Essay: Urban Land Ceiling Regulation Act – impact and efficiency

1. Introduction:
With the onset of the period of industrialization and continued till today, the biggest challenges the urbanizing world is facing, is the shortage of quality dwelling spaces for people migrating from rural areas to urban areas for employment opportunity and hence a continuum of varying other issues such as haphazard urban sprawl, squatter settlement, illegal operation of land market and gentrification etc. India being a welfare state after the independence, according to part iv of the constitution, protecting and promoting the economic and social rights of the people, it is obliged to the provision of equitable benefits to all the citizens of the country. Indian constitution has hence made numerous legal efforts to render the quality life to its people. One such effort made was the passing of URBAN LAND CEILING AND REGULATION ACT (hereby referred as ULCRA) to curb the menace of land market and provide social benefits to the urban poor who were the victims of land speculations and thus achieve a regulated and controlled growth of the urban areas.
2. ULCRA
2.1. History and objectives
Before beginning to analyse the impacts and efficiency of the act it is necessary to understand the purpose for which it was framed. “The objective of the Urban Land (Ceiling & Regulation Act), 1976, was to facilitate the availability and affordability of urban land by increasing its supply in the market and by establishing an efficient land market” (State Level Reform, 2011). Thus it prevented hording or excess holding of land by an individual, family, organization, private bodies etc. These objectives can be broadly categorized as:
• Allowing for equal distribution of the land resource for achieving social benefits such as boost in housing for the poor.
• Efficient and equitable utilization of the land resource and achieve optimum results.
• Orderly development activities in the urban agglomeration.
• Reduce the land speculation and minimize the profiteering by the individual bodies.
3. Regulation on land ceiling
The ULCRA imposed land ceiling on land holdings and its ownership for the vacant lands. The vacant land as defined are those lands which are within the urban agglomeration and not being used for agriculture. It has the potential of being used for development activities. Certain land are exempted from being considered under this act such as land on which construction is not permissible under the building regulations of the area, the areas where buildings stand constructed just before the day of the approval of the act and the land which lies in the villages and are generally used as cattle shelter. The state could thus acquire the excess land above the ceiling limits and in return give a compensation amount to the land owner. The ceiling limits varied from region to region depending upon the population of the urban agglomerations. These categorization can be listed as:
Table 1 Land ceiling limits under ULCRA 1976
sl. no Category Population Ceiling limit (sq. mtr)
1 A Metropolitan cities 500
2 B ≥ 10 lakhs 1000
3 C 3 – 10 lakhs 1500
4 D 2 – 3 lakhs 2000
While declaring the vacant land, it was also important for the owners to mention the location of the vacant land which would be subjected to compensation and taxation accordingly.
In spite of framing regulatory framework to make much change couldn’t be noticed in the land market or the fulfillment of the housing needs of the poorer section of the society. After the introduction and enactment of the act the state governments that had implemented the law in their respective states, acquired huge chunks of land from the owners for development. According to the statistics, an estimate of 2, 20,675 ha of excess vacant land was made, out of which 50,046 ha of vacant land was vested in the State Governments. Of the land vested under the state, only 19,020 ha of vacant land was acquired (Jain, 1999). What could have been the reason for the failure of such a powerful tool that was introduced?
4. Causes of failure of act
There where various loopholes within the provisions of the act that it failed to meet its desired objective of being socially and economically equitable. Some of the loopholes that existed are:
4.1. Compensation
The amount that was given to the owners as a compensation amount ranged from Rs 1- Rs 10 per square meter. Rather than acting as a compensatory amount for the release of excess lands by the owners it seemed more like a tax/ fine levied on acquisition of excess land which came down from generation. Thus many land owners were unwilling to declare the excess lands. Unlawful ways of projecting incorrect information about the land ownership, such as putting it up in the names of relatives, were utilized.
4.2. Granting exemptions
Under the section 20/21 of the act, certain exemptions were allowed for the excess land owners incases such as, where the owners agreed to the construction of housing for the poor. These conditions of exemption were misutilised by the private owners and builders. There are instances where the project is started with the purpose under which it is exempted but delayed on purpose. In certain cases the housing built becomes unreachable for the benefit of the target group.
4.3. Long periods of litigation
Due to the meagre amount of compensation provided and the resulting unwillingness of the landowners to abide by the law in addition to the cases of unlawful acquisition of land many cases went to the court and the case dragged on for a long period of time, increasing the total transaction cost of the government and the private body, thus incurring a loss of time, resource, and earning (especially in the cases of daily wage earners).
Example: A case mentioned in the DNA article by Rajshri Mehta, 17 July 2009.
When the ULCRA came into being in the year 1976 and it was adopted by the Maharashtra government. It had been stated by the authorities that around 5,950 acres of vacant land was in access and of which around 4,200 acres was to be acquired for supplying the land towards the construction of housing for the poor and the middle income group. But the process couldn’t continue as planned because owners of around 2300 acres of land challenged the act by putting up the before the commissioner of Konkan and the Bombay high court.  VOLTAS case, in the year 2007, after the repeal of ULCRA, the company who had contended that the state had not acquired the declared access land under the act of ULCRA 1976, hence the Supreme Court asked the state to return the land to the company. Following the orders of the Supreme Court, the owners of the remaining 2000 acres of land, also demanded for relief. All the complications due to the litigations resulted in the impossibility of unlocking the land for the purpose of housing.
4.4. Red taping
Another major issue that was the cause of the failure of the act was the lengthy bureaucratic procedure involved in the declaring the excess land and getting re-imbursement from the state for the same. The whole setup also gave rise to antisocial activity such as corruption. The complications and the expenditure involved in the process simply made the access of the benefits out of reach for the economically weaker section.
Lobby consisting of politicians, builders, bureaucrats and corporates surfaced, who would often take the benefits provided by the government in terms of share and other illegal fees. Example as taken from an article by Rajshri Mehta: In Mumbai, government took 10% of land or the flats that were built under chief minister’s quotas but the benefit went to and was utilized by the politicians, bureaucrats or builders who were in the circle of favor banks of these government officials.
4.5. Poor mechanism for implementation
There was no mechanism to encourage the vacant land holders to declare their excess land and introduce it into the market through any fiscal measures. Though the plans had been worked out to put an upper limit to land holding limit and ascertain equal distribution of the resource for a social benefits such as housing for low and middle income group, the mechanism to work it out was crude. It resulted in the land accumulation in the state’s hand but lacked in the ability to release it in the land market. Also the government failed to ensure that act was holistically followed and imposed upon everyone equally.
4.6. Lack of proper land records
For any sort of transactions involved for the immovable property such as land, a proper documented land records is necessary and forms an important aspect of the land management system, but in India, maintaining the same has been a major problem. Due to the lack and management of proper land records, many land came under dispute and hence resulted in the appropriate procedure for acquiring or providing compensation. The lack of proper land record also resulted in difficulty in identification of actual amount of land an individual, a group or organization had in their possession and hence making the documentation of the same a tedious task.
4.7. Biased decision
As is evident in the system today, it was very well present during those periods. Many decisions taken and implemented, regulations and exemptions, etc. favored the powerholders and elite class of the society. The grant of exemptions as discussed earlier also was highly favored towards the people who were either close to the government officials or who held the high power of the society.
5. Direct and indirect impacts on the urban poor:
The passing of the act and its subsequent implementation did not just not help in achieving the envisioned goal of the government, instead it created an artificial shortage in the land market (discussed below). With the government in hold of the acquired vacant lands and the private developers and owners not ready to declare the excess, a distortion was caused in the land market and mostly affecting the labors and people associated with the market. These had major socio-economic impact it on the beneficiary group that has been listed as:
• The group that suffered the greatest blow from the act were the farmers, people from economically weaker section, villagers etc. living and possessing land in the hinterlands of the urban areas. They were forced to give up the excess land as mentioned in the earlier sections and due to the extremely low compensation amount being paid they were further pushed down in the poverty line. These resulted in cases, as seen in the cases of DDA’s approach, of people migrating to the city core and thus forming slums.
• The prices of the available land and the land in the possession started to sky rocket. This again in turn would affect the land accessibility and availability factor for the desired purpose as was the intention of the act.
• Increased squatter settlement in the core of the cities became an issue. Government made an effort to control it by providing houses to these workers in the periphery but didn’t take into consideration the aspect of the (nearness to workplace) nature of their livelihood and hence making the effort a major fail. In few cases, like Delhi, where housing were constructed for the poor in the acquired land that were located in the peripheries of the town, maximum houses were rendered unoccupied.
Example: After the passing of the act in 1976, DDA (Delhi Development Authority) adopted it and acquired vast land under the pretext of future and crucial development. Majority of the land were the areas that were illegally occupied by the slum dwellers. By 1982 the number of households in the squatter settlement had increased to a record number of 113,000, majorly due to the shifting back of the slum dwellers who had been relocated as a result of the government’s initiative to provide housing.
• The development in the housing front came to a halt and even if any housing project was started, the probability of being benefited from it were very low due to the high prices. Actually of all the housing projects started under the motto of social benefit for the poor only few saw the completion and of those few only some were actually allotted the target group. Taking the example of the DDA again: During the year 1981-2000, it was expected that DDA would put 160,000 housing units into the market of which 70% was to be allocated to the poor, but it saw the construction of only 55,000 houses and of which only 58% was given to the urban poor.
• Thus the attempt of the act to create a ceiling and put a control on the land holding for a greater social and economic equity rather created a further divide and pressure on the land market, meanwhile further triggering the process and impacts of speculation.
6. Repeal of ULCRA: a solution to the problem?
Upon realization of the failure of the purpose, ULCRA was repealed in the year 1999 by the Union government as an act of solution to the problems and weak links of the previous act. Currently for any urban areas to get funds under JNNURM, the act has to be repealed. The repeal of ULCRA aims to achieve certain targets such,
• Reviving the supply of land back into the market for transactions.
• The efficient supply would mean comparatively easy availability of land which would be of lower price in comparison to land available under previous act.
• Appropriate compensation became a possibility as land owners or the farmers having land in the peripheries could negotiate on the price of the land based on its’ potential and not under the pressure of certain set of non-relatable laws.
According to a DNA report by Prabhu, Chandrashekhar, dated 25th June 2006, repeal of ULCRA resulted in the release of 18,000 acres of vacant land in Mumbai. An approximation of the reduction in land prices from 30% to 40% was also taken.
But like every acts and regulatory framework, there is always a not so hidden loopholes or drawback attached to it.
• Like its’ predecessor, the red taping (favoring people from high social and economic group) became a major hurdle in execution of the act up to its full potential. An attribute of biasness became associated to it.
• There were questions on the fate of the land that would be released once the act is repealed. As seen in the practices that government agencies had been and is adopting for implementation, monitoring and dispersion of facilities that is much skewed towards the power houses of the country, there were apprehensions that the acquired land would go to the property banks of the builders, politicians and other corporate leaders.
7. Inferences:
Every schemes, programs, acts and regulatory bodies are introduced with an intention of creating and providing better services, good living quality and a socio-economic equity in the society. Management for the system and regulatory framework is created to implement the program, but an essential part that always is missed out is the contextual consideration and the association of people (inclusivity). Programs like PMGSY (Pradhan Mantri Gram Sadak Yojana) has high success rate compared to many other schemes introduced by the Indian government due to the fact of public participatory approach towards the implementation.
In cases of the economically weaker groups, such as farmers, day laborers, daily wage earner etc. the association becomes undeniably much higher. Much of their livelihood activities is associated to the spaces around their dwelling areas and distance from their workplace. For programs like slum rehabilitation, it is necessary to understand the factor of livelihood.
The ULCRA 1976, a visionary approach towards a social distribution of land and creation of housing for poor and middle income group, failed due to one of the major reasons; it was oblivious to the fact of publics’ association to their property and the livelihood, apart from the issues such as implementation and monitoring mechanism etc.
Many issues of the urban areas could be solved to an extent by bridging the gap and the diminishing disparity that exists in the society between different groups. The desperate measures taken by certain group of people to strive in the cities that are not very merciful to the poor, only worsens and their condition hopelessly stagnates if not get any better.
It one of the articles of India today it was rightly put as, “Never judge a policy by its intent but always assess it by its consequences”. (Ramesh, 1999)