DELHI: In the last five years, only 65, mostly commercial, properties in New Delhi Municipal Council areas have been converted from leasehold to freehold. Reason, the exponential increase in land rates—a crucial component in calculating conversion charges—from Rs 28,980 per sq metre to Rs 19.35 lakh per sq metre for commercial establishments.
“The rates are exorbitant. No one can afford to pay them. The land rate in NDMC areas as per Land and Development Office is Rs 28,980 per sq metre for Khan Market. How can NDMC charge us Rs 19.35 lakh per sq metre?” said Sanjiv Mehra, president of Khan Market Traders Association which has made several appeals to the civic agency.
In 2008, the civic agency adopted as land rates Delhi government-approved circle rates—the minimum rate of the land which is mainly used to calculate stamp duty at the time of registration of properties. The decision was taken as L&DO—a land owning agency under the union urban development ministry—had not revised land rates since 2000. But sources say the decision was not taken by the council. “It was an administrative decision and never placed at the council’s meeting,” said an NDMC official.
But this decision has severely impacted residents and traders in NDMC areas. With Delhi government revising circle rates at regular intervals, these have risen manifold. In December 2012, the government revised the rates in Category A colonies by nearly 200%. The revised circle rate for commercial and residential properties in these areas is Rs 19.35 lakh per sq metre and Rs 6.45 lakh per sq metre, respectively.
There are 11 markets in NDMC areas which have been transferred from L&DO. Following an appeal from traders, NDMC chairperson Jalaj Srivastava had ordered for a committee to look into the matter. “But no decision has been taken. They are harassing people unnecessarily,” said Pramod Sharma, convener of Federation of NDMC Markets and head of Sarojini Nagar Market Traders Association.
NDMC officials admit the present land rates are very high. But these can be revised only by the union urban development ministry. “When the decision was taken, there was not much difference between land rate and circle rate. But the recent revision of circle rates has created problems. While converting a property from leasehold to freehold, land rate is crucial. We can’t take conversion charges as per circle rates. Circle rates can’t be made land rates,” said an official.
The L&DO recently sent a cabinet note to NDMC on revising land rates. Sources say L&DO is planning to adopt DDA’s land rates which are 8-10% more than its present rate. But even if L&DO decides to revise the land rates, the new rates can’t be implemented as the matter must be placed before the council which is unlikely soon with elections round the corner.