Regularisation of unauthorised colonies helps governance, but also creates a moral hazard

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Published: October 25, 2019 2:56:05 AM

While the Centre has done well to leave out those built on forest land, it also needs to ensure that it can bring all the landowners within the tax net.

Most of the colonies that are being regularised house people in the lower income brackets, so, there is no capture of land by the well-heeled, like regularising a Sainik Farms would have meant.

Given that there are over 40 lakh people in Delhi—one-fifth of the national capital’s population—who reside in unauthorised colonies, regularisation was a carrot that any political party could dangle to elicit votes. The BJP-led Union government’s announcement that 1,797 unauthorised colonies in Delhi will be regularised has to be read with this in mind, as should the state government’s enthusiastic welcoming of the decision. The regularisation move will mean that those who had constructed houses illegally will now become the legitimate owners of the land.

Although, from a governance perspective, regularising colonies might seem sensible—the Delhi Jal Board had announced an amnesty scheme for these colonies last year to cork rampant pilferage of water—periodic drives create a moral hazard. Most of the colonies that are being regularised house people in the lower income brackets, so, there is no capture of land by the well-heeled, like regularising a Sainik Farms would have meant. But such regularisation encourages the development of more unauthorised colonies by builders.

The government norms for construction are quite limiting, leading to very high real estate prices in legal colonies; housing thus has become unaffordable for lakhs of people. Regularisation without any penalties deters people from buying authorised land, and paying taxes.

Past regularisation efforts show that government record as far as the collection of taxes is concerned has been low. While the Centre has done well to leave out those built on forest land, it also needs to ensure that it can bring all the landowners within the tax net.

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