Thursday, August 6, 2015

Analysis of land acquisition/development in Delhi

Let us take a look at Population growth in Delhi, Population of NCT-Delhi had been growing at rates of 50% + per decade from 1950 to 1991. It increased from 17 lakhs in 1951 to 167 lakhs in 2011. The net addition to Delhi’s population during the decade 2001-2011 has 
been more than 29 lakh persons (21%). There is a clear demand-supply gap; the population growth of Delhi implies a continuing requirement for land. Delhi has also been attracting investment, employment opportunities, small industry, wholesale and retail trade and myriad of activities. All these new activities require space and increase demand for land for industrial, institutional, commercial and residential uses.

While demand for land kept increasing since 1950s, the supply has been relatively inelastic in responding to the demand. This has resulted in a number of problems, such as spiraling real estate prices, restricted land supply, unaffordable housing, formation of slums, etc. The reasons are many: but a very major reason has been the difficulty in acquiring land for development. 

Land development and disposal in Delhi is the responsibility of the Delhi Development Authority, constituted under DDA Act 1957. The Land and Building Department of the Delhi Government acquires land for DDA. DDA then undertakes the process of development for various purposes including housing. In addition, DDA also disposes off land to private developers and cooperative group housing society for the purpose of housing. Over the years it has been observed that DDA has not been able to fulfill the demand for land of the capital, leading to formation of unauthorized colonies. Also, DDA has not been able to fulfill its housing targets.

It was therefore necessary to look at the major problems and suggest alternative solutions. Only an average of 777 hectares of land was acquired annually instead of 1372 hectares as intended to meet the targets of the development set in MPD-62. During 1981-2001, against a planned acquisition of 24,000 hectares, 9507 hectares were acquired by 2001, which was only 40% of the target. Around 14479 hectares of land was proposed to be developed in the plan period 1961-81. However, by 1984 the land actually developed for residential purpose was 7316 hectares. In the various sub cities envisaged under MPD-2001, of the total 17493.15 hectares proposed to be developed, only 8388.15 hectares (47.95) of serviced land was made available by 2001. 50 per cent growth in existing infrastructure was required whereas existing land policy was unable to meet the demand.

Existing infrastructure capacity - 1.5 crore people, 2011 population - 1.7 crore, therefore, current deficit - 20 lakh. Expected 2021 population - 2.3 crore with 60 lakh growth. At least 50,000 acres of land is to be developed to accommodate 80 lakh population in just 6 years.

The shortfall in land acquired/developed can be primarily attributed to the following reasons:

  • Dissatisfaction of the landowners with the compensation package leading to disputes and litigations thus slowing down the process of land acquisition. 
  • Restricted financial capacity of DDA to acquire huge land parcels
  • Delays in alternate allotment leading to further increases in cost. 
  • Enhancement in compensation awarded by the court implying additional 
resources and extra administrative work 
  • Pockets and plots of land that remain under litigation for a long time and hence left vacant have been encroached upon by unauthorised and JJ colonies.
  • All the above have resulted in public supply of land falling short of demand and physical targets not being met.
  • Thus, the need of the hour is an alternate land development model that is simple to operate and attractive to the landowner and which can quicken the process of land assembly.   

The housing sector has tremendous potential, as it is a major enabler as well as contributor to the economy. It is among the largest contributor to the exchequer and second largest employer. The sector also supports 250 other ancillary industries and nurturing of the sector can help increase its share from 6 per cent in 2013 to 10 to 12 per cent by 2022.

Thus, a new participatory land policy, addressing the concerns of the authorities and landowners, and enabling infrastructure creation was required and has been created. DDA’s land pooling policy is the same document which got its approval and go ahead on July 27th, 2013 and Urban Ministry’s approval on September 6th, 2013.

The Delhi Master Plan MPD 2021 is touted to be the largest ever real estate opportunity in the country for the demographic demand, and the administrative commitment provides the triggers for growth. Delhi’s Master Plan is designed to accommodate an additional population of 10 million people, as well as facilitate the creation of almost 1.6 million dwelling units, and the land pooling policy being the first of the many innovative methods towards the vision to reality.

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