Chandigarh admn gets cracking to utilise Urban Development Fund
The fee collected from conversion of properties from leasehold to freehold is deposited in the Urban Development Fund and can be used for different development projects in the city
After keeping it on the back-burner for several years, the UT administration has finally made first moves in framing guidelines for using the Urban Development Fund (UDF).
The fee collected from conversion of properties from leasehold to freehold is deposited in UDF and can be used for different development projects in the city.
But for more than a decade now, the fund remained untouched in the absence of a framework for the procedure to use it.
The administration had allowed the conversion of residential leasehold properties to freehold in 2017. Since then, people getting their properties converted have been depositing conversion fee, which has reached around ₹20 crore till date.
“In the absence of guidelines and rules on the use of the fund, it has been lying unused. When it came to my notice, I directed the officials to frame the rules. A draft of the rules has been prepared and is awaiting the approval of the UT administrator. We are also examining whether these guidelines require the Union government’s approval or a local decision will suffice,” said UT adviser Dharam Pal.
With the administration allowing the conversion of all unsold leasehold properties with the UT Estate Office, municipal corporation and Chandigarh Housing Board, the administration expects the collection of conversion fee to increase.
All these government agencies will have to pay conversion fee while getting their properties converted. The adviser said the administration will also get the fund audited as the rules are finalised for its usage.
Policy for commercial units in limbo
The administration has also accorded in-principle approval for the conversion of sold leasehold industrial and commercial properties into freehold. But the matter remains with the Union ministry of home affairs (MHA) for approval.
“We are actively pursuing the matter with the Centre. But so far, we have neither received an approval nor rejection,” said Pal.
The administration can decide on the conversion fee for commercial and industrial units only after MHA’s approval.
Nearly 70% commercial and industrial plots in the city are leasehold, allowing occupation for a limited period, mostly 99 years, with government agencies holding the ownership rights.
“The administration expects to make a windfall gain in terms of conversion fee with the implementation of a conversion policy for industrial and commercial properties. This will further bolster the UDF. So, it is now actively framing the guidelines for use of UDF,” said a senior UT official.