DDA Land pooling policy

Before knowing or getting idea about what actually DDA land pooling policy is one should be clear about what the term land pooling means. Don’t get confused about the DDA word. Here DDA stands for Delhi Development Authority. Land pooling means, the land parcels owned by individuals or group of owners legally consolidate by the transfer of ownership right to agency (related to land pooling) which later transfers the ownership of the property that is land back to the landlords for undertaking of development for the areas as per the prescribed procedure under the provisions of Delhi Development Act 1957.

The first master plan of Delhi was formulated in 1961. According, to this master plan, DDA was supposed to undertake large chunks of land, master plan it and then sell or develop it piece by piece. The Delhi master plan is thought to be largest ever real estate opportunity in the country for demographic demand as well as the administrative commitment which actually triggers the country’s growth.  Earlier, with land prices nominal, this was an acceptable concept. 2021 Delhi’s master plan  which was notified on 7th December, 2007 stated that the land pooling policy would be based on the optimum utilization of resources available, both the sectors either it be public sector or private in land assembling and now even housing which have been added in form of 19.1 chapter of land policy.

In 1980’s phase, this plan faced problem with the rising involvement of private sectors. This situation brought the need of land pooling policy and according to this policy the land owners can be the stakeholder of the development proposed on the land by surrendering their land into the central pool. Once the land has been pooled into governments shed, the land owner of the particular land will get back 40-60% of the total land surrendered as developable land. There are basically two types of land pooling that has been announced till now. The first one is, the land owner having 20 hectare and above land will get back 60% of the land and those with below 20 hectare will get back 48% of land. The percent of land that would be retained by the government (DDA) would be utilized for the growth of infrastructure as well as monetize it against specific purposes as per DDA.

The land pooling policy was approved by Ministry of Urban development on 5th September 2013. This policy means that no selling of property will be finalized without the owner’s consent.

Under the policy, the DDA will be responsible for overall planning and redevelopment of the land while encouraging the participation of the private sector. The private sector, on the other hand, will be responsible for assembling land, which will then be made available to the DDA for redevelopment.

Although DDA hopes to implement the policy soon, it will have to wait for the Delhi government to notify 89 villages as development areas. Before that, the government has to declare 89 of these villages as urbanized.

According to the amendment, in case of any delay in completion of the development by land pooling agency, the DDA shall pay a penalty of two per cent of External Development Charges (EDC) per year for the first two years and three per cent of EDC per year thereafter to the Developer Entities (DE), that is the farmers/land owners, for delay beyond the date of completion of construction by DE or five years, whichever is later till the external development works are completed.

Besides, farmers who are willing to participate in land pooling but are unable to pay the EDC will be allowed to give up a part of the returnable residential land.

The new stock expected to come up in Delhi, as per the land pooling policy, is likely to be priced at Rs. 5,000 to Rs. 12,000, depending on the location. This is in line with prices in the NCR, especially areas such as Noida, Manesar, Sohna. This will, however, not lead to reverse migration. People working and residing in NCR will not automatically shift to Delhi. Neither will IT offices and other corporates. The demand factors will continue to remain the same but prices will stabilize.

No apartments will be delivered under the policy before six years and, therefore, short-term impact looks unlikely. Also, to take the policy through to the operational level, the Centre, the state and DDA need to be on the same page.

What is worth seeing that how the three factors, economic activity, political stability and demand from the existing democracy help developing Delhi as per the new pooling policy!

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