Good riddance — Urban lands freed from a dark legacy

The Union Cabinet’s decision to repeal the Urban Land Ceiling and Regulation Act (ulcra) will be widely welcomed. It was a poor piece of legislation passed during Indira Gandhi’s Emergency as one more attempt to demonstrate that her heart was with the poor and the landless. In the 20 years it has been in force few of the objectives behind the Act have been achieved. The amount of land actually released for development or acquired by government is a fraction of what was said to be available. State governments lacked the commitment to make the ULCRA work. Moreover, holes in the legislation ensured that most of the land which notionally stood above the ceiling was either never declared or frozen in endless legal disputes in court. In the end the ULCRA has come to be one of the major impediments in the way of urban development and an instrument of bureaucratic harassment. Neither those who were promised low-cost houses nor business and industry whose expansion plans ran aground gained much. The only people to mourn its passing will be corrupt politicians, builders and officials who inevitably found ways to manipulate its provisions to benefit themselves.

With the ULCRA gone, what’s next? The intention to leave it to State governments to draw up their own legislation is good in principle because land is a State subject and needs and objectives vary from area to area. There is vague talk in the corridors of power of preventing monopolistic acquisition of land but no clear indication of how this is proposed to be done. Replacing central ceiling setting with State ceiling setting is not the answer. Each State government needs to draw up land use policies for the short and longer term in line with its perception of economic and social priorities and then to support these policies with appropriate legislation. Unfortunately, not even so-called advanced or forward-looking States like Maharashtra or Karnataka have come anywhere near putting rational land use policies in place. It is best left to the imagination how the politicians of Bihar, for example, will decide to deal with huge urban landholdings.

It is a delusion to think that scrapping the ULCRA is sufficient in itself to make land available at lower prices and in the quantities and locations where it is most needed whether for infrastructure development, housing, commercial or recreational purposes. In the first place, some proportion of identified surplus land is tied up in litigation and will remain so for decades after the ULCRA is repealed unless some remedies are found.

Secondly, something needs to be done to prevent valuable urban land remaining vacant and serving no public purpose. One measure commonly used in other countries is to tax vacant land according to its potential. This would leave landowners the choice of withholding their land at a price, using it productively or putting it on the market. By applying this measure equally to the Central and State governments and public sector corporations which sit on vast underutilised tracts of urban land, the challenge of providing shelter to low income groups can be met.