Can Haryana’s new licensing policy boost its realty market?

[] The government of Haryana’s New Integrated Licensing Policy (NILP), aims to balance the interests of different stakeholders and ensure smoother and faster land acquisition

The government of Haryana’s New Integrated Licensing Policy (NILP) 2015, was created to be fairer to small land owners, ensure better utilisation of land and result in increased supply of group housing.

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Fair to small land owners

The most important element in the NILP, is that it adopts the transferable development rights (TDR) model. Under this model, a land owner can obtain a TDR certificate, when he sells his land. This gives him the right to undertake development on the parcel of land that is left with him. This development right can also be utilised on another parcel of land, or it can even be sold to a developer in exchange for money. The TDR, transacted between the builder and the land owner, will be at market rates. Thus, the NILP seeks to ensure that the land owner gets the right price and does not have to sell out to the developer at a low price. Even if the land is taken over by the government for public purposes, the land owner will still get his TDR, which he can sell to a developer.

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“The issue of inadequate compensation to land owners that existed earlier, will be resolved by the TDR policy in the NILP,” assures Sanjay Sharma, managing director, Qubrex Realty, a Gurgaon-based real estate consultancy. Any farmer who has more than one acre of land, will be able to obtain a TDR certificate. Experts estimate that the TDR policy will result in 10,000 acres of small land parcels being released for development. Moreover, the policy is expected to make the process of land acquisition in Haryana faster and it may also reduce the chances of litigation.

Parity to smaller developers

The NILP has also relaxed the norms for development of integrated townships. Earlier, a developer needed to aggregate 100 acres of land, to develop an integrated township. Now, the minimum limit has been lowered to 25 acres. “With urban land becoming expensive, aggregating such large parcels of land is difficult for most developers, barring the big ones. Lowering the limit to 25 acres, will allow more players to develop integrated townships,” points out Jaskirat Singh Bansal, MD, Grand Homez, an NCR-based real estate consultancy.

For integrated townships of up to 50 acres, builders have been allowed a floor area ratio (FAR) of up to 1.25. For those above 50 acres, developers can utilise FAR of up to 1.50, by purchasing TDR from small land owners.

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Better utilisation of land

Under the previous norms, of the 100 acres in a residential township, only about 20 acres could be utilised for group housing. Often, the land or plots meant for commercial development remained unutilised. Now, the government has allowed a global FSI of one and density of 250 persons per acre. This means that the developer is free, to use the residential component of a licensed colony for group housing projects. This can be done even after the 20% group housing limit has been met in that sector. This change, will result in the development of more than 2.7 lakh new apartments and will unlock more than 1,400 acres for the development of low-cost housing, opines Rohan Sharma, associate director – research and REIS, JLL India.

While the NILP may be a step in the right direction, its success will depend on its implementation, which, if done well, will certainly improve Haryana’s urbanisation and industrialisation.

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Category: Lifestyle

Debora Berti

Università degli Studi di Firenze, IT

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