With the repeal of the Urban Land Ceiling and Regulation Act (ULCRA) one myth has been buried and another is rapidly taking its place. In 1976, when Indira Gandhi rushed ULCRA through Parliament, it was said speculation and profiteering would be drastically curtailed and public ownership of urban land would serve the common good. Twenty years later in 1997 when the Gujral cabinet wanted to repeal ULCRA, it was found that state governments had taken possession of 16,647 hectares, a pathetic seven per cent of vacant urban land in excess of ceilings all over the country. ULCRA is an abysmal failure, no doubt about that at all. It was defeated by a combination of bad draftsmanship, corruption and lobbying by builder-developers who obtained an array of exemptions in the application of the law. So the residents of 64 cities where the law was in force saw next to nothing of the recreation spaces, housing or other major civic improvements they were promised. None of them, and especially not the homeless in whose namethe whole shabby business was conducted, will mourn the end of ULCRA.A new round of hopes are being raised by the death of ULCRA by ordinance. It is expected to depress land prices all over the country and spur new investment and growth in industry, transport, the infrastructure and housing in all categories. Hold your horses. Certainly the lifting of restrictions will free private landowners to put their land on the market for sale and development. The immediate casualty will be official corruption. All this is good. But before a whole new era can begin a few more steps have to be taken. Other states must follow Punjab, Haryana and Delhi and scrap their urban land ceiling laws. Until recently, Maharashtra and Tamil Nadu, for example, appeared satisfied with the functioning of their own laws. And, in the context of a long spell of falling real estate prices, it has to be assumed the same lobbies that succeeded in diluting state ceiling laws will exert pressure against repealing them. However, states whichdelay scrapping their ceilings will be faced with the prospect of business and industry moving to greener, freer pastures. Public housing projects could also suffer. Going by past practice, the temptation then will be to give case-by-case exemptions from land ceilings. State governments should avoid this halfway house at all costs. It is irrational and only provides more opportunities for corruption while slowing down urban development.Even if state governments can be persuaded to avoid regressive land use policies, large amounts of surplus land may not necessarily be available for new development immediately. If what is true of Greater Mumbai prevails elsewhere, the bulk will be in designated no-development zones. Thus, the death of ULCRA must be followed quickly in every state and every city by the adoption of revised development plans before the expected country-wide fall in land prices materialises. Large private holdings, a substantial part of total surplus land, are not likely to be put on the marketwhen prices are low. So, fiscal measures will be needed to spur development of vacant land.
