the land before the execution

of the tripartite agreement. However if the Central Govt Departments did not respond

within a period of three months the landowners were free to use the land. In practice

therefore the Govt. Dept. got less than 10 ha of land.



Alternatives to compulsory land acquisition have to be considered in the three types of

planning situations viz.

1. acquisition of an individual plot reserved in the Development Plan e.g. school, garden

2. bringing about planned development of land that is about to acquire urban potential

over the next decade, but which is currently largely undeveloped, and

3. areas in need of comprehensive redevelopment on account of obsolete pattern of

development and buildings

















Despite these experiences, recoupment of land value gain has been a favourite theme.

In 1988, Government of Maharashtra had prepared a draft legislation to tax land value

gains accruing on account of -

1. infrastructure investment (betterment)

2. permission to convert land use, and

3. grant of excess FSI.

The draft legislation had also proposed taxation of vacant land. However, the legislation

could not even be introduced in the legislative assembly.

BY KD