Governing urban land : the political economy of the ULCRA in Mumbai

Abstract

In this thesis, I look at the political economy of the Urban Land (Ceiling and Regulation) Act (ULCRA) in Mumbai, India. Enacted in 1976, the stated aim of this legislation was to prevent speculation in the urban land market, and to make land available for affordable housing. The legislation imposed a "ceiling" on the amount of vacant land individuals could hold in urban areas. During the years it was in effect (1976-2007), almost all excess vacant land in the Mumbai agglomeration was exempted under the Act. Current literature posits that ULCRA failed to achieve its objective because politicians and bureaucrats were self-motivated rent-seekers, who were not interested in socially just redistribution of urban land. In 2007, using a conditional intergovernmental transfer scheme, the Central Government forced the State Government of Maharashtra to repeal ULCRA. I argue that current literature offers at best broad generalizations of the reasons ULCRA failed to achieve its objective in Mumbai. Through an in-depth analysis of the working of ULCRA in Mumbai, I show that it was never implemented as originally intended. Also, I show that ULCRA was frustrated by a number of deficiencies in institutions such as the lack of political will to take proactive action, capacity and cohesiveness in the bureaucracy, and amendments in other enabling statutes, to name a few. Seen from this perspective, it is incorrect to assume, as the current national urban development policy does, that a turn to market-led development in urban land markets will yield better results in delivering affording housing for the urban poor. Further, by analyzing the political economy of ULCRA's repeal, I show that under certain conditions, Central Government intervention may be a necessary step to protect interests of the poor. However, Central Government intervention needs to be designed keeping in mind the "why" and the "how", to ensure that the intervention's does not become dead letter, or redundant. I conclude with the dilemmas development planners are likely to face when designing laws and regulations in developing countries that feature a thinly institutionalized state, and a weak democracy.