Cabinet approves setting up of National Land Monetization Corporation as a Special Purpose Vehicle (SPV) for undertaking surplus land monetization

By Dr. Sanjay Chaturvedi, LLB, PhD

The Union Cabinet, chaired by Prime Minister Shri Narendra Modi has approved the setting up National Land Monetization Corporation (NLMC) as a wholly owned Government of India company with an initial authorized share capital of Rs 5000 crore and paid-up share capital of Rs 150 crore.  NLMC will undertake monetization of surplus land and building assets of Central Public Sector Enterprises (CPSEs) and other Government agencies.  The proposal is in pursuance of the Budget Announcement for 2021-22.

With monetization of non-core assets, Government would be able to generate substantial revenues by monetizing unused and under-used assets.

At present, CPSEs hold considerable surplus, unused and under used non-core assets in the nature of land and buildings.  For CPSEs undergoing strategic disinvestment or closure, monetization of these surplus land and non-core assets is important to unlock their value.  NLMC will support and undertake monetization of these assets.  This will also enable productive utilization of these under-utilized assets to trigger private sector investments, new economic activities, boost local economy and generate financial resources for economic and social infrastructure.

NLMC is also expected to own, hold, manage and monetize surplus land and building assets of CPSEs under closure and the surplus non-core land assets of Government owned CPSEs under strategic disinvestment.  This will speed up the closure process of CPSEs and smoothen the strategic disinvestment process of Government owned CPSEs.  These assets may be transferred to NLMC to hold, manage and monetize these assets.  NLMC will also advise and support other Government entities (including CPSEs) in iden tifying their surplus non-core assets and monetizing them in a professional and efficient manner to generate maximum value realization.  In these cases (e.g., on-going CPSEs and listed CPSEs under strategic disinvestment), NLMC will undertake surplus land asset monetization as an agency function.  It is expected that NLMC will act as a repository of best practices in land monetization, assist and provide technical advice to Government in implementation of asset monetization programme.

NLMC will have necessary technical expertise to professionally manage and monetize land assets on behalf of CPSEs and other Government agencies.  The Board of Directors of NLMC will comprise senior Central Government officers and eminent experts to enable professional operations and management of the company.  The Chairman, non-Government Directors of the NLMC will be appointed through a merit-based selection process.

Recognizing the wide range of specialized skills and expertise required for asset monetization in real estate market research, legal due diligence, valuation, master planning, investment banking, land management etc.  It has been decided to hire professionals from the private sector, similar to other specialized Government companies like National investment and infrastructure Fund (NIIF) and Invest India.  NLMC will be a lean organization with minimal full time staff, hired directly from the market on contract basis.  Flexibility will be provided to the Board of NLMC to hire, pay and retain experienced professionals from the private sector.

Going forward, Department of Public Enterprise, Ministry of Finance, will set up the company and act as its administrative ministry.

Toll on Roads are restrictions on Fundamental Rights

By Dr Sanjay Chaturvedi

Toll or charges to use roads is nothing but scam. Government after government have allocated huge funds for infrastructure at the center and state level. In the last Union Budget of 2021, the government allocated whooping Rs 5 Lakh crore for infrastructure sector. The Budget usually make good either from revenue from taxes or borrowings which were paid over the years from revenue only. When such allocations are from the tx sources which are been paid by the taxpayers and all such huge infra projects are funded by the government which has used public money to built them then why to collect the toll?

A citizen under the constitution of India can travel to Indian tertiary freely. It is his fundamental right. Restricting it through Toll is actually taking away the fundamental rights. Always a via road is left for general citizens to use but goons and draconian Toll collectors never wants the general rule be known to the general public.

Recently Hon’ble Bombay High Court directed CAG enquiry into Mumbai Pune Expressway Toll collection in a PIL. Rightly so. Who will account as to how many vehicles have passed by. Now there is electronic Toll under Fastag which may give some clarity.

The question is not that how much Toll is collected. The question is why to collect the Toll at all. We understand that the projects are given on BOT system. Build Operate Transfer system is good for large Infrastructure projects under Public Private Partnership (PPP).  But when government can afford to borrow and repay, why to give such Tolls in the hands of Private Players? Will these players ever going to be satisficed with the income they generate? How may times the Toll Collection Contract on Mumbai Pune Express was renewed? On SeaLink in Mumbai, the Toll is increased every now and then. Is there any policy? Is the Toll Collection calculations are having rationale? Why to collect Rs70 one way when the return journey is Rs100/-? What is the rationale? No transparency. It is big scam in offing in the entire country. The transparency in Toll collections and the years of such collection. It is mandatory to keep board at such Toll Collections to display information as to how much collection happened till date and how much years of collection remaining but not that all Toll nakas are displaying. Fastag or no Fastag, who implements it? In the Fastag Lane, cash toll vehicles also become opportunistic and making mockery of people who have taken Fastag. The Toll operator usually allow the cash toll in Fastag Lane. Trucks and other vehicles are allowed in the Car lane.

As per Rule 8(2) of the National Highways Fee (Determination of Rates and Collection) Rules, 2008 – “Any other fee plaza on same section of national highway and in the same direction shall not be established within a distance of sixty kilometers:

Provided that where the executing authority deems necessary, it may for reasons to be recorded in writing, establish or allow the concessionaire to establish another fee plaza within a distance of sixty kilometers:

Provided further that a fee plaza may be established within a distance of sixty kilometres from another fee plaza if such fee plaza is for collection of fee for a permanent bridge, bypass or tunnel.” This rule is applicable for Build, Operate & Transfer (BOT) projects taken up on or after 05.12.2008 and all public funded projects.

Public pays in taxes which is allocated for Infrastructure like this and public also made to pay for the Tolls, is nothing but double jeopardy and double taxation.

 

Income Tax relief for Real-estate Developers and Home Buyers

By SRELJ Bureau

As part of the AatmaNirbhar Bharat Package 3.0 as announced by Hon’ble Finance Minister on 12th November, 2020, certain income tax relief measures were brought in for real-estate developers and home buyers.

Up to 2018, section 43CA of the Income-tax Act, 1961 (‘the Act’) provided for deeming of the stamp duty value (circle rate) as sale consideration for transfer of real-estate inventory in the case the circle rate exceeded the declared consideration. Consequentially, stamp duty value was deemed as purchase consideration in case of buyer under section 56(2)(x) of the Act.

In order to provide relief to real estate developers and buyers, the Finance Act, 2018, provided a safe harbour of 5%. Accordingly, these deeming provisions triggered only where the difference between the sale/purchase consideration and the circle rate was more than 5%. In order to provide further relief in this matter, Finance Act, 2020 increased this safe harbour from 5% to 10%. Therefore, currently, the circle rate is deemed to be the sale/purchase consideration for real estate developers and buyers only where the variation between the agreement value and the circle rate is more than 10%.

In order to boost demand in the real-estate sector and to enable the real-estate developers to liquidate their unsold inventory at a rate substantially lower than the circle rate and giving benefit to the home buyers, it has been decided to further increase the safe harbour from 10% to 20% under section 43CA of the Act for the period from 12th November, 2020 to 30th June, 2021 in respect of only primary sale of residential units of value up to Rs. 2 crore. Consequential relief by increasing the safe harbour from 10% to 20% shall also be allowed to buyers of these residential units under section 56(2)(x) of the Act for the said period. Therefore, for these transactions, circle rate shall be deemed as sale/purchase consideration only if the variation between the agreement value and the circle rate is more than 20%.

Legislative amendments in this regard shall be proposed in due course.

Time for New Housing Policy

By Dr Sanjay Chaturvedi, LLB, PhD

It was in 1998 and then in 2005 “The National Housing and Habitat Policy” was for the first time after independence introduced by then governments. In all 12 five year plans, housing was never a priority neither it was in any Union Budget till late 2010.
In the Housing Policy, the best thing was to repeal the draconian Urban Land ceiling Act and many new targets were self imposed by the then government. With the industry help and associations like CREDAI, government for the first time understood the need for a comprehensive housing policy in the country. As per the 1991 Census, the estimated figure of housing shortages in the country is pegged at 22.90 million units as on 31.03.1991. More than 90 % of this shortage is for the poor and the low income category. The National Housing & Habitat Policy aims at creation of surpluses in housing stock either on rental or ownership basis and provision of quality and cost effective housing and shelter options to the citizens, specially the vulnerable group and the poor.
With this as main objective, National Housing Policy 1998 gave birth to many modifications and special thrust areas in government policies and state policies. The Policy envisages the role for local bodies to identify specific housing shortages and devise programmes to meet housing shortages and augment supply of land for housing, particularly for the vulnerable group.
Today, when previous government had given much emphasis on affordable housing through Pradhan Mantri Aawas Yojana and gave home loan interest subsidies besides direct subsidies for rural homes, it was public private partnership built more than 50 lakhs homes in the country. The trend is continuing in two and three tier metros were population is just above 10 lakhs.
Today, we don’t know how much short we are. Planning commission is now Niti Aayog needs to identify the region wise figure as to how much short we are. Why to waste nation’s resources by constructing unnecessary assets which are of no use to any one but to increase burden on builders who are struggling hard to cope up with debt they have taken to construct affordable housing.
Post RERA regime must be accessed, new Housing Policy must include detailed research and study as to role of every player in real estate industry and housing. We just can’t go on constructing homes without knowing who will occupy them. Role of State Housing Board and responsibilities must be certain, curb on Housing finance interest greed must be imposed and chief objective should be homes for every Urban poor must addressed.
There is no mai baap for Real Estate. Aftermath of COVID-19, it seems that real estate industry is treated like step motherly treatment. The stimulation were declared for every section of but for the industry. The rebate must have been given in GST or jajia of taxation for home buyers instead of asking industry to reduce the price. It is time when the biggest contributor to GDP industry and highest employment generator after Agriculture must be given a comprehensive Housing and real estate policy which have rationalization through out the states and to a longer period of time. The consistency in policy and frequent change in legal frame work, taxation and planning FSI have made uncertainty in the industry.
A comprehensive policy is need of the hour.

Representation to register Retailers and Building and Construction Professionals as MSMEs will be examined: Shri Gadkari

By SRELJ Bureau

Union Minister for MSME and Road Transport and Highways, Shri Nitin Gadkari today assured the Retailers Association of India and Practicing Engineers, Architects and Town Planners Association (India) that their request for registering as MSMEs will be examined expeditiously. He felt that this need to be explored from the point of these bodies being employment creators and whether various benefits such as insurance, medical, pension, etc can be provided to workers.

He also called upon the retailers to start exploring option of home delivery and maintaining social distancing, availability of sanitizers for customers/employees and use of masks at all retail outlets.

The Minister was addressing meetings today via video conferencing with the representatives of Retailers Association of India and representatives of Practicing Engineers, Architects and Town Planners Association (India) on impact of COVID-19 on their respective sectors. During this interaction, the representatives expressed concerns regarding various challenges being faced by them amid COVID-19 pandemic along with few suggestions and requested support from the government to keep the sector afloat.

He also called upon the Engineers, Architects and Town planners to explore decongesting over crowded cities and   participate in the development of rural, tribal and backward regions especially along the Green Expressways like the new Delhi -Mumbai Exoressway which is passing through such areas. He said various clusters and logistics parks will come up up on this ambitious project offering huge opportunities.

Some of the major issues highlighted and the suggestions given included: registering retailers/restaurants/architectural firms as MSMEs, starting Malls with conditions of safety measures related to COVID-19, starting operations of e- Commerce companies for non-essential items, relief in rentals for retailers, extension of moratorium to 9 months, reduction in bank interest rate from 10% to 4-5%, adherence to RBI guidelines by private banks, applying GST on receivables only, registration of builders as MSME who are already registered under RERA Act, etc.

Shri Gadkari called upon the industry that it is needed to be ensured by industries that necessary preventive measures are taken to prevent the spread of COVID-19. He emphasized on usage of PPE (masks, sanitizer etc.) and advised to maintain social distancing norms during business operations.

He mentioned that all the stakeholders must adopt an integrated approach to come over the crisis while ensuring the lives and livelihood of the people. Shri Gadkari also urged the industry to have a positive attitude during this time to tide over this crisis.

The Union Minister emphasized that special focus towards export enhancement is the need of the hour and necessary practices shall be adopted to reduce power cost, logistics cost and production cost to become competitive in the global market. Further, he mentioned that there is also need to focus on import substitution to replace foreign imports with domestic production.

He further mentioned that work on Green Express Highway has already started, and this is an opportunity for industry to make future investments in industrial clusters, logistics parks equipped with state-of-art technology. He opined that there is a need to expand the horizon of industrial cluster in areas other than metro cities and urged industries for participation.

The Minister recalled that Government of Japan has offered special package to its industries for taking out Japanese investments from China and move elsewhere. He opined that it is an opportunity for India which should be grabbed.

Shri Gadkari responded to the questions from representatives and assured all possible help from the government. He informed that he would take up the issues with related departments. He emphasized that industry should take a positive approach and tap the opportunities that will be created when the COVID-19 crisis gets over.

Right of Multiple entry Life-long Visa facility to visit India for OCI Cardholders, to remain in abeyance till Prohibition on International Air Travel of passengers from/to India is lifted

By SRELJ Bureau

The Union Ministry of Home Affairs (MHA) has issued an order specifying that the right of multiple entry life-long visa facility for visiting India for any purpose granted to persons registered as Overseas Citizen of India (OCI) cardholders would continue to be kept in abeyance till the prohibition on international air travel of passengers from/to India is lifted by the Government of India.

Any foreign national holding an OCI card who intends to travel to India for compelling reasons during this period would have to contact the nearest Indian Mission. Further, in case of persons holding OCI card who are already in India, the OCI card shall remain valid for their stay in India for any length of time.

 

Click here to see Official Order

Physical Registration of Leave and License agreements discontinued till July 2020 in Maharashtra

By SRELJ Bureau

Government of Maharashtra have decided to discontinue physical registration of leave and license Agreement in Maharashtra. Now till July 2020 all leave and license agreements shall be registered online only. There will be no physical presence of parties to the leave and rent agreements in Maharashtra.

Government of Maharashtra have decided to avoid any rush at registration centres. To keep social distancing, Govt had announced that till July 2020 there will be no physical registration of the leave and license agreements.

The module is developed and made available by the Department of Stamps and Registration.
It provides facility of online registration of Leave and License Agreement to citizen.
Citizen can,
      1) Prepare the agreement       5) Submit it for registration
      2) View the draft                    6) Get it registered
      3) Modify if required               7) Get the status of registration through SMS
      4) Execute (sign) it
All these activities can be performed from anywhere anytime, without going physically to Sub Registrar Office.

Land Use Change for Central vista Development/ Redevelopment Project Approved; includes New Parliament building

By SRELJ Bureau

The Govt has approved the land use change as required for the Central Vista Development/Redevelopment project on the recommendations of Delhi Development Authority (DDA). This paves the way for the construction of new Parliament building and other projects in the prestigious Central Vista project.  This decision will ensure that the green areas and Public-Semi-Public spaces are adequately compensated or enhanced.

The Central Vista of New Delhi houses Rashtrapati Bhawan, Parliament House, North and South Block, India Gate, National Archives etc. All these iconic buildings were constructed before 1931, the year in which the new capital was inaugurated. The other office buildings were built on various plots subsequently to address the office requirements of Central Ministries and Departments in an unplanned manner.Parliament House building came up in 1927 and is declared Heritage building. Its facilities and infrastructure are inadequate to meet the current demand. Therefore, there is an imperative need to construct a new state-of–art Parliament building in close vicinity. This proposal may address not only the space requirement but may result into an iconic structure as a symbol of democracy.

The offices of the Central Government are spread over different locations which affects inter-departmental coordination, and unnecessary travel leading to congestion and pollution. Further, most of the existing buildings have outlived their structural lives. The Hutments, which occupy huge area in the Central Vista, came up as temporary structures during the Second World War. Development of Common Central Secretariat will create modern workspaces with latest technology for better productivity and efficient utilization of human resources.Rajpath and avenue in Central Vista which includes greens and water bodies adjoining it, symbolizes the magnificence of the Capital City and is a tourist place of national importance. Upgrading its facilities and rejuvenating the green spaces is necessary. In view of the above, we have taken up the Central Vista Development/ Redevelopment Project.

The objectives of the Project include upgrading Parliament’s space and facilities; consolidating, rationalizing and synergizing government functioning; refurbishing and better equipping the Central Vista Avenue; strengthening cultural institutions in the Central Vista.  This change in land use will pave the way for development/re-development of these projects.

Maharashtra Govt issue guidelines for Redevelopment in GR

By Legal Bureau

Maharashtra government has recently issued government resolution (GR) in which it has brought down consent percentage required for redevelopment to 51% from 70%.

The new guidelines under section 79A of Maharashtra Cooperative Societies Act, 1960 is superseding earlier direction of January 3, 2009.

As per media reports, there were 16,000 derelict buildings in Mumbai with a majority of them located in Byculla, Girgaum, Sewri, Parel, Mumbai Central, Nagpada, Bhendi Bazaar, Mohammad Ali Road and Crawford Market.  Across India, there are several buildings facing problems of fragile floors, water leakage and more.

Some of the important highlights of GR:

(1) This is applicable to all types of redevelopment.

(2) Redevelopment cannot be initiated or decided by Authorised officer/ administrator appointed by the registrar.

(3) Redevelopment can be done of the dilapidated or dangerous to stay as certified by the competent Authority and has to be undertaken under DCR.

(4) Requisition Special general body (SGM) meeting for redevelopment needs to be submitted by 20% members.

(5) For all SGM shall be 2/3rd Members and resolution should be passed by 51% of total members of the society. Written consent has to be taken from more than 51% members for proceeding with redevelopment and also for the appointment of a contractor or the developer.

(6) Architect / PMC have to be appointed in SGM.

(7) Federation who are having conveyance in their name of the federation can only undertake redevelopment through Federation.

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