ICRA: Delhi’s Land Pooling Policy to result in creation of 2.9 million dwellings for economically weaker sections


New Delhi, May 31, 2017: Delhi Government’s notification to declare 89 rural villages out of the 95 rural villages as urban villages is a big boost for the operationalisation of the Land Pooling Policy in Delhi. With an estimated 55,000-57,000 hectares of land expected to be unlocked, ICRA estimates the policy to result in the creation of around 2.9 million economically weaker section (EWS) dwellings with an average size of 30 sq mt.

As per the Land Pooling Policy, the landowners can deposit their smaller chunks of land in a central pool to make a bigger and more integrated land parcel. Infrastructure facilities will be developed on this pooled land through private participation, within the framework of the Master Plan of Delhi (MPD), 2021 and respective zonal development plans. The owner will be returned a part of the land in accordance with the land pooling category in which the land is initially pooled. The remaining portion of the land will be retained and developed by DDA. The land use distribution at the city level for the urbanisable areas in the urban extensions would be as per the norms laid out in the MPD, 2021. Further, the land pooling model proposes that there would be two land pooling categories – Category I for 20 Ha and above and Category II for 2 Ha to less than 20 ha.

The Ministry of Urban Development and DDA had notified the operational guidelines for implementing the land pooling policy in May, 2015. DDA was awaiting notification from the Government of NCT of Delhi to classify the agricultural area within the proposed urban extensions as ‘urbanisable’. With this notification, DDA will be able to operationalise the land pooling policy.

ICRA believes the said notification of the Government will have multiple positive impacts over the medium to long term. Foremost being the participatory nature of the policy. Moreover, litigations on account of issues like compensation have gained ground over the last decade, which the Land Pooling Policy intends to address equitably for the stakeholders.

The policy is further expected to boost housing construction. The increase in the housing construction is expected to lead to significant job creation in the construction sector. With around 59,835 Ha to 73,750 Ha in built-up area expected to be developed over the medium to long term, there is a huge potential for growth in the housing construction. Moreover, ICRA expects the creation of a housing stock will underpin the affordability for the common man as influx of such huge inventory of houses will keep the prices under check.

According to Shubham Jain, Vice President & Sector Head: “With many positive facets like participative development, employment generation, increase in housing stock and rationalisation of real estate prices, the Land Pooling Policy is a big positive for the real estate sector in Delhi. Given the multiplier impact, we expect overall pickup in investments and economic activity. Moreover, it will facilitate in achieving the vision of the Central Government of attaining ‘housing for all by 2022.”

Notwithstanding the enthusiasm and positivity surrounding the current Land Pooling Policy given its perceived advantages, the implementation of the policy will be crucial in attaining the expected benefits. Given that the development of an area and setting up housing is a long drawn process, some of the potential challenges that may arise will range from acquisition of left out land pockets, political risk, execution risk, issues due to differences in land valuation and timely development of basic infrastructure by the authority.

Corporate Comm India (CCI Newswire)