The special projects, launched as an integral part of Maharashtra’s housing policy, were permitted FDI and provided infrastructure at concessional rates. But while they appear attractive, the implementation and monitoring leaves much to be desired
When special townships with a minimum area of 100 acres launched their ambitious projects in Pune and Nagpur in 2008 (Mumbai does not have such a large, uninterrupted area), as a sequel to Maharashtra's new housing policy of 2007, some queries posted on various blogs revealed the nervousness of investors, specially those residing abroad.
A question about whether these townships would live up to their claims, received the following answer: "These townships provide infrastructure like roads, water, electricity, essential conveniences and security… If you value these things then you should go for it. Of course, there is a risk. What if these promoters are not able to run these townships? Because builders are not service providers, they build and sell, but they do not have experience of managing even the small township projects."
Another NRI asked: "How are they going to supply water and electricity at Xxxx and Xxxx? What's the source? Is that sustainable over the long term? Example, if they are going to bore wells, would they not dry over a few years? I heard Xxxx is going to supply water from the river. How can they purify and certify that? I am thinking of returning to India in the near future. By that time I would have spent about 13 years in the US and I do value a cleaner environment, quieter neighborhoods, infrastructure and amenities… But as you know, being so far away and out of touch, it is hard to guess how much is going to be delivered."
These concerns have now become reality, for in Pune, information received through the Right to Information (RTI) Act reveals, that while there seem to be many developers claiming their projects to be townships, in actuality only seven are legally 'special townships'. However, thanks to the Pune Collector not monitoring whether these seven have fulfilled the stringent conditions required for a special township, the public does not know whether these fully abide by the required norms.
So, what is the mandatory requirement under the Special Townships scheme? It has to be an integrated township with space for residential, commercial, educational, amenity spaces, health facilities, parks, gardens, playgrounds, basic amenities and public utilities.
Infrastructure facilities specifically include: (a) Water supply. The developer shall be required to develop a source for drinking water (excluding ground water source) or get a firm commitment from any water supply authority to meet the daily requirement of 140 litre per person a day. This excludes water required for fire-fighting and gardening. The storage capacity provided should be 1.5 times more than the requirement. (b) Drainage and garbage disposal. Environment-friendly disposal of sewage and solid waste management as per the norms of the state pollution control boad. (c) The developer shall ensure continuous and good quality power supply through captive power generation, or draw from the existing supply system. (d) The developer must get an environment clearance certificate from the Union Ministry of Environment and Forests (MoEF). (e) Twenty per cent of the area is to be reserved for park/gardens/playgrounds. (f) Eco-friendly amenities like solar water heating. (g) 60% of the area to be purely residential and out of the total floor area proposed to be utilized for residential development, 20% of the same to be used for residential tenements of 40 sq m. (h) Proper road area with the main road being 24 metres wide.
Are all the above conditions that are mentioned in the commencement certificate by the authority, fulfilled by the developer of such townships? In the case of Pune, queries under the RTI revealed that the Collector's office in Pune does not monitor whether the developer adheres to the norms for special townships or treats the project as just another mundane housing society, albeit more expansive.
RTI activist Vijay Kumbhar, who invoked the RTI on the issue, says, "Last year, I noticed that a hill was being cut at Ghotawde in Mulshi. On enquiry, I found that it was for the construction of a large township, on over 550 acres. However, I could not lay hands on the permission given to it by the collector's office, although the website declared it as a special township. Later on, wary of the information I was procuring, the developer changed it to IT cluster, with residential area thrown in."
Suspecting that potential buyers—particularly those staying abroad—are being cheated under the garb of `special townships' Kumbhar filed a RTI application under Section 6 asking for the number of sanctioned special townships in Pune. He demanded a list of special townships which have been given permission and proof of action taken against violation of stringent norms under special township rules. Also, this information should have been suo moto put up by the collector's office, under Section 4 which was not done. He filed a complaint under section 18 of the RTI Act to the State Information Commissioner, Pune region, Vijay Kuvalekar, pleading that the Collector and the Public Information Officer (PIO) be penalised for not abiding by norms under section 4.
The Information Commissioner ordered the collector to put the information on the website, failing which the collector, the PIO as well as the tehsildar would face penalties.
Surprisingly, and quite suspiciously, it took the Collector six long months to put the information on the website, despite the fact that the matter was of great public interest. According to the information put up, there are seven sanctioned townships in Pune. They are: Amanora Park, Nanded City, Blue Ridge, Kumar Ekluch, Riverview, Gulbakshi, Pearl Eiffel City. Mr Kumbhar, who has procured copies of the commencement documents of these projects, says, "All these commencement documents given by the Collector clearly state that the developer can begin work only after procuring environmental clearances and showing proof of how they are going to put the infrastructural facilities in place. However, the Collector has ignored this duty and has not monitored the same. As a result, the commencement document (which has listed conditions to the builder before commencing work) is being used as a blanket sanction to start the project. (What's also shocking is that one developer, on the basis of a commencement certificate of one 'special township', replicated it in another area, without applying for a separate permission."
Mr Kumbhar further states, "Thanks to the negligence of the Collector in enforcing the norms for special townships stringently, developers are getting away by claiming they are building special townships, when in reality they would be mere housing societies on a bigger scale. One of the premier so-called special townships has shown a picturesquely landscaped setting on its website, when in reality it continues to be an abandoned quarry with no infrastructure in place even now."
"Indians living abroad tend to book properties based on what they see on these websites (and giving the power of attorney to a family member/friend) and this can be very risky. Hence, it is essential that they be able to see genuine information about these projects on the Pune Collector's website, so they are not cheated."
After Mr Kumbhar's campaign, the Collector posted the commencement documents of the sanctioned townships at http://pune.gov.in/puneCollectorate/Support/township.pdf .
(Read details of the Maharashtra housing policy at http://housing.maharashtra.gov.in/english/dcmNew/pdf/HPeng.pdf .)
In April this year, Maharashtra Chief Minister Prithviraj Chavan stated in the legislative assembly that the special township scheme was tilted heavily in favour of the developer and that a review was required to bring in more affordable housing schemes. This is because the government has granted envious sops to the developer, like automatic non-agricultural permission, concession in stamp duty and development charges and a floating FSI. In lieu of this, the government has not got affordable housing in these townships that were supposed to be "inclusive".
HOW was the idea of Special Townships triggered off?
Wikipedia says: "Magarpatta is a self-contained residential-cum-industrial / corporate settlement spanning over 400 acres. It is situated along the Pune-Solapur Highway, in Hadapsar, Pune. Magarpatta City initiated processes towards private development of the 'Integrated Township' at such a scale in the country. The success of its development was instrumental in the state government of Maharashtra incorporating a key legislation, called the Special Township Notification of 2006, a part of the Maharashtra Regional & Town Planning Act of 1976, based on which many integrated township projects in Pune have sprung up.''
SPECIAL Township Policy - concessions given to the developer:
The Government of India has announced its policy to permit 100% foreign direct investment (FDI) for the development of integrated townships. In order to encourage private investment in the housing sector and to facilitate housing at affordable prices, the following incentives will be available for projects under the Special Township Area:
i) Non-agriculture permission will be automatic.
ii) Exemption from Urban Land (Ceiling and Regulation) Act, 1976.
iii) Government land falling under township area shall be leased out to the developer at the current market rate.
iv) The condition that only agriculturist will be eligible to buy agriculture land shall not be applicable in Special Township Areas.
v) There shall be no ceiling limit for holding agriculture land to be purchased by the owner/developer for such project.
vi) There will be floating FSI in the township. Unused FSI of one plot can be used anywhere in the whole township.
vii) The stamp duty rates applicable in the Special Township area shall be 50% of prevailing rates.
viii) A Special Township Project shall be partially exempted from payment of scrutiny fee for processing the development proposal.
ix) 50% concession in payment of development charge.
x) Development of basic infrastructure and amenities.
(Vinita Deshmukh is consulting editor of Moneylife. She is also an RTI activist and convener of Pune Metro Jagruti Abhiyaan. She can be reached at [email protected].)
Inflation-hit South Asia will see its economies expand 7.2% this year-with inflation forecast to hit 9.1%-while the region's India-led growth would hit 7.7% in 2012, a study by the ADB said
Hong Kong: Asia's developing economies will post slower-than-expected growth this year and in 2012 as key trading partners reduce orders amid worries about the global economy, reports PTI.
The Asian Development Bank (ADB) study said the region's economies would expand 7.5% this year, down from its 7.8% forecast in April while 2012 would see 7.5% growth, down from 7.7%.
Slower demand in the US and Europe "continues to cast a cloud over the region," said the Manila-based bank, adding that export growth in leading economies, including trade powerhouse China, had slowed 'substantially'.
"At the same time, strong domestic consumption and expanding intra-regional trade are helping to underpin still solid growth levels (in developing Asia)," said Changyong Rhee, the bank's chief economist.
"Since the onset of the global recovery, the growth in exports to (China) from several Asian economies has been stronger than their exports to the rest of the world."
The share of regional trade among Asia's largest economies increased to 47% in the first half of 2011, up from 42% in 2007, the report said.
The bank also warned that rising prices "remain a threat to many economies" with developing Asia's inflation rate expected to average 5.8% this year, up from 5.3% forecast in April, it added.
Regional inflation should then cool to 4.6% in 2012 as commodity prices fall "but central banks will still need to keep a close watch and may need to take remedial action", the ADB said.
Concerns about hot money flooding the region have eased as capital flows slowed in recent months, but there was a risk of an upsurge when advanced economies bounce back and debt markets settle, the report said.
"Capital has so far been flowing into the region at a manageable pace, but global economic uncertainty means policy makers should be prepared for greater volatility in capital flows," the report said.
The bank also warned that policymakers would have to focus on the region's demographic landscape with young populations "growing older very rapidly, which will put many economies under pressure" in the coming decades.
The bank's report looked at 44 jurisdictions stretching from the former Soviet states of Central Asia to some Pacific islands, but excluded developed countries such as Japan, Australia and New Zealand.
East Asia-including Hong Kong, China, South Korea, and Taiwan-remains the key economic driver for developing Asia, the report said, with growth forecast at 8.1% this year. That would fall to 8% in 2012 as China's economic engine slows, it added.
Inflation-hit South Asia will see its economies expand 7.2% this year-with inflation forecast to hit 9.1%-while the region's India-led growth would hit 7.7% in 2012, it said.
Recently a group of ministers proposed three major measures to deal with corruption. But the government missed out on making a noise about this
The Manmohan Singh government has lost touch with both types of PR: public relations and political reality, both of which are inextricably intertwined in the face of the challenge thrown by Anna Hazare and the millions who follow him.
The government has decided on three strong anti-graft measures which will make life a lot more difficult for corrupt bureaucrats and ministers. But the way the announcements have been made is more like a cat mewing in the dark than a lion roaring in the full light of day.
Take this news agency story, for instance. It says that a group of ministers (GoM) headed by Pranab Mukherjee has proposed that the discretionary powers of ministers and bureaucrats in procurement of goods and equipment for the government—from rice to the purchase of aircraft—will either be shelved or severely curtailed.
Every year, government procurement by the Centre, down to the panchayat level, is an unbelievable Rs11 lakh crore.
The GoM is convinced that abuse of discretionary powers is the major reason for corruption. It decided to quickly draft a national policy on procurement and a law to fix accountability. India is one of the few countries which does not have a national policy in this regard. Both the national policy and the law will be placed in parliament during the winter session.
The draft law has the following features:
> All procurements should be after competition between suppliers.
> All states and union territories should have a "Transparency in Procurement Act" stipulating the methodology for procurement, identify authorities for procurement decisions and a mechanism to look into irregularities.
> The criteria for evaluation of bids will be laid down before the auction process begins, which cannot be changed under any circumstances.
> Procurement wings will do market research to arrive at reasonableness of the suppliers' bids.
Only officials with proven integrity should be involved in the procurement process.
> Payments to suppliers to be settled promptly.
According to another report, the same GoM has proposed that bureaucrats face a 10% loss of pension for minor cases of corruption and a 20% cut for major infringements that lead to compulsory retirement from service.
Cases of public servants accused of graft will be put on the fast track and disciplinary action decided within a year of a complaint being received.
Expectedly, the GoM was constituted soon after Congress president Sonia Gandhi called for measures to check corruption at the party's plenary session at Burari, in Delhi, in November 2010. Not much happened until Anna Hazare turned up with his Lokpal Bill and was supported by millions.
The third major anti-corruption measure proposed by the government is a new policy for allocation of 2G spectrum. The draft law says that for commercial use the government shall follow fair, transparent, equitable, non-discriminatory, market-based competitive assignment which may include (but is not limited to) methods such as auction, tender, bidding. The newspaper report said the methods followed will be like the transparent auction for 3G/BWA which yielded over Rs1 lakh crore to the exchequer in mid-2010.
These are three vital methods of reducing corruption by huge amounts. And how are they announced to the public? Through driblets in different newspapers which underplayed them.
The government has a vast Press Information Bureau. The prime minister has an information advisor. But even a rookie reporter would have handled it a lot better.
He would have clubbed these three decisions and called a press conference at Vigyan Bhavan, the biggest auditorium in Delhi. He would have lined up Sonia Gandhi, Manmohan Singh and the entire Cabinet on the dais and gone to town, touting these as the biggest, most fantastic response to the demands of millions of people that corruption be eradicated. (No mention of Anna Hazare). But we have a weak, confused government which doesn't know its shoulder from its elbow.
(R Vijayaraghavan has been a professional journalist for more than four decades, specialising in finance, business and politics. He conceived and helped to launch Business Line, the financial daily of The Hindu group. He can be contacted at [email protected].)