M'rashtra gets warning from Centre on repeal of ULCA

Reform or lose out on the Central funding under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM).

This was the warning given to the Maharashtra government by the Centre not pleased with the state dilly-dallying approach on repealing of Urban Land Ceiling Act (ULCA).

Speaking to Business Standard on the sidelines of a function organised to provide Rs 400 crore central assistance to Mumbai's storm water drainage scheme (Brimstowad) a senior minister from Union cabinet said, "It has been made clear to the state government that if you don't repeal the act in the winter session of state legislature, then this Rs 400 crore cheque might be the last cheque for a long time to come."

The JNNURM puts conditions like repealing of ULCA, abolition of The rent control act, shifting to capital-based tax system for property tax instead of present rateable value system for securing central assistance for urban infrastructure projects.

The state government introduced the repeal of ULCA bill in the budget session of the state legislature but on the last day, which ensured that it could be taken up for discussion only in the next session. Then in monsoon session of the state assembly, once again the bill was held up for discussion during only in last week of the session.

But accepting Shiv Sena's demand to postpone the discussion on bill till winter session, which opposed to the repeal of the ULCA, without any resistance, state government once again shown that, it was not keen on the repeal of the act.

In fact, immediately after the session, BJP which is supporting the repeal of the act called it match-fixing between Sena and government.

If the state government fails to get the state legislature's nod in the winter session then the future of urban infrastructure projects worth around Rs 30,000 crore will be in a limbo which are presently lying with the central government for their approval. This include project worth around Rs 12,000 crore from Mumbai.

The Centre has so far approved urban infrastructure projects worth around Rs 8,300 crore from the state and released Rs 1,182 crore as the central share in the project.

However, if the Maharashtra legislature fails to clear the bill one more time then, Maharashtra may have to wait for long time before central releases second installment of its share in the approved project.

Under JNURM, the 35 per cent of the project cots of the urban infrastructure project is taken care by central government, 15 per cent is contribution of the state government and rest is raised by the local municipal organisation.

However a senior government official said, "The Memorandum of Understanding, which we have signed with central government for getting funds under JNURM, gives us deadline of March 31, next year and we are confident that, we will abide by the deadline. The ULCA is a politically-sensitive issue and the government is trying to build a consensus on the issue."