AP may repeal Urban Land Ceiling Act

Hyderabad, April 19 | Updated: Apr 20 2005, 05:30am hrs
The Andhra Pradesh government is likely to repeal the Urban Land Ceiling Act (ULCA), enabling massive development and construction activity within the municipal limits. Ths follows the recent Cabinet decision to amend the municipal law allowing high-rise buildings in the posh Jubilee and Banjara Hills areas. The proposal would benefit over 117 municipalities in the state.

Besides it gives a direct benefit to the government to appease the World Bank to obtain Rs 1,400 crore for development of urban infrastructure, say officials.

The government has already made town-specific proposals to improve the urban infrastructure - sewage, water and internal roads. Incidentally, the World Bank had also asked the government to amend the Rent Control Act and also reduce the stamp duty for registration of property. At the same time, Dr Reddys government does not want to be a target of criticism by its opponents that it is going by the World Bank conditionalities, as it happened in when amendments were made to the free power policy to agriculture.

Officials claim that the repeal of ULCA is not to satisfy the World Bank, but to get the necessary funds from the Centre from its urban infrastructure fund and also to attract foreign direct investment in the real estate sector.

Further, the government also plans to encourage development of open spaces within the municipal limits, which mostly are being used as function halls by the public. The construction industry can also get enough space within the municipal limits to build shopping malls and entertainment towers including multiplexes, said a major builder. "We have been demanding this with the government for a long time but it felt that this would result in loss to the exchequer. If they do it at least now, it would be a boon to every one," says a big builder. According to sources, the government is working hard to convince the World Bank to get financial support for its pet irrigation projects besides the fourth round of Structural Adjustment Loan (SAL) to the tune of Rs 1,900 crore in the current year.

"This year the government is expected to get SAL funds and also funding for the irrigation projects," say officials.