By Vipin Agnihotri
In last few months, there has been quite a talk regarding the scrapping of Urban Land Ceiling (ULC) Act. Though, Maharashtra government is working overtime to repeal the ULC Act, it has come into the notice of The India Street that Urban Development Department has issued a circular, which is creating quite a headache among developers.
Theoretically speaking, circular by Urban Development Department makes it mandatory for builders developing residential projects on surplus land loaded with Transfer of Development Rates (TDR) to get a nod of approval from Urban Development Department.
The circular by Urban Development Department means that builder will not only have to seek exemption under the urban land ceiling for plots more than 500 sq meter but would also have to get a separate no objection certificate from the Urban Development Department for loading TDR on such surplus land- until and unless controversial ULC Act is repealed.
Officials of Urban Development Department are not that bother about developers concerns. “The government will interfere only where exemption will be granted on surplus land. The government is within its power to issue such circulars. We are not putting any restriction on the construction but as the government is allotting the land to builders and individuals, it can put forth conditions for lading TDR on such lands,” pointed out government official.
It is worthwhile pointing that to get exemption, the builder had to give an undertaking that he would use the land for low cost housing. Most of the builders told The India Street that the circular goes against the objective of repealing ULC.
In my opinion, once the lands are exempted from ULC developer can exploit the potential FSI on the land. This will have an adverse impact on TDR projects developed on exempted lands. No doubt, its ridiculous that on one hand government wants to repeal the ULC, and on the other side they are sending out a circular to get no objection certificate from ULC for TDR projects on surplus land.
Plenty of the projects in Mumbai, especially in suburban areas may be impacted adversely because of this circular. Of course, if there is some sort of delay in getting no objection certificate, prices will go up and end users will be the sufferers.
All in all, this is not good news for Mumbai builders. With this circular, it will take more time to approve housing projects and subsequently increase the cost of the developer. The consequent delay in completing projects may lead to increase in prices and reduce the availability of the stock.
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