"For the transformation of Mumbai, the State needs Rs 40,000 crore over the next 10 years. Of which, we are seeking Rs 10,000 crore from the Union Government. Therefore, if we don't repeal the Act, major infrastructure projects in the city could be affected."

Rahul Wadke

Mumbai, Jan. 20

THE Maharashtra Government is expected to take a decision shortly on repealing the Urban Land Ceiling Act (ULCA), a senior Government official today said.

The Act was enacted in 1976 to impose a ceiling limit on vacant land in urban areas.

However, the actual legislative procedure of repealing the Act would take more time, the official said. Unless the Act is repealed, the State Government stands to lose over Rs 1,100 crore in the coming fiscal, from the Union Government under the Jawaharlal Nehru Urban Renewal Mission (JNURM). Repealing ULCA is a precondition to receive funds under the JNURM.

The Union Urban Development Minister, Mr S. Jaipal Reddy, said on Thursday that Maharashtra stands to lose funds if it does not repeal the act.

All States, with the exception of Maharashtra and West Bengal, have agreed to repeal land ceiling laws.

"For the transformation of Mumbai, the State needs Rs 40,000 crore over the next 10 years. Of which, we are seeking Rs 10,000 crore from the Union Government. Therefore, if we don't repeal the Act, major infrastructure projects in the city could be affected," the official said.

Non-compliance with the JNURM requirement could lead to significant delays in major projects such as Mumbai Trans Harbour Link costing Rs 3,500 crore, Mumbai Metro Project with an estimated cost of Rs 20,000 crore, Bandra-Worli and Worli-Nariman Point sealink costing Rs 4,200 crore and Mumbai Urban Transport Project (MUTP)-II costing Rs 3,600 crore.

The MUTP-II project aims to reduce the peak time congestion in local trains by 50 per cent, reducing headway time of local trains to 3.5 minutes and separate tracks for outstation trains, the official said.

The ULC Act was introduced in 1976 with the intention of preventing hoarding of land in private hands and facilitating the government in executing social and common welfare schemes. The law was scrapped by the Centre in 1999. However, land being a State subject, Maharashtra has still held on to the law. With the scrapping of ULCA many land tracts in urban centres of Maharashtra would open up for development, which could have a major impact on the real estate prices.

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(This article was published in the Business Line print edition dated January 21, 2006)
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