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Integrated Township Planning201121/03/2011

Project Report On

“INTEGRATED TOWNSHIP PLANNING”

Ammaar Shaikh

2009A63

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Integrated Township Planning2011

SYMBIOSIS CENTRE FOR MANAGEMENT & HUMAN RESOURCE DEVELOPMENT

[Constituent of SYMBIOSIS INTERNATIONAL UNIVERSITY (SIU)]

MBA 2009-11 Batch Sem IV ProjectProject Charter

Roll Nr . Full Name

2009A63 Ammaar Shaikh

Subject/Topic for the project (2 to 4 lines):

Project Report on Integrated Township Planning

Research Objective (3 to 5 lines):

To prepare a comprehensive analysis of the different aspects involved in integrated township planning.

Deliverables of the project (Not more than 5):

Following are the aspects that will be covered in the project

- Township Planning- Legal aspects- Environmental aspects- Infrastructure Aspect- Land acquisition for township

Remarks by Dr.Patwardhan/Prof Date:

Approved/Rework/Not approved:

Signature: Name:

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Table of Contents

Acknowledgment ...................................................................................................................4

Preface....................................................................................................................................5

Executive Summary.................................................................................................................6

Objectives of report................................................................................................................8

Part 1-External factors/issues of Integrated Township

Chapter 1-Introduction........................................................................................................9

Chapter 2-Merits/Demerits of Integrated Township..............................................................

Chapter 3-Financing Integrated township..........................................................................16

3.1-Domestic Financing options3.2-Foreign Financing options

Chapter 4-Government Role..............................................................................................22

Chapter 5-Foreign Direct Investments(role) ......................................................................24

5.1-Eligibility Criteria for investment5.2-FDI policy5.3-Procedure for government approval

5.4-Conditions for IT Development

5.5-Merits/Demerits of FDI

Chapter 6-Challenges........................................................................................................35

6.1-Muncipal compliances6.2-Legal compliances6.3-Financial risk

Part 2-Internal factors/issues Of Integrated Township

Chapter 7-Township Planning ..........................................................................................38

7.1-Criteria7.2-Township Planning Norms7.3-Development procedure

Chapter 8-Legal Issues /Policies.........................................................................................44

8.1-General norms8.2-Policies for IT8.3-Development Concessions

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8.4-Development Control Regulations

Chapter 9-Environmental Issues.......................................................................................55

Chapter 10- Infrastructure aspect.....................................................................................58

Chapter 11-Land Acquisition.............................................................................................61

11.1- Procedure for Land Acquisition11.2- Determination of Market Value of land

Chapter12-Case Study-Magarpatta City...................................................................69

Part 3-Conclusions

Chapter 13-Comprehensive Analysis................................................................................73

12.1-Need for Integrated Township12.2-Current Scenario of 12.3-Trend Analysis of IT12.4-Impact of Green Channel procedures12.5-Issues/Changes Required In IT Development12.6-Government Policies & Implications12.7-FDI Impact on IT Development12.8-Environmental Clearance conclusion 12.9-Infrastructural need

Bibliography

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Acknowledgement

Whatever we do, there is someone who helps us to achieve our goals, complete our targets or simply inspire us. This project too has been the result of many such inspirations, a lot of support and helps from my guides. “THANKS” is not a word enough to express my gratitude or appreciation to them. But still I can do without saying that word over and over again.

I take immense pleasure in completing this project and submitting the final research report. It has been full of learning.

During the actual project work, Prof.Vivek Date & Prof .Prakash Waknis has been the source of inspiration through their constant guidance; personal interest; encouragement and help. I convey my sincere thanks to them. In spite of their busy schedule they always found time to guide me through the project. I am also grateful to them for reposing confidence in my abilities and giving me the freedom to work on my project.

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Preface

The report provides details of different aspects involved in integrated township planning .It provides information regarding the terms and conditions for township developments and real estate. The special township policy provides the policies which are necessary for township development .Financing structure for different projects as per the requirements are mentioned Different routes of financing like Commercial banks , PSU ,Foreign Direct investments private sector participation etc are explained.

The report provides the FDI policy of the government in relation to Infrastructure projects. Further it provides the procedure for obtaining government approval and the Eligibility criteria for investment in India. The report helps understand the role of FDI in development of integrated township, its advantages and disadvantage.

General requirements for development of townships as well as different aspects such as Legal policies, environmental, infrastructure are provided in detail so as to get an understanding of different issues involved in development of integrated township

The report also gives details of Development control regulations as well as government role and support in relation to development of townships

Land Acquisition being an important aspect in development of integrated township procedure for land acquisition and determination of market value of land are well explained.

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Executive summary

The report provides a detail understanding of each dimension involved in development of an integrated township.

Nowadays looking at the increasing pressure on urban areas in relation to providing space for living has led to the emergence of integrated township.

There are many factors that are involved which have led to the shift in demand for townships which is to be a self-contained town having all the modern civic amenities required by city – dwellers like power, water, roads, garbage management, hospital, school, parks, swimming pools, recreation centre, gym, ground for outdoor games, restaurant, hotel, shopping mall, cinema hall, auditorium, higher learning institute, transport facilities etc it would not depend on the Government for amenities.

There are external factors and internal factor that play an important role in development of Integrated Township. The major external factors are the government role and steps taken to promote development of such townships.

Financing these projects is one of the major concerns .There are several routes of financing such projects .In India the prime source of finance has been Commercial Banks. Other financing mechanisms include domestic capital market; foreign investments; bilateral and multi-lateral financial agencies; and private sector participation. But after removal of barriers for FDI investment it has been is one of the most desired routes for developers to raise finance for their projects.

Foreign Direct Investment (FDI) has been recognized as one of the important drivers of the economic growth of our country .As per the policies of the government issued in 2005 which opened up the window for FDI investments in development of integrated township has played an important role.

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Integrated Township Planning2011For the developers it necessary to understand the challenges that are faced in development of integrated township so that necessary steps can be taken to overcome such difficulties. The major challenges are the legal /municipal compliance planning, political support, financial risk involved etc.

The report provides a detail analysis of the internal factors involved in development of integrated township.

Township planning involves the different criteria to be fulfilled for construction of integrated township and the procedure followed in planning and developing such townships. It is essential to understand the different township planning norms.

There are legal issues/norms which are in involved in development of township which are residential, commercial, educational, amenity Spaces, health facilities, parks, gardens and play grounds, public utilities, transportation etc .There are general and special concessions which the developer gets for such projects. These concessions play an important role as they provide benefit to the developer by reducing cost and increase profitability /feasibility of the project.

Environmental issues nowadays play a very important role in any infrastructure development, so it is necessary to understand and abide by the environmental clearances for completion of the project .Many projects are stalled due to non compliance of environmental norms

Land acquisition is a major concern in development of integrated township. It is by itself a very vast topic but here we have tried to explain it in context of township building. This has been explained through a case study on Magarpatta which is an integrated township which has a used a different model for land acquisition.

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Integrated Township Planning2011Thus this report provides an in-depth analysis of the different facets of Integrated Township and highlights the key issues involved.

Objectives

Primary Objective

To provide comprehensive analysis of the different aspects involved in Integrated Township Planning.

Secondary Objective

The secondary objectives of the project is to understand

• The concept of integrated township Planning

• The Government role in development of integrated township

• FDI role and policies related to financing integrated townships

• Challenges of integrated township development

• Township planning procedures

• Legal issues /policies and its impact

• Environmental clearance and norms for development of township

• Land acquisition Procedures

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Part1-External Factors/Issues OF Integrated Township

1) Introduction

Definitions: Integrated Township means a self-contained township planned and developed through a licensed developer / firm / company / SPV / development Company together with work place and places of residence with all attendant facilities and amenities in such township and in accordance with these Rules.

An integrated township is a community living platform where the concept of walk-to-work can be implemented, everything that families needs is in close proximity from their homes — shopping malls, entertainment options, hotels, hospitals, schools, offices and what have you.

Integrated townships are usually developed and sold in phases, which is why one doesn’t need to incur all the expenditure in one go. Everything in an integrated township needs to be self-sustainable. Many companies across India are planning such large scale, integrated townships, using IT as their peg.

And it is not only in tier-I cities that developers are equally bullish but also on tier-II cities, and the reason is availability of land on a larger scale and at a lower price.

Ideal size and distance from a cityThe size of integrated townships can vary from as small as only 40 acres to some as large as 3,000 acres or more. It all depends on a developer’s ability to buy land and the rate at which he gets it. Of course, like any other real estate project, the model works better if land cost is rational.

Also, if the land cost is too high, there might be a situation where the cost of the end-product might push out middle-class buyers.

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Integrated Township Planning2011Integrated townships have essentially been housing projects offering a combination of row houses, villas, bungalows and group housing—all with essential urban infrastructure and amenities— at differential price points to consumers. Today, townships have evolved to include all the ancillary facilities like commercial premises, hotels, recreational and retail services, along with other amenities. However, there is no standard definition of integrated townships from a regulatory standpoint.

As per Government definition "Integrated Township includes housing, commercial premises, hotels, resorts, city and regional level urban infrastructure facilities such as roads and bridges and mass rapid transit systems. Development of card and allied infrastructure forms an integrated part of township development."

In Gurgaon (Haryana), Maharashtra and Bangalore, the minimum area for a township project is 100 acres. Besides, there are other norms like minimum road width, percentage of land usage, etc specified by the authorities. Depending on size, a township project is expected to provide certain social infrastructure and ancillary facilities as well. For example, all townships must provide schools and basic medical care facilities, while those above 1,000 acres in size must provide a college as well.

Most of the township developer had taken loan from certain bank within India and foreign counties. Foreign Direct Investment (FDI) in India has registered growth in terms of both FDI flows in India and outflow from India. The FDI statistics and data are evident of the materialization of India as both a potential investment market for township construction planning, residential property, and commercial property, hotel projects, IT Park and investing country. To take foreign loans there are certain rules and policy to be followed by the developers through automatic route or approval route.

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Integrated Township Planning2011India top township city:

Some of the top 10 Integrated Township destination cities in India as per (Property Samachar- India Real Estate News) These top integrated township destination cities of India are:

• Bangalore• Delhi- NCR• Mumbai• Lucknow• Kolkata• Jaipur• Chandigarh• Chennai• Pune

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Integrated Township Planning2011Major Townships in Maharashtra

Maharashtra - Township Development

Project Name Project Location Status Name of Developer

Garodia Nagar Ghatkopar East Done Garodia Group

Aamby Valley City Mumbai Done Sahara Infrastructure & Housing

Sahara City Homes

Wardha road, Nagpur

Ongoing Sahara Infrastructure & Housing

Hiranandani Palace Gardens

Pune Done Hiranandani Developers Pvt. Ltd

Veena Samruddhi Mumbai Upcoming

Veena Developers

Dwarka Chakan-Talegaon Road, Pune

Ongoing Naiknavare Developers Pvt. Ltd

Yashopuram Pimpri-Chinchwad Link Road

Done Yash Promoters Builders

Yashomangal Pimpri-Chinchwad Link Road

Done Yash Promoters Builders

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Integrated Township Planning20112) Merits/Demerits of Integrated Township

a) Merits -A township is self sufficient, they provide good living standard along with the facilities like shopping malls, cinema hall, schools, hospital, good connecting roads, restaurants, recreational facilities, etc. In short we can say you can get everything in the township and no need to travel a long distance for daily requirements. Along with facilities it also generates jobs within the area.

• Integrated townships provide solutions to increasing pressure on existing urban infrastructure and rapid urbanization,

• Townships are help to end the housing shortage, and provide a better standard of living to all sections of the society. Staying in townships gives the residents a feeling of living in the countryside, with all the benefits of the city.

• Advantage to developers-One of the biggest advantages of investing in townships projects is that the cost of entry is low compared to investing in the city. Most townships projects are coming up at a distance from the city core and this gives the developer an advantage of lower land cost. These are viewed as a low-risk investment due to its diversification and low entry cost with larger upside potential.

• Townships also offer the prospect of higher appreciation, as these projects adhere to a pre-set development plan with regard to open spaces, communal amenities and common areas. This means the overall value of the location does not take a hit because of unrestricted developments that may crop up later.

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• Integrated Township has low-risk investment due to its diversification and low entry cost with larger upside potential and a great place to stay, excellent infrastructure, and more.

• Employment Generation –It provides a lot of employment to both unskilled and skilled labor which help to support the economy as a whole.

• In short, Investment in townships, housing, built-up infrastructure and construction-development projects has lead to generate economic activity, create new employment opportunities and add to the available housing stock and built-up infrastructure.

b) Demerits of Integrated townships16


• Securing the required multiple clearances for the project is a major hurdle in the development of integrated townships due to which it is a major reason for the developers not to enter into such kind of projects.

• Financing-As the finance required for such projects is very high, raising finance is expensive due to which this cost is transferred to the customers who have to pay higher amount for the flats.

• Entry barrier-Integrated Township Development have high entry barriers due to which there are very few developers who control this segment leading to monopolistic competition.

• Generally the maintenance cost of such townships is high compared to single residential apartments which are to be paid by the residents of the township.

• Such projects sometimes face delays in delivery because of their scale due to which customers may not get their possession of their flats on the stipulated time.

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3) Financing Projects

3.1) Domestic Financing Options

a) Commercial Banks, PSUsTraditionally, in any infrastructure project, especially a large one, the prime source of finance has been Commercial Banks. These banks finance the project looking at the creditworthiness of the project and require a first security over the infrastructure created or the project assets. However, such loans are expensive and banks are fast approaching their lending limits. The overall capitalization for public sector banks is also acting as a constraint for the commercial banks to increase their infrastructure financing portfolio. In India, the infrastructure focused Public Sector Undertakings (PSUs), including Infrastructure Development Finance Company (IDFC), Power Finance Corporation Ltd (PFC) amongst others, have also played a pivotal role in project finance. These PSUs could have made a significant contribution in the future as well if not for their failure in raising resources from the market and inability to channelize the existing resources. With the rapidly increasing demand for investment in infrastructure, an urgent need has been long felt to develop alternative financing mechanisms.

b) Alternative Financing MechanismsThe primary alternative financing mechanisms include domestic capital market; foreign investments; bilateral and multi-lateral financial agencies; and private sector participation. Let us now analyze these mechanisms.

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• Domestic Capital MarketThe corporate bond market is of immense significance for financing infrastructure development. In India, however, the use of domestic market funds has been somewhat restricted due to the underdeveloped domestic capital market. Although RBI has taken measures over the last decade to strengthen the bond market, the development of the corporate bond market is far from satisfactory. The chief problem area is that, in India, corporate bonds have short maturity period, within five years, whereas the funding requirements for an infrastructure project is usually for a period of over ten years. Hence, it is not ideal for funding the long-run requirements of such projects.

• Foreign InvestmentsWith the integration of the financial markets across the world, an alternative avenue has opened up for financing the long-term capital requirements of infrastructure projects. In India, initially, the flow of foreign funds was primarily in the form of short-term portfolio investments rather than long-term foreign direct investments. In order to encourage the flow of foreign funds into the infrastructure sector, the Finance Ministry has allowed the Foreign Institutional Investors (FIIs) also to invest in unlisted companies. FIIs can now invest 100 percent of their funds in the infrastructure sector in India. This move is aimed at helping infrastructure companies as they are not in a position to list their shares in the initial phase. Further, in a bid to make the core sector attractive for FDI, automatic clearance for foreign investment (not requiring the approval of the FIPB) was first introduced for infrastructure sectors like power and roads. Currently, 100 percent FDI is allowed under automatic route in the infrastructure, with the only exception of telecom (49 percent).

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• Bilateral and Multilateral Financial AgenciesIn the wake of the recent global financial crisis and tightening of the credit from commercial banks and bond markets, multilateral financial agencies are emerging as the preferred lenders for infrastructure developers in India. Institutions such as the World Bank and the Asian Development Bank (ADB) are protected from the global crisis to an extent because they raise funds from their member nations and bond markets. However, companies cannot directly borrow from most bilateral and multilateral lenders and often have to get proposals cleared from government departments.

• Private Sector ParticipationAn increased private sector participation/investment for capital investment in the infrastructure sector is also critical. The Government has been trying to harness the private sector's efficiencies in meeting the infrastructure needs of the country either through fully private ventures or through public private partnership (PPP). It involves participation of Central and State Governments along with the private sector. For achieving this, some regulatory aspects and transparency issues have to be dealt with.

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Integrated Township Planning20113.2) Foreign Funds Financing Option

Two main instruments used to acquire foreign funds for Township Development: Since the setting up of township in India many builders and developers had take foreign funds for building township. Foreign funds are gaining popularity in many of builders and developers in India. In order to get foreign funds there are two main types of instrument which are to be followed by builders and developers. The two main instruments are ECB and FDI:

a) ECB (External Commercial Borrowings):External Commercial Borrowings (ECB) are defined to include commercial bank loans, buyers' credit, suppliers' credit, securitized instruments such as Floating Rate Notes and Fixed Rate Bonds etc., credit from official export credit agencies and commercial borrowings availed from non-resident lenders with minimum average maturity of 3 years.

Eligible borrowers can raise ECB from internationally recognized sources such as (i) international banks, (ii) international capital markets, (iii) multilateral financial institutions (such as IFC, ADB, CDC, etc.,), (iv) export credit agencies, (v) suppliers of equipment, (vi) foreign collaborators, and (vii) foreign equity holders (other than erstwhile Overseas Corporate Bodies).

Indian companies registered under the Companies Act, 1956 are permitted to raise ECBs up to US $ 500 million from reputed lenders in any one financial year (April to March). Financial intermediaries like banks, financial institutions, housing finance companies, NBFCs, Trusts, Non-Profit making Organizations (NPOs), Proprietorship/Partnership Concerns and Individuals are not eligible to raise ECBs under automatic route.

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ECB Policy for the purpose of developing Integrated Township:

Amount and maturity: Corporate can avail of ECB of an additional amount of USD 250 million with average maturity of more than 10 years under the approval route, over and above the existing limit of USD 500 million under the automatic route, during a financial year. Other ECB criteria, such as end-use, recognized lender, etc. need to be complied with. Prepayment and call/put options, however, would not be permissible for such ECB up to a period of 10 years.

The ECB Policy Changes:

• RBI had withdrawn the exemption accorded to the development of integrated township as a permissible end-use of ECB. It has been decided to permit corporate engaged in the development of integrated township.

• The ECB Policy was modified in May 2008 to allow the infrastructure companies to raise up to $100 million from overseas markets at comparatively lower interest rates.

• The previous limit of USD 20 million for Rupee expenditure for permissible end-users under the Approval route was hiked to USD 50 million.

• Considering the huge funding requirement in infrastructure sector, the borrowers in the infrastructure sector were allowed to raise up to USD 500 million per year from previous USD 100 million, under the Approval Route.

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• The RBI allows ECB in real estate projects involving integrated townships of 100 acres or more. In real estate projects, a large portion of money is required for land acquisition, which is classified as working capital. But end-use restrictions like not allowing ECB money to be used for working capital will take away its attractiveness.

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4) Government’s role and support.

a) External Infrastructure - Power/Roads/Water-The Government recognizes that the provision of trunk infrastructure such as access from nearest major road and bulk supply of drinking water and power are essential for the facilitating township development. Under this policy, the Government will establish mechanisms to provide trunk infrastructure in the areas to be designated in a phased manner for township development. The provision of infrastructure will be on a cost-plus basis with long term contracts and minimum consumption criteria. The charges such levied will be know n as “External Development Charge” (EDC). The maximum period within which the trunk infrastructure is to be extended, will be determined on the basis of the Developers’ rating system to be established under this Policy – the higher the rating of the Developer, the shorter the period.

b) Access road-The Government will provide an access road of adequate width and construction specifications based on the use and scale of the Township. The feasibility of the same will be determined as part of the Preliminary Project Approval process and the detailed proposal for the same will form part of the Detailed Project Report to be submitted by the Developer. The cost of land acquisition and construction will be borne by the Developer in part or full on the basis of the sharing of benefits between the Developer and other users of the road.

c) Bulk water supply-The Government will provide untreated drinking water of acceptable quality and in adequate quantity based on the use and scale of the Township. The cost of a dedicated trunk line from the nearest source/ tapping point to the Township will be borne by the Developer. The water supplied will be charged (EDC) on the basis of actual consumption at cost-plus rates. The agreement for supply will have provisions for minimum and maximum off-take.

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Integrated Township Planning2011d) Bulk power – electricity and gas-The Government will provide reliable supply of electricity with adequate capacity for load based on the use and scale of the Township. The cost of the dedicated electricity mains from the nearest electricity source to the Township will be borne by the Developer. The electricity supplied will be charged (EDC) on the basis of actual consumption at cost-plus rates. The agreement for supply will have provisions for minimum and maximum off-take.

The supply of gas will be based on location and availability of a gas main in the vicinity of the Township.

e) Land Procurement Support-The primary responsibility for procurement of land in adequate quantities corresponding to the proposed use and scale of the Township is that of the Developer. However, the Government recognizes that often there remain residual patches of land and offers its support in procuring these. These may include both private land and government land.

If in the residual land, some Government land is present, the same will be sold at market rates provided such lands form pockets within the project area, and not continuous pieces. In the case of Private Lands such residual land will be assembled through compulsory acquisition, or consent award or by way of negotiated purchase.

The maximum extent of government support in procurement of land including purchase of private land and sale of government land to the Developer will be determined on a case to case basis on the basis of the importance of the Township from the point of view of the Government’s public policy objectives as well as the rating of the Developer.

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5) FDI (Foreign Direct Investment):

The simplest explanation of FDI would be a direct investment by a corporation in a commercial venture in another country. A key to separating this action from involvement in other ventures in a foreign country is that the business enterprise operates completely outside the economy of the corporation’s home country.

The definition of FDI originally meant that the investing corporation gained a significant number of shares (10 percent or more) of the new venture. In recent years, however, companies have been able to make a foreign direct investment that is actually long-term management control as opposed to direct investment in buildings and equipment.

Foreign Direct Investment (FDI) has been recognized as one of the important drivers of the economic growth of our country. Government has, therefore, been making all efforts to invite and facilitate FDI and investment from Non Resident [NRIs- which also includes Persons of Indian Origin (PIO)] to complement and supplement domestic investment.

Foreign Direct Investment in India is allowed through four basic routes namely, a) Financial collaborations, b) Technical collaborations c) Joint ventures, d) Capital markets via Euro issues, and private placements or preferential allotments.

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Integrated Township Planning20115.1) Eligibility for Investment in India:

• A person resident outside India (other than a citizen of Pakistan) or an entity incorporated outside India, (other than an entity incorporated in Pakistan) can invest in India, subject to the FDI Policy of the Government of India.

• A person who is a citizen of Bangladesh or an entity incorporated in Bangladesh can invest in India under the FDI Scheme, with the prior approval of the FIPB.

• Overseas Corporate Body. OCBs have been de-recognized as a class of investors in India with effect from September 16, 2003. Erstwhile OCBs which are incorporated outside India and are not under adverse notice of Reserve Bank can make fresh investments under the FDI Scheme as incorporated non-resident entities, with the prior approval of Government of India if the investment is through Government Route; and with the prior approval of Reserve Bank if the investment is through Automatic Route.

• Prohibition on investment in India: Foreign investment in any form is prohibited in a company or a partnership firm or a proprietary concern or any entity, whether incorporated or not (such as, Trusts) which is engaged or proposes to engage in the following activities:

It is clarified that “real estate business” does not include development of townships, construction of residential / commercial premises, roads or bridges educational institutions, recreational facilities, city and regional level infrastructure, townships. It is further clarified that partnership firms /proprietorship concerns having investments as per FEMA regulations are not allowed to engage in print Media sector.

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Integrated Township Planning20115.2) FDI Policy:

Foreign direct investment is freely allowed in all sectors including the services sector, except a few sectors where the existing and notified sectoral policy does not permit FDI beyond a ceiling. FDI for virtually all items/activities can be brought in through the Automatic route under powers delegated to the Reserve Bank of India (RBI), and for the remaining items/activities through Government approval. Government approvals are accorded on the recommendation of the Foreign Investment Promotion Board (FIPB).

Policy for Automatic route:

a) New Ventures-All items/activities for FDI/NRI investment up to 100% fall under the Automatic route except the following:

• All proposals that require an Industrial License which includes: The item requiring an Industrial License under the Industries (Development & Regulation) Act, 1951;Foreign investment being more than 24 per cent in the equity capital of units manufacturing items reserved for small scale industries; and All items which require an Industrial License in terms of the location policy notified by Government under the New Industrial Policy of 1991.

• All proposals in which the foreign collaborator has a previous/existing venture/tie up in India in the same or allied field. All proposals relating to acquisition of shares in an existing Indian company by a foreign/NRI investor. All proposals falling outside notified sectoral policy/caps or under sectors in which FDI is not permitted.

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• RBI has granted general permission under Foreign Exchange Management Act (FEMA) in respect of proposals approved by the Government. Indian companies getting foreign investment approval through FIPB route do not require any further clearance from RBI for the purpose of receiving inward remittance and issue of shares to the foreign investors

• For inward remittance and issue of shares to NRI up to 100 per cent equity also, prior permission of RBI is not required. These companies have to file the required documents with the concerned Regional offices of RBI within 30 days after the issue of shares to NRIs.

b) Existing CompaniesBesides new companies, automatic route for FDI/NRI investment is also available to the existing companies proposing to induct foreign equity. For existing companies with an expansion programme, the additional requirements are that:

• Increase in equity level must result from the expansion of the equity base of the existing company without the acquisition of existing shares by NRI/foreign investors.

• Money to be remitted should be in foreign currency.

• Proposed expansion programme should be in the sector(s) under automatic route. Otherwise, the proposal would need Government approval through the FIPB. For this the proposal must be supported by a Board Resolution of the existing Indian company.

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5.3) Policy for Government Approval:

All activities which are not covered under the automatic routes cited above. Government approvals for FDI/NRI through the FIPB (Foreign Investment Promotion Board) shall be necessary. Any change in sectoral policy/sectoral equity cap is notified from time to time by the Secretariat for Industrial Assistance (SIA) in the Department of Industrial Policy & Promotion.

For greater transparency in the approval process, Government has announced guidelines for consideration of FDI proposals by the FIPB.

a) Procedure for obtaining Government Approval:

• All proposals for foreign investment requiring Government approval are considered for approval by the Foreign Investment Promotion Board (FIPB). The FIPB also grants composite approvals involving foreign investment/foreign technical collaboration.

• For seeking the approval applications in form FC-IL for FDI other than NRI Investments and 100% EOU should be submitted to the Department of Economic Affairs (DEA), Ministry of Finance

• FDI applications with NRI Investments and 100% EOU should be submitted to the Entrepreneur Assistance Unit (EAU) of Secretariat of Industrial Assistance (SIA), Department of Industrial Policy & Promotion.

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• Plain paper applications carrying all relevant details are also accepted. No fee is payable. The following information should form part of the proposals submitted to FIPB: -

o Whether the applicant has had or has any previous/existing

financial/technical collaboration or trade mark agreement in India in the same or allied field for which approval has been sought; and If so, details thereof and the justification for proposing the new venture/technical collaboration (including trade marks).

o Applications can also be submitted with Indian Missions abroad

who will forward them to the Department of Economic Affairs for further processing.

• Foreign investment proposals received in the DEA are placed before the Foreign Investment Promotion Board (FIPB) within 15 days of its receipt. The recommendations of FIPB in respect of project proposals involving a total investment of up to Rs. 6 billion are considered and approved by the Finance Minister. Projects with a total investment exceeding Rs. 6 billion are submitted to the Cabinet Committee on Economic Affairs (CCEA) for decision.

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Integrated Township Planning20115.4) Condition for FDI for development of Integrated Township:

• The foreign company intending to invest, shall be registered as an Indian Company under Companies Act 1956 and will henceforth be allowed to take up land assembly and its development as a part of Integrated Township Development. All such cases would be processed by FIPB on the recommendation of Ministry of Urban Development & Poverty Alleviation and other concerned Ministries / Departments. Ministry of Urban Development & Poverty Alleviation will develop an exclusive cell to deal with such cases.

• The core business of the company seeking to make investment should be integrated township development with a record of successful execution of such projects elsewhere.

• The minimum area to be developed by such a company should be 100 acres for which norms and standards are to be followed as per local bylaws / rules. In the absence of such bylaws / rules, a minimum of 2000 (two thousand) dwelling units for about 10000 (ten thousand) population will need to be developed by the investor.

• The investing Foreign Company should achieve clear milestones once their proposal has been approved.

• Conditions regarding the use of land for commercial purposes, development charges, external development charges and other charges as laid down in Master Plan / Bylaws, preparation of layout and building plan, development of internal and peripheral development, development of other infrastructure facilities including the trunk services etc., will be the responsibility of the investor as per planning norms and standards on similar lines as those applicable to local investors.

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• Land with assembled area for peripheral services such as police stations, milk booths will be handed over free of cost to the Government / local authority / agency as the case may be.

• The Developer will retain the lands for community services such as (i) schools (ii) shopping complex (iii) community centers (iv) ration shop (v) hospital / dispensary. These services will be developed by developer himself and shall be made operational before the houses are occupied.

• The developer, after properly developing playgrounds, park, will make it available to the local authorities free of cost.

• The developer will ensure the norms and standards as applicable under local laws / rules.

• Complete at least 50% of the integrated project within five years from the date of obtaining all clearances.

• Do not repatriate original investment before three years from completion of minimum capitalization. Early exits require prior approval of the Foreign Investment and Promotion Board.

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Integrated Township Planning20115.5) Merits/Demerits of Foreign Direct Investment:

a) Merits-Attracting foreign direct investment has become an integral part of the economic development strategies for India. FDI ensures a huge amount of domestic capital, production level, and employment opportunities in the developing countries, which is a major step towards the economic growth of the country. The effects of FDI are by and large transformative. The incorporation of a range of well-composed and relevant policies will boost up the profit ratio from Foreign Direct Investment higher. Some of the biggest advantages of FDI enjoyed by India have been listed as under:

• Economic growth- This is one of the major sectors, which is enormously benefited from foreign direct investment. A remarkable inflow of FDI in various industrial units in India has boosted the economic life of country.

• Trade- Foreign Direct Investments have opened a wide spectrum of opportunities in the trading of goods and services in India both in terms of import and export production. Products of superior quality are manufactured by various industries in India due to greater amount of FDI inflows in the country.

• Employment and skill levels- FDI have also ensured a number of employment opportunities by aiding the setting up of industrial units in various corners of India.

• Technology diffusion and knowledge transfer- FDI apparently helps in the outsourcing of knowledge from India especially in the Information Technology sector. It helps in developing the know-how process in India in terms of enhancing the technological advancement in India.

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• Linkages and spillover to domestic firms- Various foreign firms are now occupying a position in the Indian market through Joint Ventures and collaboration concerns. The maximum amount of the profits gained by the foreign firms through these joint ventures is spent on the Indian market.

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b) Demerits of FDI in India: FDI has been a booming factor that has bolstered the economic life of India, but on the other hand it is also being blamed for ousting domestic inflows. FDI is also claimed to have lowered few regulatory standards in terms of investment patterns

• The disadvantages of foreign direct investment occur mostly in case of matters related to operation, distribution of the profits made on the investment and the personnel. One of the most indirect disadvantages of foreign direct investment is that the economically backward section of the host country is always inconvenienced when the stream of foreign direct investment is negatively affected.

• The various disadvantages of foreign direct investment are understood where the host country has some sort of national secret – something that is not meant to be disclosed to the rest of the world. It has been observed that the defense of a country has faced risks as a result of the foreign direct investment in the country.

• At times it has been observed that certain foreign policies are adopted that are not appreciated by the workers of the recipient country. Foreign direct investment, at times, is also disadvantageous for the ones who are making the investment themselves.

• Foreign direct investment may entail high travel and communications expenses. The differences of language and culture that exist between the country of the investor and the host country could also pose problems in case of foreign direct investment.

• Another major disadvantage of foreign direct investment is that there is a chance that a company may lose out on its ownership to an overseas company. This has often caused many companies to approach foreign direct investment with a certain amount of caution.

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6) Challenges of integrated townships

6.1) Challenges related to municipal compliances

Any township development project the municipality will usually command .The following project inputs

• Land falling within the public environment such as road reserves, public open spaces and allied access and services servitudes. In many cases vacant land set aside for social infrastructure will also vest with the municipality.

• Existing capital assets, including most elements of the engineering and social infrastructure, such as community halls and recreation facilities.

• The finance necessary to modify, extend or install municipal infrastructure will be sourced from (or accessed through) municipal budgets.

• Human resources and skills to oversee design and construction, maintenance and continuing operation of infrastructure will generally be found in municipal departments.

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6.2) Early legal compliance planning It is extremely difficult to negotiate the complex web of requirements and legislation. To prevent major conflicts, delays and stoppages, the following is recommended:

• Addressing compliance issues from the very beginning of the project development process

• Recruiting the best possible legal expertise at the beginning of the project process.

• Doing the necessary and legal compliance planning and programming up front, and synchronizing other components of the project with this component.

• While much of the public-sector land, capital, human resources and approvals required for township development projects are under municipal authority, national and provincial government command a number of key project inputs. These may include important public infrastructure, such as police stations, health facilities, schools, courts, social welfare services and home affairs facilities. In addition, national and provincial authorities frequently control access to vacant and/or underutilized facilities that need to be redeveloped as part of township renewal.

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6.3) Financial Risk Challenges

Since property investments are typically based on long-term return periods and because fixed investment cannot simply be packed up and moved elsewhere, sound investment decisions are based on an assessment of the risks involved and a calculation of the trade-off between risk and profitability. Pre-investment risk assessments generally cover issues such as:

• Crime: What will the trends be? Will the authorities be able to manage it?

• Neighborhood: Will investors be able to strike up a cooperative relationship with organizations in the neighborhood?

• Regulation and development control: Will the authorities be willing and able to regulate illegal uses in the surrounding areas? Will the authorities be likely to create a whole new set of rights just down the road and flood the market?

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Chapter 2-Internal Factors /Issues Of Integrated Townships

7) Township Planning

7.1) Criteria for Township Development:

As per Town Planning Gujarat State-The minimum area to be developed should be 100 acres subject to local rules. In the absence of local rules and bye-laws at least 2,000 dwelling units for a population of 10,000 needs to be built.

Criteria for Special Township Area Requirement. - Any suitable area having sufficiently wide means of access (not less than 18 mt. wide) can be identified for the purpose of development as “Special Township”. The area notified under the Special Township shall be one, contiguous, unbroken and uninterrupted and in any case shall not be less than 100 acres at one place which shall not include the area under the following

• Forest, water bodies like river, creek canal, reservoir, lands falling within the belt of 500 mt. from the HFL of major lakes, dams and its surrounding restricted area, lands in the command area of irrigation projects,

• Land falling within the belt of 200 mt. from the historical monuments and places of Archeological importance, Archeological monuments, Heritage precincts and places, any restricted areas,

• Gaothan areas or congested areas, truck terminus specially earmarked on Regional Plan, wildlife corridors and biosphere reserves, Eco-sensitive

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Zone/area, quarry Zone and recreational tourism zone catchment areas of water bodies.

• Defense areas, Cantonment areas, notified area of SEZ, designated Port/ Harbor areas, designated Airport areas, quarry zone.

7.2) Town planning norms

AS per the Gujarat Town Planning Norms the following are the factors taken into consideration.

a) Land use mix-The basic land use mix is related to the classification of Townships by use and to the minimum criteria for eligibility, wherein a minimum proportion of built-up area is to be allocated to the proposed economic activity. In addition to this, land use norms will cover compatibility of adjacent uses, integration with transportation network, distribution of service facilities and provisions to ensure social inclusiveness.

b) Density, height and bulk-To ensure predictable infrastructure requirements; the overall density of the Township will be specified, both in terms of residential population density and in terms of the density of Built-Up-Area (expressed in FSI). To ensure harmonious built form the developer will be required to submit an Urban Design Plan specifying the characteristics of the building envelope such as height, ground coverage, margins, etc for all the buildings proposed in the Township.

c) Provide On-site Physical and Social Infrastructure-A separate and specific set of norms for provision of physical and social infrastructure will be issued as part of this Township Policy. Conformity to these norms will have to be established by the Developer in the Detailed Project Report to be submitted for approval. Once the DPR is approved, there will be no

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separate procedure for development permissions. In the case of Townships within the jurisdiction of sanctioned Development Plans of cities, the norms prescribed by the respective Development Plans will apply.

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• On-site Physical Infrastructure-The norms for provision of physical infrastructure will cover the following:

o Road network and transportation-the road network must be

provided in a well defined hierarchy from arterial to collector streets to access streets as per norms specified. Adequate provision shall be made for public transport. Both the road network and transport facilities should be coordinated well with the land use distribution. The norms will also specify provisions for pedestrian and bicycle tracks.

o Water supply-The Developer must establish a system for the

distribution of drinking water as per prescribed norms with adequate provision for treatment, storage and distribution network. The capacities of these facilities are to be determined considering the resident population, workforce in the economic activities, as well as firefighting requirements. Provision should be made for using recycled water for requirements such as landscaping.

o Integrated waste management-The key requirement for the

waste management system is that the Township should have ‘zero externality’. Therefore it is expected that all Developers make suitable arrangements for Integrated Waste Management, combining Sewerage and Solid Waste Management. The IWM systems should recycle as much water and nutrients as possible. The possibility of harnessing energy from waste may also be considered

o Power distribution-The developer shall ensure reliable power

distribution within the Township area. The developer may draw the power from existing supply system or may go in for captive power generation.

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• On-site Social Infrastructure-The norms for provision of social infrastructure will cover the following:

o Educational facilities-Adequate number of primary and

secondary schools should be provided as per norms, based on the resident population.

o Health facilities-Adequate number of primary health facilities

and nursing homes/ polyclinics should be provided as per norms, based on the resident and floating population.

7.3) Development Procedure for Special Township

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a) Location Clearance. - The proposal for development of Special Township, along with details of ownership of land or Development rights of lands in the proposal scheme, site plan, part plan of sanction regional plan, shall be submitted to Government in Urban Development Department for grant of location clearance. Upon receipt of such proposal, depending upon the merits of the case, location clearance may be granted by Government u/s 18/2 of MR&TP Act.This location clearance will be valid for one year from the date of issue and if within such period the letter of intent and final approval is not taken or not applied for, such clearance/approval will stand lapsed unless it is renewed by Govt. for sufficient reasons. Application for renewal has to be made to Govt. before expiry of one year.

b) Letter of intent-Upon receipt of location clearance from the Government, the developer shall submit the proposal in respect of Special Township to Collector, along with the environmental clearance as mentioned in Regulation No. 1.4 for issue of letter of intent. The proposal shall contain ownership rights/development rights, document in respect of at least 50 % of area under the scheme .Letter of intent shall be issued within a period of 45 days from the date of receipt of the completed full & final proposal. The letter of intent shall be valid for six months unless renewed.

c) Layout and building -Layout plan showing all details of area utilized under roads, open spaces for parks, garden and playground amenities. in respective field and team .Detail layout plan, building plans of all development with area headed by an Architect of all sector and individual plots and built up area/FSI proposed should be submitted.

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d) Final Approval- The Developer shall submit the layout plan of the entire township area, sector-wise detailed building plans and details of phasing, for final sanction The developer shall also submit an undertaking and execute an agreement about development and maintenance of basic infrastructural amenities in future with bank guarantee of 15 of its development costs.

Every application shall be accompanied by –

• Ownership Document: 7/12 extract/ Property Card, ownership right Document in original with list of such documents.

• Extent: Village maps showing the extent of area and authenticated measurement plan/ gut book of the land in original and list of such documents.

• An authenticated copy of location clearance and letter of intent environmental clearance is applicable.

e) Implementation & completion

• Development of Basic infrastructure & amenity shall be completed by the developer as per phases of scheme. Development of the scheme shall be completed within 10 years from the date of final sanction to the layout plan of scheme.

• No building in the scheme is permitted to be occupied in any manner unless occupancy certificate is issued by Collector. Final completion certificate for the scheme is to be issued by Collector .

• Application for occupation certificate or final completion certificate shall be submitted along with a declaration and undertaking by the developer and his structural consultant.

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8) Legal Issues/Policies of Integrated Township

8.1) General Norms

The overall planning of the integrated township shall be such that the project adequately meets detailed norms and specifications including the following as per the Maharashtra Town Planning Act 1966:

• Residential

• Commercial

• Educational

• Amenity Spaces

• Health Facilities

• Parks, Gardens and Play Grounds.

• Public Utilities.

• Transportation

a) Residential. - The residential area should be well defined in clusters or neighborhoods or in plotted development with proper road grid. Out of the total built-up area proposed to be utilized which is permissible as proportionate to zoning of area under such township at least 60% of the area may be used for purely residential development and further out of the total built-up area proposed to be utilized for residential development, 10% of the same shall be built for residential tenements having built-up area up to 40 sq.mt. The residential area should be well defined in clusters or neighborhoods or in a plotted development with proper road grid. Out of the total area of the township, not more than 25% of the area may be used for purely residential development

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b) Commercial - The commercial area shall be properly distributed in hierarchical manner such as convenient shopping, community centre etc. The commercial area shall be suitably distributed within the township area, providing for ease of trade / commerce / shopping / community utilities / centers.

c) Educational. - Comprehensive educational system providing education from primary to secondary should be provided as per the requirement. The area allocation should be on projected population base and as far as possible the educational complex should not be concentrated at one place. All such complexes should have area adequate allocation for playground. Minimum area required for educational purpose shall be as per prevailing planning standards. Comprehensive infrastructure to support multi level educational systems right from pre-schooling to higher and professional courses in diverse segments shall be planned and provided for the township population.

d) Amenity Spaces. - The area allocation for amenity space providing for amenities like market, essential shopping area, recreation centers, town hall, library etc. should not be less than 5 of gross area and should be evenly placed. The area allocation for amenity space providing for amenities like market, essential shopping area, recreation centers, cultural community centers, town hall, library, etc., shall be not less than 10% of gross area with even placement.

e) Health Facilities. - Adequate area allocation for health facilities for primary health should be provided for. Minimum area required for health facilities shall be as per prevailing planning standards.

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f) Public Utilities. - Appropriate area allocation should be provided for (a) power receiving station/ substation, (b) water supply system, (c) sewerage and garbage disposal system, police station Public parking, (f) cemetery/cremation ground, (g) bus station, fire brigade station and other public utilities as per requirements.

g) Parks, Gardens and Play grounds. - The township shall also provide adequate area as parks/ gardens/play grounds. This should be exclusive of the statutory open spaces to be kept in smaller layout and should be distributed in all residential clusters. This 20% area should be developed by the developer for such purposes and kept open to all general public. At least 15% of the total area shall be provided for parks / gardens / play grounds. This shall be exclusive of the statutory open spaces to be kept in smaller internal layouts and shall be distributed evenly in all residential clusters and the access shall be kept open to all general public.

h) Transport and Communication. - The entire area of township shall be well knitted with proper road pattern, taking into consideration the linkages with existing roads within the township and outside area as well. All such roads shall be developed by the developer as per standard and road widths shall be as given. Classified Road - as prescribed. Main road/Ring road - 18 to 24 meter wide. Internal road - as per prevailing byelaws applicable to Regional Plan subject to minimum road width 9 mt. The entire area of township shall be well knitted with proper road pattern with bus bays at appropriate places, taking into consideration the linkages with existing roads within the Township and outside area as well.

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All such roads shall be developed by the developer as per IRC standards and road widths as given below:

• Internal Roads - a minimum width of 12 mts.

• Main roads - a minimum width of 18 to 24 mts

• Ring Roads and major access roads - four lane with a minimum of 33 mts & a median for road safety

• Foot Paths - Minimum of 5 mts. on either side

• Space for avenue trees - Minimum of 3 mts on either side.

8.2) Policies for Integrated Township50

Integrated Township Planning2011Special Township Policy

Government of India has announced its policy to permit 100% Foreign Direct Investment (FDI) for development of integrated township. In order to encourage private investment in housing sector and to facilitate housing at affordable prices, the following incentives will be available for projects under Special Township Area:-

• Non-agriculture permission will be automatic.

• Exemption from Urban Land (Ceiling and Regulation) Act, 1976.

• Government Land falling under township area shall be leased out to the developer at the current market rate.

• The condition that only agriculturist will be eligible to buy agriculture land shall not be applicable in Special Township Area.

• There shall be no ceiling limit for holding agriculture land to be purchased by the owner/developer for such project.

• There will be floating FSI in the township. Unused FSI of one plot can be used anywhere in the whole township.

• The stamp duty rates applicable in the Special Township area shall be 50% of prevailing rates.

• A Special Township Project shall be partially exempted from payment of scrutiny fee for processing the development proposal.

• 50% concession in payment of development charge.

8.3) Concessions for Townships (Maharashtra)

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Integrated Township Planning2011Special Concessions

• N.A. Permission. - Non-agriculture permission will be automatic. As soon as the scheme is notified, lands notified under Special Township area as per 1.2 will be deemed to have been converted into non-agriculture and no separate permission is required. Non-agriculture assessment however will commence from the date of sanction of scheme as per Regulation No.7(c).

• Stamp Duty. - The stamp duty rates applicable in Notified Special Township area shall be 50 of prevailing rates of the Mumbai Stamp Act.

• Grant of Government Land. - Any Government land falling under township area shall be leased out to the developer at the prevailing market rate on usual terms and conditions, without any subsidy.

• Relaxation from Mumbai Tenancy and Agriculture Land Act. - The condition that only the agriculturist will be eligible to buy the agriculture land shall not be applicable in Special Township area.

• Ceiling of agriculture land. - There shall be no ceiling limit for holding agriculture land to be purchased by the owner/developer for such project.

• Exemption from Urban Land - Special Township Projects will be exempted from the purview of Urban Land (Ceiling and Regulation) Act; 1976.(g) Scrutiny fee. - A Special Township Project shall be partially exempted from payment of scrutiny fee being levied by the Collector/Planning Authority for processing the development proposal on certain terms and conditions as may be decided by the Collector/Planning Authority.

• Floating FSI. - There will be floating FSI in the township. Unused FSI of one plot can be used anywhere in the whole township.

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• Special benefits / concessions in respect of Star Category Hotels, Hospitals and Multiplexes /Property Tax shall be provided.

8.4) Development Control Regulations (Maharashtra)

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a) Prevailing regulations of sanctioned Zonal Plan shall be applicable, except those expressly provided in these guidelines.

• The total built up area / FAR of entire gross area of the township, will be determined for different zones. Inter-se flexibility will be permitted to the developers in deployment of the overall FAR within the components of township for commercial exploitation. Height of building shall be as specified in Zonal Regulation

• In respect of each integrated township, the structural designer of principal developer / subsidiary developer shall submit a declaration with project report to the Authority about the construction of building.

• High-rise flatted residential developments would be encouraged.

• The Developer shall be responsible to ensure that the Township remains free of slums and unauthorized developments.

• The Development Plan shall earmark adequate and appropriate land-fill sites for disposal of solid waste including adequate land for transfer stations both within and outside the township area.

b) Prevailing Development Control Regulations of sanctioned Regional Plan shall be applicable, except those expressly provided in these Special Regulations.

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• Special Township– The total built-up area/FSI of entire gross area of the Special Township in urbanisable zone (U-2) & Green Zone (G1, G2) will be 0.5. There will be no limit of total built-up area / FSI for the development of individual plots.

• Height of building shall be as per prevailing Byelaws as specified in Regional Plan. However, it may be increased subject to provisions of fire fighting arrangements with prior approval of Fire Advisor, Government of Maharashtra.

• 50% of the gross area of the project shall be kept open while the project of Special Township shall be executed on the remaining 50% land with gross built-up area/ FSI of 0.50 worked out on the entire gross area of the project.

• Further, while developing such projects, it would be obligatory on the part of the developer to provide and develop all the infrastructure facilities including sites required for public purposes as per the prescribed planning norms.

• As regards 50% of land which is required to be kept open, the same shall be made free of encumbrances and no development except town level open amenities shall be permissible thereon.

c) Other Special Regulations.

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In every Special Township proposal the structural designer of developer has to submit declaration with project report to Collector / Planning Authority about the construction of building

The following shall not be included in covered area for built up area and F.S.I. calculations:-

• Area covered by the staircase rooms for stair flights of width 0.75 m. & above, in case of row housing & pent houses and duplexes, 1 mt. in case of residential building, 1.2 mt. & above in case of commercial (mercantile) buildings, 2.00 mt. & above in the case of public & semi-public building, subject to payment of premium in consultation with Town Planning & Valuation Department. Area covered by lift room for a building with height up to 16 mt.

• Stilt floor space (exclusively for parking space) constructed under building of maximum cleared height 2.4 mt. and which shall be open at least from three sides.

• Balcony or balconies of a minimum width of one mt. may be permitted free of F.S.I at any upper floor, subject to maximum of 1/3rd length of perimeter of building and such balcony projection shall be subject to the following conditions :-

o No balcony shall be allowed on ground floor.

o Balcony or balconies shall be permitted to project in the marginal

open space of not less than 3 mt. in width.o Notwithstanding anything contained in any other laws, rules,

regulations or bye-laws in force, a balcony shall not be permitted to be enclosed.

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• In special Township schemes at the rate of minimum 150 trees per ha. And 400 trees per hectare .respectively shall be planted and maintained by the developer

• Sale Permission. - It would be obligatory on the part of the developer firstly to provide for basic infrastructure and as such no permission for sale of plot/ flat shall be allowed unless her basic infrastructure as per Regulation is completed by the developer to the satisfaction of the Collector.

• In case the development is proposed in Phases & sale permission Js expected after completion of Phase wise basic infrastructure, such permission may be granted .

• Before granting such sale permission, Developer has to submit undertaking about the basic infrastructure to be provided & completed phase wise by Developer. The plots earmarked for amenities, facilities, and utilities shall be also simultaneously developed phase-wise along with residential/allied development.

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9) Environmental Clearances

The development contemplated in townships shall not cause damage to ecology, no case it shall involve topographical changes, changes in alignment of cross section of existing water course in any in the scheme area or adjacent to scheme area. Environmental clearance shall be obtained from the Ministry of Environment and Forest, Government of India as per directions issued by the MOEF’s notification dated 7th July 2004. The Township shall provide at least 20% of the total area as park/garden/playground with proper landscaping and open uses designated in the Township shall be duly developed by owner/developer. This amenity shall be open to general public without any restriction or discrimination.

All projects classified under two categories:

Category A: Will require clearance from MoEF based on recommendation by the Environmental Appraisal Committee (EAC)

Category B: Will require clearance from the on the State Environmental Appraisal Committee (SEAC)

The SEIAA will be constituted by Central Government based on nominations from State As earlier; no site development as well as construction can begin until EC is obtained. Steps involved in obtaining Environmental Clearance are Application for Prior EC has to be made in form 1(and Form 1A for construction projects) Form 1A is for Item 8 construction projects conceptual Plan to be provided.

• Screening- Category B projects (SEAC), whether EIA is required or not, Category B1 and B2 MOEF to issue guidelines for this. All projects under Item 8b classified as Cat. B1 (Cat. B1 projects would require EIA so all construction projects may not escape EIA entirely

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• Scoping – For Category A and B1 projects-TOR for EIA to be issued by EAC/SEAC. Scoping not required for item 8 category projects Appraisal based only on Form1& 1A.

• Public Hearing- Not applicable to all projects under Item 8 (even Cat. B1)

• Appraisal-For Item 8 Projects based on Form 1 & 1A (Cat. B2) + EIA Report for Cat. B1.To be done by SEAC within 60 days of receipt of complete application. To be placed before Competent Authority within next 15 days

Issue of prior environmental Clearance

• Decision to be communicated to applicant within 45 days of receipt of recommendations from SEAC

• Total period -105 days from date of completed application (about 3.5 months

• Provision for de-facto EC has been made-but based on recommendations of SEAC (to made public documents after expiry of stipulated period)

• Other clearances NOT required for submitting application (unless legally or technically required)

Environmental Clearance for Construction Projects

• Validity of EC - 5 years for completion of construction (extendable by another 5 years)

• Half-yearly compliance report (to EC conditions) to be submitted to regulatory authority (1st June and Dec 1st)

• Compliance reports to be Public documents

• On application

• Website of regulatory authority

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• Pending cases-provisions may be relaxed by MoEF or continued up to 1 year no relaxation in list of Schedule I.

Departures from Earlier / Draft Notification

• The criteria have been changed to Built-up area instead of investment, quantity of sewage discharge and number of occupants

• Construction projects not required to go to MoEF/EAC –only at SEAC

• EIA not required if categorized as B2 project

• Public Hearing not required for any construction project

• Upper limit of built-up area raised to 1, 50,000 sq. m. (from 1, 00,000 sq. m. earlier)

• Construction projects in cities with population> 30 lakhs NOT required now to go to MoEF

• For construction projects, appraisal can be done in the absence of other clearances. However, EC will be given only after submitting approved scheme/ building plans and other statutory approvals to SEAC.

Creation & Maintenance of Green cover

• The Township shall provide at least 15% of the total area as park / garden / playground with proper landscaping. The open spaces designated in the Township shall be duly developed and maintained by the developer and handed over to the BMRDA/LPA free of cost after full development of the township. This amenity shall be open to general public without any restriction or discrimination.

• In addition, the developer shall provide a green belt of 15 meters on either side of the main roads and of suitable width in respect of other roads.

• In the Economic infrastructure Zone/ Residential Zone and No Development Zone, trees at the rate of a minimum 150 Nos. and 400 Nos. per hectare shall be planted and maintained by the developer.

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10) Infrastructure Requirements

The entire Township should be an integrated one with all facilities within the boundaries of declared townships. All the onsite infrastructure, i.e. roads, including R.P. roads, approach road, street lights, water supply and drainage system shall be provided and maintained in future by the developer till urban local body is constituted for such area and the developer shall also carry out development of amenity or proposals, if any designated in the Regional plan, in accordance with the prevailing regulations.

a) Water supply. - The developer shall be required to develop the source for drinking water (excluding the groundwater source) or secure firm commitment from any water supply authority for meeting the daily water requirement of minimum 140 liters’ per capita per day exclusive of requirement of water for fire fighting and gardening. The storage capacity of the same shall be at least 1.5 times of the actual required quantity as determined by expected population (Resident and Floating) and other uses. The developer would be required to develop proper internal distribution and maintenance systems and shall specially undertake rain water harvesting, groundwater recharging and waste water recycling projects within the Township.

b) Drainage and Garbage disposal. - The developer shall make suitable and environment friendly arrangements for the disposal and treatment of sewage and solid waste as per requirements of Maharashtra Pollution Control Board. Recycling sewage for gardening shall be undertaken by the developer. The developer shall develop Eco-friendly garbage disposal system by adopting the recycling and bio-degradation system in consultation with Maharashtra Pollution Control Board.

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c) Power - The developer shall ensure continuous and good quality power supply to township area. The developer may draw the power from existing supply system or may go in for arrangement of captive power generation with the approval from concerned authority. If power is drawn from an existing supply system, the developer shall before commencement of development, procure a firm commitment of power for the entire township from the power supply company.

d) Social infrastructure

An integrated township always has the basic social infrastructure essentials. They are as follows:

• School: A quality school with education up to at least 10thstandard is setup within the township, reducing the travelling time between home and school and in turn providing the children with more time for play and studies.

• Medicare: A good healthcare facility with at least 50-plus beds and an emergency care is set up within the township, thereby facilitating residents.

• Recreation: Adequate space for basic sports such as football, cricket, tennis and badminton, fitness facilities including a gymnasium and swimming pools are set up within the township to enhance social lifestyle.

• Community centre: A spacious, well-decorated community centre with a club house and a function hall is set up within the township.

• Infrastructure and services: An integrated township needs to be self-contained in most aspects, essentially on basic infrastructure.

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• Road network: A well-planned road network both within the township and connecting to the nearest highway or main road is built, thereby easing communication.

• Communication infrastructure: Good quality telecom services are also made available within the township and nearby.

• Estate management: An integrated township should incorporate a well-equipped estate management.

• Infrastructure maintenance: Proper and regular maintenance of roads, pathways, parks, electrical and plumbing infrastructure, children play areas and common areas including community centre is essential for a well-developed integrated township.

• Security: Superior estate security and safety for all residents is a critical element of an integrated township.

• Shopping and entertainment: An integrated township is incomplete without shopping centers and entertainment areas.

• Entertainment: Quality cinema or multiplex, popular games and kid entertainment facilities should be established within the township.

• Shopping: Well-stocked grocery stores as well as shopping centers including branded garment stores, electronic goods should be established within the township.

• Food courts: Good quality and hygienic food courts with ample menu options should be established within the townships to cater to the taste buds of all types of residents.

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11) Land Acquisition

Land is one of the biggest resources of any country. The Government has to acquire land from the private individuals for setting up various infrastructure and other public purpose projects as well as developmental activities. Whereas the sovereign power of every State has the authority to appropriate land for the public purpose, every subject has the right to be heard before he is deprived of his property by the State. This is recognized as a legal right as per article 300A of the Constitution which provides as under:

Whereas land and its management is under the State List, Acquisition and requisitioning of property falls under the Concurrent List. To deal with the issues related to land acquisition and determining the amount of compensation in lieu of the land acquired by the Government, ‘The Land Acquisition Act’ was promulgated on the first day of March, 1894. The Act has been amended in the years 1919, 1921, 1923 and 1933 before independence and in the years 1962, 1967 and 1984 after independence.

With the enormous expansion of the State’s role in providing public welfare and economic development since independence, acquisition of land for public purposes has become far more important than ever before .Further, with changing scenario of industrialization, liberalization, urbanization and new economic policy, there is an immense pressure on land. Besides, recently the land is being acquired for setting up of Special Economic Zones (SEZs) to generate more employment. With the increased activity of land acquisition for public purposes as well as for setting up industries, the issues related to land acquisition and rehabilitation of the affected persons have been the matter of debate recently.

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Integrated Township Planning2011The provisions made under ‘The Land Acquisition Act, 1894’ have been found to be inadequate in addressing certain issues related to the exercise of the statutory powers of the State for involuntary acquisition of private land and property as acknowledged in the Statement of Objects and Reasons of the aforesaid Bill.

As per the Statement of Objects and Reasons of the Bill, the provisions made under the amending legislation seek to extend the provisions of the extent policies or statutes for rehabilitation and resettlement of those affected by the acquisition of land under the Act.

Further the legislation seeks to provide for the following:-

• Restricting the Stat e intervention to acquire land for companies to the extent of a limited portion of the total area of land required when the ‘person’ which includes any company or associations or body of individuals has already purchased the rest of the land through private negotiations;

• To provide for the alternative mechanism of civil courts for Disposal of disputes relating to land acquisition compensation in a time bound manner;

• To provide a fair compensation at market value commensurate with the purpose for which the acquired land would be used;

• To ensure that physical possession of the land is taken over and the amount of compensation is paid within a defined period from the date of the compensation award.

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• Return of the land to the appropriate Government when any land or part thereof, acquired under the Act remains unutilized for a defined period from the date of taking over possession.

11.1) Procedure for the Land Acquisition

a) InvestigationWhen a local authority or a company requires a land, an application is required to be made by it to the revenue authority.

The application should be accompanied with a copy of the plan showing survey nos., purpose of acquisition and the reason for the particular site to be chosen and the provision made for the cost of the acquisition.

After the government has been fully satisfied about the purpose, the least area needed, and other relevant facts as provided under land acquisition rules, it will issue a notification under Section 4 of the act that the particular land is required for public purpose.

One of the revenue officers is appointed as the collector to hold an inquiry under Section 5-A of the Act.

After notification the owner is prohibited from selling his property or disposing of it and prevented from carrying out any works of improvements for which no compensation will be paid if executed without prior permission from the collector.

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b) Objection and ConfirmationObjections are invited from all persons interested in land within thirty days from the date of notification.

The objections will be valid on one or more of the following grounds:

That the purpose for which the land is proposed for acquisition is not a public purpose.

That the land is not or less suitable than another piece of land for the said purpose. That the area under acquisition is excessive. That the acquisition will destroy or impair historical or artistic monuments or will desecrate religious buildings, graveyards and the like.

The collector after hearing the objections will submit his report to the government who will finally declare the land for acquisition. After notification the collector proceeds with the claim. He has the site marked out, measured and a plan of the same is made.

c) Claim and Award

The collector will issue notices under Section 9 to all persons interested in the acquisition to file their claim reports.

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The collector is not to be a party to the proceedings, is to possess an expert knowledge on valuation, and offers a fair price to an owner and checks that the public funds are not wasted.

The claim filed should contain the names of the claimants and co-shares if any rents or profits for last three years and a valuation report of the land from an architect or an engineer.

The government can abandon the acquisition proceedings by simply canceling the notification. However, in that case compensation has to be paid under Section 48(2).

In determining the compensation the market value of the land is determined at the date of notification. The rise and fall in the value during the period of transaction and notification is taken into consideration.

d) Compensation is also payable when:

o Part of the property is proposed for acquisition in such a manner

that the remainder depreciates in value.

o When the land notified for acquisition has standing crops or trees.

o If the person interested has to change his place of residence or

business then the excess rent payable for the new premises is also considered for compensation.

Matters which are not taken into consideration for the purpose of land acquisition are:

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o The degree of urgency which has led to the acquisition

o Any disinclination of the person interested to part with the land.

o Any increase in the land value likely to accrue from the use to

which it will be put when acquired.o After necessary inquiries the collector declares his award showing

true area of the land, total amount of compensation payable and apportionment of compensation if there are more than one owners or claimants.

o The collector has to make the award under section 11 within a

period of two years from the date of notification.

e) Reference to CourtAny person interested to whom the award is not satisfactory can submit a written application to the court. This application should be made within six weeks from the date of declaration of the award.

f) ApportionmentIn apparent of the compensation each of the claimants are entitled to the value of his interest, which he has lost, by compulsory acquisition. Thus it is required to value a variety of interest, rights and claims in the land in terms of money.

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11.2) Determination of Market Value of Land

As per the principal Act, (section 11 (1)(ii)) states that the Collector shall make an award for the compensation which in his opinion should be allowed for the land.46 Clause 13 of ‘The Land Acquisition (Amendment) Bill, 2007’ seeks to insert Section 11B in the Principal Act. The aforesaid clause provides the following with regard to the determination of market value of land:—

“11B. (1) The Collector shall adopt the following criteria in assessing and determining the market value of the land,—

• the minimum land value, if any, specified in the Indian Stamp Act, 1899 for the registration of sale deeds in the area, where the land is situated; or

• The average of the sale price for similar type of land situated in the village or vicinity, ascertained from not less than fifty per cent of the sale deeds registered during the preceding three years, where higher price has been paid; or

• The average of the sale price, ascertained from the prices paid or agreed to be paid for not less than fifty percent of the land already purchased for the project where higher price has been paid, for the purpose of item (iii) of clause (f) of section 3, whichever is higher.

Where the provisions of sub-section (1) are not applicable for the reason that:

• The land is situated in such area where the transactions in land areRestricted by or under any other law for the time being in force in that area;

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• the registered sale deeds for similar land as mentioned in clause (i) of sub-section (1) are not available for the preceding three years; or the minimum land value has not been specified under the Indian Stamp Act, 1899 by the appropriate authority, the concerned State Government shall specify the floor price per unit area of the said land based on the average higher prices paid for similar type of land situated in the adjoining areas or vicinity, ascertained from not less than fifty per cent of the sale deeds registered during the preceding three years where higher price has been paid, and the Collector may calculate the value of the land accordingly.

The Collector shall, before assessing and determining the market value of the land being acquired under this Act,—

• Ascertain the intended land use category of such land; and47 take into account the value of the land of the intended category in the adjoining areas or vicinity, for the purpose of determination of the market value of the land being acquired.

• In determining the market value of the building and other immovable property or assets attached to the land or building which is to be acquired, the Collector may use the services of a competent engineer or any other specialist in the relevant field, as may be considered necessary by the Collector.

• The Collector may, for the purpose of determining the value of trees and plants, use the services of experienced persons in the field of agriculture, forestry, horticulture, sericulture, or any other field, as may be considered necessary by him.

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Case Study

The Magarpatta model for land acquisition

In an equitable and inclusive model that replaces coercive land acquisition and exclusive development projects, 123 farm families in Pune pooled 400 acres of farmland and set up a private limited company that developed a commercial-cum residential project. These farmers own shares in the company proportionate to the value of their land. Plus they have got plush homes, earn dividends on the shares they hold, rent from tenants and income from contractual work for the company Long before the nation woke up to the violent protests against ?forced? Land acquisitions for Special Economic Zones (SEZs), a small group of farmers on the fringes of Pune saw the writing on the wall and decided to act before the process of globalization and development swallowed up their ancestral farms.

The land they tilled has been under the Pune municipal jurisdiction since 1960, though it was still an agricultural zone. But in 1982, the Pune Municipal Corporation marked it as a future urbanisable zone. In its draft development plan, this meant that the government could easily acquire the land under the Urban Land Ceiling Act.

The Magar clan and their immediate neighbors, comprising 123 families that trace their ancestry back three centuries, had through the 1960s and 1970s clung together to oppose the municipal administrations plan to urbanize their land. They were content with the steady income afforded by the sugarcane harvests, though some farmers in the neighborhood, lured by the quick buck, had sold their lands to real estate developers.

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Integrated Township Planning2011By the late-80s, the Magars realized that the city, already bursting at the seams, would eventually claim their land for infrastructure development. ? It finally dawned on us that we were fighting a losing battle against rapid urbanization, and this meant they had to act soon

The Magars decided that they would develop the land themselves. The fact that they knew nothing about land development and had little money did not deter them.

As the name Magarpatta Suggests, the Magar clan dominated, owning 40% of the total land or the largest patta (land strip) located next to the Hadapsar Industrial Estate.

A young entrepreneur Satish Magar owned around 100 acres of land. Otherwise the average landholding per family was between 2 and 4 acres. More than 90% of the farmers were Marathas while a few were from the Mali and Sonar communities. Together they managed to pool together 400 acres before requesting architect Hafeez Contractor to draft a private township plan, which was submitted to the concerned departments of the state administration for approval. Amid great apprehension, the families applied for conversion of the entire stretch into a non-agricultural zone.

A new government came to power in Maharashtra in 1995, while the idea was still at a very nascent stage. Seeking government approval proved an uphill task as applications and files moved from one department to another at a snail’s pace. At subsequent informal meetings, the families began expressing concern over livelihoods as they had known only farming till then. Magarpatta was going to be a re-enactment of Pimpri-Chinchwad, but with a focus on new age industries like software and business process outsourcing.

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Integrated Township Planning2011The idea was that each family got shares equal to the size of their landholding. The company was registered as the Magarpatta Township Development and Construction Company Limited.

Today, the project is popularly referred to as Magarpatta City. It boasts ISO 9001:2000 certification, putting it at the centre of the discourse around offering a fair deal to landowners whose lands have been acquired or are in the process of being acquired under various development projects.

It was after a five-year-long wait in 1998 that the development plan of Magarpatta gathered momentum. Farmers got their land titles (non-agricultural) cleared by 1999. By now, the 123 families had built up a consensus on setting up a private enterprise.

However, around 65 acres of land had been sold off by some families in the interim; this had to be reclaimed. The company was run by the managing director and technical director in consultation with eight board members drawn from the shareholding families. Every family was an equity shareholder of the company. Each share was equivalent to 1 square meter of land and cost Rs 100, in 1998. The current price per share is approximately Rs 1,000. Shares could be sold only to member families.

The approximate price of an acre of land that was Rs 1.20 crore in 2000 rose to Rs 1.50 crore in 2007. Thirty per cent of the total cost of each construction was earmarked as cost of land at the current price and paid to the shareholders. The family has the option of reinvesting the amount in the company, in the form of a term deposit at an appropriate rate of interest (12.5% for three years, 11.5% for one year, and 10.5% for three months).

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Integrated Township Planning2011There were two kinds of shares initially -- a preferential share and an equity share. The preferential share was short-term, where the rights of shareholders in the company and over their lands were redeemed at the end of the term. The equity share, on the other hand, endowed shareholders with permanent rights in the company and over their lands. Later, preferential shares were abolished and only equity shares that offer lifelong security to the families retained.

The most important feature of the model is that the land pattas (7/12 registrations) remain in the name of these families, safeguarding their ownership over the land. Owning land is central to the Maratha tradition and this has proved a binding force, surpassing the urge, if any, for immediate gains.

The bye-laws of the company ensure preference to family members of shareholders in employment generated by the company. Shareholders may also invest in the construction of commercial spaces that are rented out to companies. Apart from these provisions, shareholders are encouraged to bid for contracts for development work in the township, such as supplying raw material for RCC construction, labor contracts, vending contracts (shops), landscaping, beautification, and security and maintenance contracts. ? In a nutshell, these farmers not only get a fair price for their lands at the current rate, but also get dividends on the company shares they hold, lease/rent amount from tenants, employment in the company, contractual work in the city, and plush homes with amenities Magarpatta City.

Contracts are awarded based on an assessment of the bidders past experience, current potential and, of course, the proposed plan and costs. The board of directors reserve rights to withdraw contracts in case the quality of goods and services is not of the desired quality.

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Integrated Township Planning2011Around 300 contracts have been awarded for various kinds of work in the township, where preference has been given to the shareholders. On average, each shareholder holds two contracts. ? Besides, over 10,000 workers are engaged in daily wage jobs in the township, apart from the 65,000 jobs created in the companies operating from here

Of the total residential capacity of 6,000 dwellings, 2,500 spaces are currently occupied. A majority of the 123 families have bought apartments or bungalows for the specific purpose of renting them out to the IT firms that have set up shop here.

Part 3-Conclusions&Analysis

12) Comprehensive analysis

12.1) Need of Integrated Townships

• The residential real estate has witnessed explosive growth and supply during the past decade, primarily fuelled by the growing demand in key metros (Mumbai, New Delhi, Chennai, Bangalore, Pune and to some extent Kolkata) and tier I cities (Nasik, Cochin, Baroda, Ahmadabad etc). The limited land availability and the huge unbridgeable gap between demand and supply for individual plots or sites have aided the demand and growth of condominiums, apartment complexes and gated communities. The ever increasing population in the metros has also triggered the demand for both owned and rented accommodations. Besides, higher disposable income, improving lifestyle, increasing aspiration levels and expanded knowledge on global trends have made the present new-generation property buyers more conscious about the properties they want to invest in.

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• However, weak urban planning across most states, lack of public transport, longer travelling time to workplace and inadequate infrastructure have added woes to the property buyers rather than enabling them for a better living. In most cities, new development areas are not planned properly and therefore; do not act as satellite towns, but merely as suburban residential areas.

• The solution to this complex issue in key metros and tier I cities lies in integrated townships — a concept that has been adopted well and proven in the West and even Far East, for over 3-4 decades, for mitigating mobility issues.

12.2) Current scenario of Integrated Township

• Integrated township projects are slowly picking up as the concept of walking to work is picking up among city dwellers. As a township project integrates residential, commercial and retail properties, this is the next phase of growth in the real estate industry.

• Metro cities already bustling with over-population, the focus of real estate developers and urban planners has now shifted towards developing the satellite towns on the periphery of bigger cities. However the biggest bottleneck in developing demand for new townships in the peripheral regions is the lack of proper connectivity. As the real estate sector is finally coming on the fast track, connectivity remains the major concern.

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• There are also many industrial hubs and small settlements along these corridors. These could be developed into small and medium size satellite townships with the major city acting as a hub. But for this appropriate urban planning is required. An important aspect of urban planning would be a well planned transport system. Mass Rapid Transit systems and metro will perhaps lead to the decongestion of existing towns.

• In the recent past several steps have been taken to introduce well-planned mega infrastructure projects in different parts of the country. Emphasis is being laid for the development of metro networks and high capacity bus systems.

• Looking at the current scenario it is necessary to develop a self-sustaining sub-city that has residential, commercial and institutional functions.

• With growing urbanization it has now been established that townships are the most suitable residential solution. The government is now encouraging the development of such townships to reduce pressure on urban areas and to improve infrastructure. Integrated township projects also offer real estate developers an opportunity to cash in on the revival in demand for residential and commercial space. These projects are also part of an effort by these companies to reduce risk in their business model.

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12.3) Integrated township Development Trend analysis

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• Townships development is a trend that is catching the new face of Indian real estate like .A trend that has played an essential role in opening the floodgates for the development of integrated townships across the country that offers their residents the promise of a quality lifestyle tailored to suit every budget.

Township development in India has emerged into a growing trend in people aspiring for more homes in townships especially among the metro cities. This has bought in the FDI’s also into the race with more and more foreign industries investing in such projects. India is proposing to set up separate investment regions complete with integrated townships for the planned growth of the knowledge industry because the booming IT sector in major cities is straining current infrastructure and adding to inflationary pressure.

International real estate developers are here in India developing integrated townships similar to those in their own homeland. But they are very few as of now. Foreign direct investment in township development in Ahmedabad, township development in Hyderabad, township development in Chennai, township development in Bangalore, township development in Pune, township development in Delhi, is showing a rising trend, their numbers are only handful.

• With current market trends indicating a distinct customer preference for affordable homes that also fulfill their aspirations for a better lifestyle, integrated township projects offer the perfect solution to both the customer’s requirement as well as the builder’s need for assured demand.

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http://www.pacificacompanies.co.in/township_projects.html


• The perception of township has recognized its existence in the trend for staying with growing demand for luxury apartments in integrated townships. The shifting necessities and standard of living of India’s residential property buyers who have much more than just a simple home on their thoughts, when they decide to buy that dream house.

After observing the trend we can come to a conclusion that townships have become the most required and desired place now days even though they cost much higher than individual buildings. Complexes built in large area of lands with all facilities including schools, hospitals, shopping malls, gymnasium, health spa provide the unique living experience that people demand these days.

Townships are the next big thing in the Indian real estate development industry; it seems, with a quiet growth in the number of township development projects that merge in a lot of things to make grand realty projects successful and sustainable. As land prices peak in key cities and basic infrastructure lagging to balance with increasing populace, real estate property developers are building cities away from the city to facilitate better quality lifestyles.

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http://www.pacificacompanies.co.in/township_projects.html



Integrated Township Planning201112.4) Impact of Green channel procedures on Township

• The Government recognizes that normal procedures for various statutory clearances are time consuming and constitute a substantial cost overhead for Developers. Under the Township Policy, the Government will establish a Green Channel for ensuring fast clearances. At present the following initiatives are proposed in the Market Based Supervision/Verification Government will establish a market friendly and market based system for operational zing the procedures under this policy including scrutiny and approval of DPRs as well as monitoring and supervision during implementation and operation of the Township. For this purpose, third party verification/ supervision by competent professional agencies will be the principal method. Single point nodal agency for ‘Environmental Clearance’ Government will facilitate statutory environmental clearances through a single point nodal agency, to be notified separately Implement town planning norms.

• A separate and specific set of town planning norms will be issued as part of this Township Policy. Conformity to these norms will have to be established by the Developer in the Detailed Project Report to be submitted for approval. Once the DPR is approved, there will be no separate procedure for development permissions. In the case of Townships within the jurisdiction of sanctioned Development Plans of cities, the norms prescribed by the respective Development Plans will apply.

• All these steps taken will lead to faster completion of projects and will increase the efficiency of work. The system established wherein there will be no separate procedure for development permissions will help the developer by reducing the number of procedures.

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12.5) Issues /Changes Required in Township Development

• The issue with township is that unless and until infrastructure is developed buyers are not going to come these townships .For this private developer will have to develop its own infrastructure.

• I feel that it is necessary to have a regulator for the real estate sector, so as to have control over the fluctuation of prices and reduce exploitation of developers. The regulator is required to develop laws related to re-development, land acquisition, price determination and many other issues.

• There are changes required in the laws related to development provisions. There should be special provisions for SEZs, predetermined processes to get plans sectioned and clear acts and by-laws to provide a boost to the real estate sector. There should be national mapping of the land records.

• The people who are approving are not town planners; they are the junior engineers or the assistant engineers who have no idea about the planned these things have not changed. There should be a single window clearance for land, transportation, police, municipality and other departments.

• I fell that townships should be generally be located on less agriculturally productive land and should be on a reasonable distance from existing medium and large towns. Also it is important to develop mass rapid transport corridors between the existing and the new townships so that relationship between industry and commerce develops. Affordable housing has been a concern for both state and private sector

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• Availability of adequate funds for real estate projects is crucial for development. I feel that financing options are not sufficient when it comes to large scale projects. Too much of funds coming in without considering the rigidity of supply may lead to inflation in the real estate prices. Thus a bridge between demand and supply is needed to ensure affordable housing.

• Looking at the current scenario I feel there is need to develop affordable housing which will be the future of this industry and this can be done collective efforts of public-private partnership which can fulfill the growing demand of commercial and residential space for the future India.

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Integrated Township Planning201112.6) Government policies and its implications

• The government plays a very important role in the development of integrated townships.

• Government has decided to extend the External Commercial Borrowings (ECB) facility for integrated townships, as per certain news reports the ECB norms for integrated township has been granted by the government to promote development of integrated townships which has lead to a boost in financing of such projects.

• The government’s policy that allows foreign direct investment (FDI) in township development in Chennai, township development in Bangalore, township development in Pune, township development in Delhi has induced all major property developers to invest in such ventures leading to an up rise in development of such large scale projects in different major cities.

• As we know that land procurement and inordinate delays in securing the required multiple clearances still pose a major hurdle in the development of such projects, government initiatives like the opening up of FDI and ECB windows for local developers are expected to provide a much-needed boost for township development projects.

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• In context where the rupee-dollar parity is favorable, the government’s decision to open up external commercial borrowings for integrated township developers will counter some of the ill effects of the credit crunch and facilitate access to funds for the housing sector in generalThe move to relax ECB norms for integrated townships, in principal, will help in improving sentiments, accessing cheaper funding for township projects, easing the liquidity scenario to some extent and assist in the decongestion of cities because township development requires substantial land which is available in the periphery only.

12.7) FDI impact on development

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• Changes in the FDI policy for township development have already attracted foreign players to invest in public-private partnerships with state governments and joint ventures with domestic developers

• Allowing FDI in the real estate sector will result in the following advantages:(i) It will provide the much-needed investment for the funds-starved sector;(ii) It will bring in professional players equipped with expertise in real estate development;(iii) The introduction of new technology and quality real estate assets will have a demonstration effect on the local developers;(iv) It will lower real estate costs in the long run;(v) It will generate employment and revenue; and(vi) It will improve the quality of related infrastructure.

• I feel that along with the benefits FDI inflows can lead to distribution of all the profits outside the country. To guard against this, a minimum lock-in period of three years must be fixed on investments and care should be taken to ensure that no long-term investment is funded by short-term capital.

• Looking at the policies for FDI laid down by the government I feel that FDI inflows are expected to rise in the coming future in development of integrated townships and the real estate sector as a whole. But there are also certain barriers for entry for FDI such land acquisition Legal problems, small individual land holdings, untraceable records and unavailability of organized finance.

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Integrated Township Planning201112.8) Major conclusions-Environmental

Major Finding from the Environmental clearance norms in development of projects are as follows

• Environmental Clearance not required for less than 20000 sq. m. of built up area

• All Environmental Clearances for construction projects from SEAC (State level)

• Category B1- (Townships and Area development – Item 8b) will require EIA study. All other projects will require only Form 1 and Form 1A.

• Public hearing not required for any construction project (Item 8)

• Form 1A is a detailed questionnaire, almost a mini-EIA based on secondary environmental data along with a detailed Environment Management plan and environment monitoring plan and also a disaster management plan

• May not circumvent the need for professional and expert guidance in filling up the application.

The environmental clearance form is not complicated and is easy to understand .As there is only 1 form it is not mundane time consuming.

These regulations help protect the environmental conditions of the surroundings along with the development of such projects.

Nowadays environment has been a major concern in development of such projects, hence I feel it is necessary to understand clearly and abide by the clearance norms because many projects have been stopped due to lack of fulfillment of environmental conditions.

12.9) Infrastructural Development Need88


Due to rapid population growth and urbanization due to the migration of people from different parts of the country, there are gaps in the demand for supply of housing, services and infrastructural facilities such as water, electricity, drainage, road and other utilities.

Development plots are very expensive and not available at affordable prices and people are forced to buy agricultural land cheaply without the provision of basic infrastructure and services (road, water, drainage etc). And they start demand for the provision of infrastructure after the construction of houses.

One of the examples of unplanned settlement is the growth of squatter settlements and slums in the urban area and substandard housing in the fringe of cities. Lack of natural light and ventilation, inadequate water supply and sanitation, improper access and dilapidated road condition are indicators of substandard housing.

Large area of precious urban land is being converted in to roads and parking areas. Conflicting land uses, unplanned and haphazard construction, inadequate road network and inefficient transport management are creating traffic congestion. Due to the lack of proper road network connecting city center and semi-urban areas, public transport cannot operate effectively in semi urban settlement.

This has lead to the emergence of Integrated Township which is a solution to these problems and helps reduce the pressure on urban areas.

Bibliography

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Web sites

www.regionalplan- mmrda .org

www.dipp.nic.in

www.RealEstateIndiaOnline.com.

www.infochangeindia.org

www.economictimes .com

www.indianrealestateboard.com

www.gicl.in

Documents

Environmental Clearance for Construction Projects

Maharashtra Regional Town Planning Act 1966

FDI& Real Estate Sector In India

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http://www.indianrealestateboard.com/

http://www.economictimes/

http://www.infochangeindia.org/

http://www.RealEstateIndiaOnline.com/

http://www.dipp.nic.in/

http://www.regionalplan-mmrda.org/


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