Presentation focuses on empowering urban local bodies in terms of its capacity building in the area of raising finance for promoting planned development of the urban areas and making cities self-sustaining by providing basic services and quality of life to even poorest of the poor of its resident to lead a dignified life. Land needs to be treated as a gift of nature and not traded as a commodity for commercial use. It should be used to meet the basic human needs and not human greed.

1. Monetization of Land
as a Resource for
Urban Local Bodies
in Tamil Nadu
Ar. Jit Kumar Gupta
Former Advisor
Town Planning
Punjab Urban Development Authority
E Mail- jit.kumar1944@gmail.com

2. Global Context of Cities

3. Indian Urbanization
• 250 million in 1919
• 1210 million in 2011
• 2050- Indian population- 1600 mil. -- 50% in
Urban India.
• Metropolitan Centres -5 (1951)- -53 (2011)-
68(2031)
• 10 m plus- nil (1951)- 3 (2011) -7 (2031)-9
(2051)
• During last 100 years, India witnessed—
- -Urbanization level going up by 3 times
- --Urban settlements growing merely 4 times
- --Total Population multiplying 5 times
- -Urban population increasing 15 times and
- -Rural population increasing 3.5 times
- India becoming most populated country on
this planet-2023- 1.4 Billion people

4. Indian Urbanization
• Urban area important because :
 Areas of concentration of population,
 Providers of large employment.
 Areas of large investment.
 Housing major infrastructure & services.
 Hub around which entire economy gravitates.
 Promoters of higher order of productivity
• Major contributors to national wealth/GDP
 1950-51 - 29% (level of urbanization - 17.29%)
 1970-71- 37% (level of urbanization - 19.91%)
 1990-91- 50% (level of urbanization - 25.72%)
 2001-02- 60% (level of urbanization - 27.78%)
 2011- 12- 65% (level of urbanization - 31.1%)
 10 Largest cities house 8%pop/ produce-15%GDP
 53 Metro cities house 13 %pop/ produce 33%GDP
 100 Largest cities house 16%pop/produce 43%GDP

5. URBAN INDIA- 2030-Mckinsey Global Inst-
• India Urban Awakening :Building Inclusive Cities-Report-
April, 2010 projects that by 2030:
• 590 m to live in Urban India- twice the US population
• 70% GDP-- generated by cities
• 80% Revenue -- generated by cities
• 4 fold increase-- in per capita income
• 5 times -- number by which GDP would multiply
• 270 million -- net increase in working age group
• 70% new jobs(170 mil)-- generated in cities
• 91 M urban households-- will be middle class--up from 22 M
• 68 Cities-- will be Metropolises-Europe has 35 only
• $ 1.2T capital-- needed to meet projected infrastructure
demand
• 700-900 million Sqmts- of residential/ commercial area
needed annually- a new Chicago to be created
• 2.5 b Sqmts roads paved-20times created in last decade
• 7400km (350-4ookm/year) of metro needed -20times
created in last decade
• 200 million Rural Indians to benefit-living close to top 70
cities
• 75%urban India to live in bottom segment -earning Rs 80
per day

6. Indian Urbanisation-II
• Urbanization-- determinant /consequence of
economic development.
• Positively related-level of development /
urbanization .
• Urban growth & economic growth-- go hand in
hand
• Cities -- Engines of economic growth.
• Building productive cities-- critical to boosting
rural economy --by improved urban
consumption
• Urban centers need planned development to;
 Attract investment
 Provide Employment.
 Ensure quality of life.
 Promote Sustainability, Productivity,
Livability,
 Ignoring Urban India
 -- will jeopardize growth
 - risking employment generation.

7. •Context of land
in Raising
Resources

8. Historical perspective
• - first municipal corporation in India - Madras in 1687
• - 1726 - municipal corporations set up in Bombay / Calcutta.
• - 1870- Lord Mayo’s resolution for financial decentralization-- paved way for local self-
government.
• Resolution by Lord Ripon- called Magna Carta of Local Self Government,- issued by Lord
Ripon’s Government --on 18th May, 1882.
• Government of India Act 1919, -- local self-government operations-transferred to
ministers responsible to new provincial legislatures.- , gave powers to Councils to elect
chairmen/ frame their own budgets.
• Act 1925- made city municipalities-- population exceeding one lakh-- wholly elective.
• Government of India Act, 1935- introduced provincial autonomy / local self-government
declared as a provincial subject.
• 1948- GOI appointed committee- Local Finance Inquiry Committee- to report on ways/
means for improving financial resources of local bodies.
• 1985, -- National Commission on Urbanization - appointed by t GOI-to study/suggest
mechanism of urban management.
• Constitution (74th Amendment) Act, 1992-- for strengthening local self-government in
cities / towns
• Third tier of government- made ULBs Governmnet in its own Right

10. •Historical
Context of
•Urban Local
•Bodies

11. Land- Urban Context-
• Land - most valuable gift provided by nature to mankind
• -inelastic in nature -- cannot be created / enlarged
• Limited supply of global land
• - 71 % planet area under water
• - 29 % under Land
• - India 2 % ( 32.88 lakh sqkm- 29.73 lakh sqkm- landmass)
• --global land mass-1489 lakh sqkm)-- 17.7 % population(1.4 B)
• - Land – platform for all human activities-.
• - Land play Important role, relevance in
• -- planned urban development
• -- providing basic amenities of life,
• --creating state of art infrastructures
• - generating valuable resource for local agencies / development
• --- 12 th FYP- Working Group on Urban Development- -
recommended promoting land based fiscal tools- for augmenting
financial resources-- for urban infrastructure financing .
• MOUA Report--‘Study of Land Based Fiscal Tools and Practices for
Generating Additional Financial Resources’, recommends exploring
untapped potential of urban development /context of land for making
ULBs self-reliant financially.

12. Land – Urban Context
• Using land-- as basis for raising financial resources,
• - has roots in understanding that ;
• --planned land - commands premium over unplanned land;
• -- land with infrastructure -- priced higher as compared to
land having no infrastructure;
• -- granting planning permission to any land-- increases its
value
• -- land value in urban market -- dictated by permitted
land use -. residential, commercial, industrial etc.
• -Urban Land price-- dictated by demand for land for
development
• Based on these minimal principles-- various options can be
explored/ leveraged,
• -- using urban land as fulcrum,
• --for generating/ raising financial resources at local level,
• -- for funding urban development
• -- enhancing financial status of urban local bodies,

13. Land Based Tools for Raising Resources
 Promoting Planned Development
 Involving Private Sector
 Levying Property tax
 Taxing Vacant lands
 Granting Advertisement Rights
 Betterment charges.
 Charges for change in land use
 Development Charges i.e. Internal & External Charges
 Charging fee for sanctioning building plans
 Using Right to Air space
 Trading Floor Area Ratio
 Adopting Accommodation Reservation
 Using Transfer of Development Rights (TDR)
 Undertaking Town Planning/Land Pooling Schemes
 Levying Compounding Fee on built environment
• Optimum Utilization of Vacant Government Lands (OUVGL
• Levying Parking Charges

14. Promoting Planned Development
• Globally, planned development is valued - best
land-based option to raise financial resources,
• urban planning known to ;
• - promote Planned development of urban areas
• - Provide basic amenities/services
• -- Generate wealth for development agencies
• - makes them self-financing / cash rich
• --helps in levying internal Development Charges
• -- Collecting external development charges
• -- for funding both hard / soft,
• -- internal / external infrastructures in city
• - creation of space for roads and mobility
• - providing open spaces
• - creating space for amenities/services
• - all funded and supported by allottees
• Chandigarh, Gandhinagar, Bhubaneshwar,-
demonstrated planned development – self
financing- generate resources for
cities/authorities/government/people

15. Rationalising Property Tax
• Property tax - most vibrant / effective source of funding urban local
bodies. Mechanism not appropriately utilized.
• Despite lot of reforms - still large leakages in tax base remains
• Reasons for low collection of property tax remains;
• -- absence of data base- Constructed area/uses
• - Lack of documenting all properties constructed
• --cumbersome procedures of levying/defining tax;
• -- lack of qualified manpower for levying/collecting tax;
• --manual driven approach for levying/ collection;
• -- poor maintenances of record,
• - ambiguity of rates,
Encouraging/enabling/empowering Property owners-
- Promoting Self-assessment--Simplify process of
assessment- making area based - depositing tax
- incentivizing compliance -in time – rebate- delay-
imposing penalties -Using Technology for creating data
base/ levying tax/ collected tax/defaulters/arrears
- - Moving from manual driven- technology driven approacj
• Chandigarh MC- Rs 22 crores

18. Tradable Floor Area Ratio
• FAR - used for determining built area which over any land.
• FAR- helps in increasing built space without change in area of land.
• Higher FAR- more built area.
• Increasing FAR- helps generating more revenue
• FAR, globally- a major instrument - for intensity determining
development / increasing the value of land.
• Cities,- where built space in demand
• -- where supply of developed land remains scarce
• --FAR effectively used for overcoming shortage of land / increasing
supply of built space.
• Mumbai-demonstrated- strength /potential of generating large land-
based resources.
• In India, potential of FAR used in limited way,
• where maximum FAR placed at 3 or 4,
• in developed countries – FAR rated as high as 20 in big
metropolises
• Need for rationalizing FAR in few pockets - levying rational charges
for higher FAR
• Need to review FAR on periodic basis - without causing undue
congestion and - overloading infrastructure

19. Taxing Vacant Lands
• Speculation in land -- gained enormous currency.
• Process - put on hold large quantity of serviced urban land.
• In certain cities 25-35% of land/ 17% of housing stock
remains vacant for obvious reasons.
• Bringing vacant/unused land into urban market/end
speculation/underutilization of developed land-- desirable to ;
• --tax owners
• -- Tax liability – deterrent for keeping land vacant.
Taxing Vacant land-- Serve dual purpose ;
• -- beings land into urban market
• --generate resources,
• --Rationalizing land market.
• - Make land prices stable
• - Optimum utilization of land
• - Optimum utilization of municipal services
• - Process already followed in Development Authorities-
• -- PUDA imposed extension fee on-- vacant plots after three years
of allotment-- @ 2% of current allotment price- Extension fee
• --Resulting in rapid construction on plots lying vacant for number
of years
• generating lot of resources
• -- Financing infrastructure for city

20. Land Pooling- Town Planning Scheme
• Town Planning scheme finalized-
• -- with final plots distributed to land owners
• --by charging betterment levy
• -- from those who have gained by reconstruction of plots
• -- by paying compensation to those who lost land.
• Entire process involves
• --pooling of land
• -- involving land owners.
• - promoting planned urban development-
• - without acquiring land proposed for development
• - without involving any expenditure on land acquisition
• - Without investing any expenditure on development
• -Self-financing /self-sustaining
• - making available land for roads free of cost
• - makes available public open spaces
• - creating public infrastructure for city
• -making farmers co-parceners in development process
• - Making available land for public purpose to public
authority free from all encumbrances
• - Ahmedabad 76 Kms Ring Road funded / created by
Land pooling process

21. • Sardar Patel Ring Road -- 76 km long ring road encircling Ahmedabad,
• Toll road built by -- Ahmedabad Urban Development Authority (AUDA).
• Built at a cost of ₹3.55 billion,
• opened in 2004- Toll collection 98 crores in year 20-21-
• AUDA demarcated --a region of 1 km around road—
• --residential affordable housing zone
• -- to improve affordable housing.
• - Greening City - 200 hectares of green public space -241 Parks

22. Optimum Utilisation of vacant Municipal Land
• -Lot of valuable municipal land
• - remains unused/misused/abused and
• - locked in inefficient uses in urban areas
• -- in shape of institutions/ buildings etc.
• --State of Punjab
• - already launched a scheme called,
• - ‘Optimum Utilization of Vacant Government Lands
(OUVGL)’,
• -- under which all unused /under-used potential
public lands
• -- identified, planned, developed and disposed of for
housing/commercial purposes leading to
• -- generating resources
• - for state infrastructure development
• -- also brought land into urban market.
• -- helped in protecting land from
squatters/encroachers
• - Creating a land bank for municipalities
• - Creating a data bank of Municipal land- for
monitoring/optimum utilisation

23. Leveraging Advertisement rights
• Advertisement rights ;
• - Current era- era of advertisement
• -- fetch enormous revenue for ULBs for
• --Creating /maintaining urban infrastructure –
• - By granting right to advertise to private advertisers--
receiving money for such rights
• - including Planning/development/ maintaining
• --Open spaces - Chandigarh
• - Traffic rotaries -roundabouts in cities- Chandigarh
• --- local bus stops - Delhi
• --creating dumping yard for collecting waste- Delhi
• -Planting of roadside trees- Ludhiana
• -Street- light poles -- used for advertisement.
• Enacting Advertisement Controls Order
• -- identifying appropriate spaces for advertisement,
• --mapping sites for advertisement, --specifying - hiring
experts for identifying spaces
• - evaluating potential for strengthening revenue base.
• --- allotting through a transparent bidding process,
•

24. Imposing Betterment levy
Levying betterment charges, has genesis in;
-- increase in land values, of private properties due to
--Establishment of Improvement Trusts in early
twentieth century &
- -- development projects/activities undertaken by them
- Involves right to share part of increase in
land values
- depending upon extent of benefit accrued/
increase in land values
- Despite forming part of municipal legal framework,
- -Betterment charges-- have not been levied/charged
- -- lack of will of parastatal agencies/state government
- difficulty in precisely quantifying
- If levied/used logically/ rationally,
- Betterment charges to emerge as potent option to
leverage financial resources in urban areas.

25. Change of Land Use
• Cost/Price of land intricately related with
• - location/ potential of area/ use of land
• Change of land use - invariably leads to
increase in Urban land prices,
• Change of land use charges levied
• --when land -- used for developing
agricultural land into--
residential/commercial/ industrial use
• --Power to change of use of land -- falling
within urban limits- to vest with ULBs.
• For making operational mechanism would need ,
• -- Creating a legal framework
• -- prepare Development Plans
• - Defining conversion charges
• - Rationalising Land use charges
• . Undue charges lead to non-compliance of
• --law promoting unplanned/illegal development

26. Charges for Approving Building Plans
• Building Plan approval fee
• -- one of most vibrant sources of income
• -Ever evolving/devolving
• - never static /never finite
• - depends upon how vigilant is local bodies
• -Cost of approval varies for;
• - residential area,
• --commercial,
• -- industrial and
• -- institutional areas.
Cost levied for;
- Sanctioned plan
- -Superseded pan
- -Revised Plan
- - completion certificate
- -- occupation certificate.
• Compounding charges
• - Need properly trained/skilled manpower-
transparency/ rational charges

27. Charging Compounding Fees
• Compounding fee charged for;
• - regularizing minor violations- of building rules.
• - violator pay defined fee
• - for regularization of construction
• - which otherwise require demolition.
Option exercised with caution- compounding
violations-- which don’t impact planned development
• Charging compounding fee need ;
• -- well defined,
• - transparent and
• --rational policy
• - to optimize returns
• -- otherwise leads to—
• -- major violation of building rules
• --emergence of corrupt practices within
organization.
• - Introduction of self Assessment of compounding
fee

28. Public-Private Partnership
- Considering limitations of public sector-
- Resources
- -manpower
- -expertise
- Technology
-- necessary to encourage private sector
-- in large-scale
--assembly development / disposal of land
--provision of infrastructures
- to supplement efforts of public agencies.
Haryana State taken a lead
-- by evolving a comprehensive/ effective framework
- for sanctioning of colonies,
- bringing lot of reputed builders in urban centers
. Haryana model needs replication with modifications
-- for attracting developers in Tamil Nadu
- Private developers helped in
-- promoting orderly growth
- Generating financial resources
- making available large number of plots
- - for urban poor
- --at affordable price

29. Charges for Air Space Rights
• Future Source of generating Revenue
• Example of railways using air space rights
• in Navi Mumbai – helped in
• -- generating revenue
• -- creating state of art infrastructure / railway
stations
• - creating Space for construction of offices /
commercial spaces,
• -- Generating revenue on perpetual basis.
• Accordingly,
• -- mechanism of air space rights
• -- need to be innovatively used /optimized
• -by ULBs on its land
• - for promoting development
• --to generate resources

30. Levying Development Charges
• Development Integral part of city/land development
• Development charges include- cost of making provision of;
• - Internal Development
• -External Development
• Services include;
• - water supply, sewerage, road network, storm, water drainage,
electricity etc.- networks of services /amenities etc.
• -- social infrastructure- healthcare, education, community
centres, parks etc.
• -- Internal development works carried out within defined
area-- by Promoter/developer
• - whereas cost of external development (city level services)
deposited with ULBs.
• - Entire development
• -- funded through development mechanism
• -- without being loaded on local body.
• - Costs ultimately passed on to
• -- plot holders by
• - making part of cost of plot which is allotted to them

31. Accommodation Reservation
• Concept used in Mumbai/Maharashtra
• Accommodation Reservation
• -- land-based concept where
• -- owners allowed to use full potential of
construction on land
• -- based on defined FAR
• -- on portion of land-
• -- surrendered to local body for public use.
• -- In this mechanism;
• -- local body gets access to land/ infrastructure
• -- without paying any cost for land
• - made applicable for public infrastructures -
community centre/ health centre /fire brigade etc
• whereas owner does not lose
• - entire land and
• - enjoys full FAR on remaining land.

32. Transfer of Development Rights
• Concept used largely in Maharashtra/Mumbai
• -Under which-Right to Land
• - separated from Right attached to Land
• -Land required for public purpose- roads etc
• - taken over by local body
• - whereas owner given
• -Development Rights on said land
• -in the form of a cheque
• -- of full potential of land
-- as FSI- to be used at any other designated place.
-- where owner holds land
--if owner does not want to use said development right
-- Free to exercise - right to sell
-- in market-- to any other developer.
-- TDR can be traded like shares and
-- sold to anyone who wishes to use it.

33. Parking Charges
• Only 10% time – vehicle on move
• Rest 90% time – stationery
• -Parking remains important component of urban
mobility
• Increasing number of vehicles- create problem of
parking
• Institutional/ commercial areas also faces
problem
• Charging Parking fee – another source of income
• Need for rationalizing parking charges
• - Most visited place- with less parking space -
need higher parking charges
• - Parking fee charged based on- parking time /
class of vehicle parked /place of parking/time of
parking- peak/non-peak hours
• - Creating dedicated spaces for parking during
working hours/ near housing in off- office hour
• Creating an app – for availability of parking-

38. WAY FORWARD….
• Preparing inventory of Urban land--Mapping all
land falling within urban lists
• Creating a data bank of existing buildings--
constructed in city including;
• -Location
• -Plot area
• -number of floors
• - total covered area
• - use of residential/commercial/industrial etc.
• - area under different uses
• - Typology of construction
• - ownership
• - Year of Construction
• - Year of approval
- Mapping all new construction
- - ensuring all building constructed legally
- Specifying rational policies/programs for
Property tax/ change of land use/ vacant land
tax/Advertisement charges/compounding fee etc
- --Involving communities in planning/development

39. WAY FORWARD….
• Involving private sector in planned development/
infrastructure development
• Mapping all urban infrastructure.
• Preparing Master Plans/Development Plans for city
• Creating ownership of Master Plans
• Having authority to undertake land pooling scheme
• Rationalizing Building Bye-laws
• Leveraging technology
• Having dedicated department for buildings- mapping,
plan approval, identifying illegal construction
• Levying Parking Charges
• Mapping good urban practices
• Bringing all urban local bodies on same platform
• Promoting research in reinventing land based fiscal
tools
• Exploring potential of Floor Area Ratio
• Creating a land bank
• Creating assets yielding dividends on regular basis
• Using technology- for bringing operational efficiency,
economy, time efficiency, minimizing manpower,
lowering maintenance cost , ensuring quality,

40. THANKS
FOR YOUR
Valuable
TIME