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Our Corporate Bureau
Mumbai, Dec 31: The Union Cabinet's decision to repeal the Urban Land Ceiling Regulation Act, 1976, or ULCRA, has failed to excite the real estate sector. However, in expectation of a further dip in prices, the general sentiment towards realty purchases is going to cool off, feel real estate experts.
They cite three prime reasons for the lack of enthusiasm: first, ULCRA was not effective in ceiling urban land acquisitions; secondly, the land acquired by the government is already allotted to various government bodies, and the third that the repealment will not immediately push property into the market as prices are not very good.
Sharad Bhansali of Kalpataru Constructions says, "For the final repealment to be effected there is still a lot of time. The Ordinance will take six months to be enacted after which it will have to go back to Parliament for final clearance. The sentiment to buy is going to be postponed as there is always this expectation that the prices would dip further."
Niranjan Hiranandani,of Hiranandani Constructions, says, "Repealment of the Act would be the perestroika that the real estate sector was looking forward to for a long time. Prices may not necessarily crash but there would be larger choices for the consumer."
A study on ULCRA by Lloyds Brooke Hillier Parker quotes ministry of urban development ministry report as stating that out of the 220,674 hectares of vacant land identified to be in excess of the ceiling, the land actually taken into possession by the state government is only 19,020 hectares. This works out to barely nine per cent of the total vacant land identified to be in excess of the ceiling.
The Maharashtra government has already been exempting 200 metres and 300 metres above the 500 metres ceiling from the purview of the Act. Instead a premium equivalent to the differential between the market value of the property and the original price is being charged on this extra bit of land.
SG Maheshwari of Maheswari & Maheswari says, "The repealment of ULCRA will push anumber of properties into the market. In the stretch between Colaba and Worli alone there are about 100 bungalows which are likely to come into the market with the repealment of ULCRA." According to government estimates in Greater Bombay alone there is about 15,000 acres of excess land under ULCRA. This is in possession of big landlords and trustees.
Out of this excess land, 2,200 acres belongs to the Godrej Trust, and another 1,460 acres belongs to FE Dinshaw Trust. According to the information available approximately 75 acres of land has been acquired in the last 20 years. According to a survey undertaken by the government, the land thus taken over from various trusts and individuals has already been allotted to third parties for development which means that the allotted land would not be available for development. The release of mill land in Central Mumbai alone will contribute about 1,69,099 sq.mts. to the market.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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