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Differences Between Transferable Development Rights in Karnataka and Maharashtra

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Pingal Khan [with inputs from  Mr. Sankarshana Meeyala, of the National University of Juridical Sciences who is presently interning at PXV, Bangalore]

The past decade has borne witness to massive scales of development in the Indian cities. However, simultaneous to this development has been the rise in population, which continues to soar to uncontrollable levels. An obvious consequence of both of the above phenomena is the pressure on the already scarce land area required for purposes of public utility. In the face of such scarcity, there has been a need for a method to resolve the problem of acquisition of land by the Government for the development of infrastructure for the benefit of the public. In such a situation, Transferable Development Rights have come forth as a truly innovative idea, promising a win-win solution to both the land owners, and the Government.

Introduction:

Transferable Development Rights (TDR) is a mechanism to facilitate the hassle-free acquisition of land for infrastructure development activities like road widening, metro rail projects, etc. It essentially involves two parties- the government, which wishes to acquire the land on one hand, and the owner of such land on the other. Under the TDR scheme, the government can acquire the land (whole or part) from the land-owner in exchange for development rights which are transferred to the land owner. The advantage that such ‘development rights’ offer becomes clearer with an understanding of the floor area ratio (FAR) or floor space index (FSI).

FAR or FSI is the ratio of the total floor area of a building on a certain location, to the size of the land of that location, or the limit imposed on such a ratio. TDR effectively allows developers to exceed the FSI or the FAR of the land, allowing them to build additional floors in a building.

The TDR can be used by the land owner on the remaining portion of the land, which he retains after the acquisition, or it can be utilized on any other property of his choice. He can also trade it to other parties for an agreed sum of money. An acquisition in the above form entitles the land owner to a Development Rights Certificate (DRC), which he may use for himself or transfer to any other person, as the case may be.

The process of land acquisition in urban areas for public purpose, especially for road widening, is complicated, costly and time consuming.  In order to minimize the time needed and to enable a process which could be advantageously put into practice for acquisition of land, the system of TDR was introduced. Not only does TDR make the process of acquisition informal, it also reduces the burden on the State exchequer and promotes development. Furthermore, TDR allows the landowners to separate the right of ownership of the land from the right of its development.

Statutes:

Mumbai was the first city to introduce TDR in India, in 1991, based on the model followed in the city of New York. TDR is governed by the Mumbai Regional & Town Planning Act, 1966 and the relevant authority at present is the Mumbai Metropolitan Region Development Authority.

The provisions regarding TDR in Bangalore are provided in the Terms and Conditions for the Grant of the Transferable Development Rights, created under the Karnataka Town and Country Planning Act, 1961, via Notification No. UDD 154 BEM RU PRA 2004, dated 18th January, 2005.

Distinctions between the laws applicable to TDR in Maharashtra and Karnataka:

The distinctions can be broadly categorized under the following three heads.

1.     Utilization-

Mumbai

In Mumbai, a TDR issued from a generating site is allowed to be used only in receiving sites that are to the north of the generating site. For example, a TDR issued in low value areas such as Mankhurd can be utilized in high value areas such as Bandra because Bandra falls to the north of Mankhurd on the map. Many developers have come forward to redevelop slums in Mankhurd owing to the lucrative propositions of carrying our development in areas such as Bandra. For the utilization rules for each zone, refer to Table A.

TABLE A

DRC Generation Zone

Utilization Zone

Zone 1 In any Generation Zone
Zone 2 In Generation Zone No. 2 and No. 3
Zone 3 In Generation Zone No. 3

 

Bangalore

In Bangalore, a Development Rights Certificate (DRC) issued for a generating site in one Zone is allowed to be utilized in a site situated in any one of the Zones. However, the utilization of TDR is subject to the ratios prescribed by the Terms and Conditions, as explained in the table below. If the generating site is situated in Zone A, then it can be utilized on a receiving site in Zone C for twice its value (in other words, multiplied by a factor of 2). Conversely, if a generating site is situated in Zone C, then it can be utilized on Zone A for half its value (in other words, multiplied by a factor of 0.5). For the detailed ratios for each zone, refer to Table B.

TABLE B

DRC Generation Zone

Utilization Zone

A zone (Ring I) B zone (Ring II) C zone (Ring III)
A zone (Ring I) 100 x 1.00 sq. ft 100 x 1.50 sq. ft 100 x 2.00 sq. ft
B zone (Ring II) 100 x 0.666 sq. ft 100 x 1.00 sq. ft 100 x 1.333 sq. ft
C zone (Ring III) 100 x 0.50 sq. ft 100 x 0.666 sq. ft 100 x 1.00 sq. ft

 









2.       Records-

Transparency is of great importance in TDR because of the number of interests associated with it. Interest groups range from municipal corporations, developers, Chief Ministers, urban development departments in state government as well as central governments to citizens who seek to profit from TDR in various ways including eviction of tenants and regularizing irregular constructions.

Mumbai

In Mumbai, where TDR is issued for various purposes, the municipal corporation does not keep a record of how much TDR is issued in each category, how much has been used, where it has been used and how much is the remainder. Such a lack of record keeping can lead to unrestricted and unauthorized constructions.

Bangalore

In Bangalore, The Authority (Bangalore Development Authority when the TDR is generated by a plot/land located in BDA jurisdiction and Bruhat Bangalore Mahanagara Palike when the TDR is generated by a plot or land located in BBMP jurisdiction) is mandatorily required to maintain a register relating to grant and utilization of Development Rights. This not only ensures that there are no illegal or unauthorized constructions, but also ensures that immaculate records are kept by the governing authorities.

3.     Types of TDR-

Mumbai

The Maharashtra Government issues various types of TDRs. For instance, reservation/amenity TDR is issued in lieu of property surrendered for development of public amenities; Slum TDR is issued when the owner of a property or a developer comes forward to re-house slum dwellers on that property, free of cost; Heritage TDR is awarded when the original property is public heritage; Cess TDR is given to developers who make improvements on existing dilapidated structures.

Bangalore

The Bangalore Authority makes no such distinctions, and issues only one type of TDR for all such acquired lands, irrespective of the type of land and where it is situated.

Conclusion:

While the concept of TDR is highly innovative, it also requires strict regulation by the Authorities in charge. However, TDR scams have tarnished the reputation of these authorities. In this light, it is shocking to see that the Mumbai Metropolitan Region Development Authority keeps no records of the TDRs being issued, as it is reflected only on the DRCs.

Furthermore, a great deal of confusion continues to prevail among the people as to the rules and regulations regarding TDR. There has to be a concerted effort by the Authorities in educating the citizens about the advantages, procedures and benefits that they can derive from Transferable Development Rights.

In conclusion, it is admirable that the Authorities have introduced TDRs in their respective cities, even though the concept was primarily used in countries like the United States. It is certainly a step in the right direction, leading to uniform development across the city and preventing congestion in the central areas of cities.

It is  possible for the various authorities and State governments in India  to adopt the TDR route for  cost effective and less controversial land acquisition. We will study the possibility of use of TDRs outside urban metropolitan area in a future post on  land acquisition issues in a future post.

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