The problem of land hoarding

The problem of land hoarding

Context

The government owns more land than it admits, large swathes of which are unused or underutilized

The government owns more land than it admits, large swathes of which are unused or underutilised

The Centre, by its own admission, does not know exactly how much property it owns. Imagine what would happen if a citizen or a private entity made such a claim before the taxman — they would be fined and very likely end up in jail

Incomplete GLIS information

• The actual size and value of government-owned land resources is thus a matter of speculation
• The information provided by the Government Land Information System (GLIS) is both incomplete and patchy
• While various Central Ministries admit to owning only about 13,50,500 hectares of land, disparate official sources suggest that the correct figure is several times more than what is disclosed.

The problem of unused land

What is worse is that a large proportion of government land lies unused

Vast unused land with Railways and Defence

The Ministries of Railways and Defence, respectively, have 43,000 hectares and 32,780 hectares of land lying vacant, without even any proposed use

Port Trusts

According to reports of the Comptroller and Auditor General of India (CAG), the 13 major port trusts have 14,728 hectares of land lying idle.

Excess land holding by states also

These numbers are staggering, but they are only the tip of the iceberg. They exclude several departments of the Centre and, more importantly, don’t take into account excess land holding by the States

High value property in prime locations lying unused

What is really unfortunate is that a large part of the unused land is high-value property in prime areas in major cities.

Effects of land hoarding by the government agencies

• Land hoarding by government agencies has created artificial scarcity and is one of the main drivers of skyrocketing urban real estate prices
• Even after the recent correction in property prices, middle- and lower-income households find adequate housing unaffordable
• High land prices also reduce competitiveness by increasing the cost of industrial and development projects.

Cause of Corruption

• Moreover, the allocation of unused land is rife with corruption. Scams involving the Adarsh Cooperative Housing Society, the Srinagar airfield project, and the Kandla Port Trust are a few of the many examples of alleged complicity between private developers and local officials to misuse government land
• At the State level too, instances abound of public land being resold to private entities in dubious deals.

No records maintained by the government

• The CAG also reports that none of the government agencies maintains adequate ownership records
• For instance, the 13 major ports have failed to produce title deeds for as much as 45% of their land holdings. This makes squatters difficult to evict, and so they gravitate to these areas.

Land use patterns

While stock of land is fixed, its supply as an input in production is not — it crucially depends on land use patterns

Floor space index (FSI)

• A useful measure of this is the floor space index (FSI), which is the total floor area built per square metre of land. For example, if a single-storey building occupies 50% of a plot, the FSI would be 1/2. If the building is expanded vertically to have four stories, the FSI will go up to two (4 times 1/2), as the effective floor area has quadrupled.
• The demand for land increases with both population density and economic growth
• Therefore, to maintain efficiency, the FSI should also increase
• By this token, the FSI should be the highest in major city centres, where the demand for space is highest, and it should taper off gradually towards the periphery
• Apart from supplying space for economic activities, such an arrangement would also help maximise the gains from transport infrastructure.

Defying urban planning basics

However, most Indian cities defy these basic tenets of urban planning

Cause: Government land with low FSI

The main reason is the large areas of unused or underutilised government land with an irresponsibly low FSI

Examples

Residential zones in Lutyens’ Delhi and Nungambakkam in Chennai are examples of this gross underutilisation of land

Other cities don’t fare much better

Government residences and office locales most affected

The problem is most acute in government residences and office locales

Indian metros have lowest FSI

• Indian metros thus have the lowest FSI compared to those in other developing countries with similar population densities
• The FSI in Shanghai is four times of that of Delhi and Mumbai

Investment per square metre gradient of Indian cities is very low

Moreover, the investment per square metre gradient of Indian cities is very low and haphazard.

Could generate employment

This is a pity as solving the problem of wastage could generate employment and pull masses out of poverty, thereby aiding the economy to grow fast.

Right of the people

People have the right to know the size and use of land holding by government agencies, since most of the official land has been acquired from them by paying pittance by way of compensation

Result of the subsidy

It is because of this subsidy that government agencies, and in many cases private companies, have been able to amass large stocks of unused land

CAG on SEZ

For instance, another report by the CAG on Special Economic Zones shows that as much as 31,886 hectares, or 53% of the total land acquired by the government for these zones, remains unused — land which would have been put to more productive use by its original owners.

Agencies not cooperating

In a welcome initiative, the Centre has asked departments to identify surplus land. Unfortunately, agencies seem to be loathe to cooperate.

Need of the hour

• The need of the hour is a comprehensive inventory of land resources and usage patterns for all government branches
• It should include information on the location of each property, its dimensions, the legal title, current and planned use, and any applicable land use restrictions
• This will enable effective identification of suboptimal land use, as well as of the land that is surplus.

The use of surplus land

• Surplus land should be utilised to meet the ever-growing demands for services, such as water and waste disposal, as well for government-sponsored housing and transportation projects
• It is crucial to avoid the temptation to sell surplus land as excessive acquisition of land may become the norm and unwilling sellers are typically under-compensated
• Land intended for future use can be rented out till such time it is needed, through a transparent auctioning process. This will not only buoy the public exchequer but prevent plots of land lying waste for years.

A Complicated problem

The problem of inefficient land use by government departments and public sector units is complicated and endemic.

A public-government partnership

• A public-government partnership seems to be the way out. We could take a cue from Britain. There, the government has pledged to provide details of ownership, location, and intended use for all properties
• Citizens are invited to contest official land use and suggest alternatives.

Conclusion

Therefore, as a first step, the government should agree to disclose its land use and release of excess land, the use of which it cannot justify.