Repeal of Urban Land Ceiling Regulation Act

On 29 Nov 2007 the Maharahstra State Assembly approved scrapping of the Urban Land Ceiling Regulation Act, (ULCRA) in the state. Builders described it as a “red letter day for housing in Maharashtra”. The share prices of real estate companies shot up on hearing the news of repeal of ULCRA but people of Mumbai saw it as yet another blow to their dreams of an affordable house in the city.

The repeal of ULCRA is yet another step in the liberalization of the economy. Land will be held and traded speculatively. It will pave the way for the richest and wealthiest builders and private companies to monopolise all the land and further consolidate their hold over real estate. Affordable housing for the working people of Mumbai and other cities will become an even more distant dream.

ULCRA was promulgated by the Central government in 1976 with the aim of capping the ownership of land in notified urban areas. In Mumbai, any land in excess of 500 sq meters could be acquired by the state government for a social purpose. ULCRA was promoted as a boon to low cost housing.

After 31 years, the Maharashtra government has been able to identify only 3600 acres of land as surplus in Mumbai for acquisition under ULCRA, out of which only 2300 acres have been acquired so far. However, nearly all the owners have challenged the acquisition of their land in the court. After repeal of ULCRA, government is likely to lose out all the acquired land.

The State government used to grant exemption from ULCRA, at its discretion, provided ten percent of houses built on surplus land were surrendered to government. The government was expected to sell these houses to low income families. Builders, however, repeatedly violated ULCRA by selling flats meant for low income housing themselves. The state government has levied penalties of around Rs 1000 crore on builders but has so far collected only Rs 100 crore. So, the state government neither acquired surplus land and built affordable houses for people nor did it insist on surrender of even a small proportion of houses built on surplus land.

If the repeal of ULCRA today exemplifies the reform agenda of the bourgeoisie, the promulgation of ULCRA decades ago exemplified "Nehruvian socialism" – where private property and accumulation by a minority was to be enabled and assisted by the state, but for maintaining the illusion of building a “socialist pattern of society”, such laws were promulgated.

Non-implementation of such regulations was not an aberration but the norm. The law was meant to be violated and the violators were never punished; in fact, there were deliberate loop-holes in the law for the benefit of the rich. That is why under ULCRA "excess" land in any substantial measure was not appropriated by the state to be applied in the service of housing for the working population.

At the present time, Indian bourgeoisie has launched a massive drive to upgrade infrastructure in the cities to make them world class centres. Capital is pouring in from all over the world to make super profits in infrastructure development, and the government has initiated a mammoth program called the Jawaharlal Nehru Urban Renewal Mission (JNURM). ULCRA has been found to be a bottleneck in the way of capital today. Maharashtra has nearly 88 projects entailing an investment of Rs 25,000 crore awaiting the clearance under the JNURM. Due to ULCRA, land owners transferred surplus land into fictitious names and did not use the land. The Central government scrapped ULCRA in 1999 and asked the states to do the same.

The Indian State has totally abdicated its responsibility of providing affordable housing for people. Big bourgeoisie is being encouraged to enter housing and treat it like any other industry for making profit. Foreign capital and large foreign real estate companies are being invited to build large housing complexes, townships and even develop new cities in the country. These big real estate companies need large areas of land and ULCRA was obviously a hindrance for their growth. The repeal of ULCRA by the central and state governments is for promoting the interest of large Indian and foreign companies who wish to enter real estate in a big way and without any constraints.

The repeal of ULCRA is yet another anti-people policy of the present state. It is yet another example of surrendering the interests of people for the benefit of the big bourgeoisie.