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NEW DELHI: The Union Cabinet on Wednesday approved a bill which provides for a legal framework to grant ownership rights to the people living in unauthorised colonies in the city, a move that will benefit 40 to 50 lakh people.

The decision is politically significant as it will benefit millions of poor migrants who hold key to the assembly election due early next year and had backed the AAP in large numbers in the 2015 Delhi polls. The bill to regulate unauthorised colonies in the National Capital Territory is likely to be introduced in Parliament on Thursday, sources in the government said.

Finance Minister Nirmala Sitharaman said the Cabinet approved the bill to implement the proposal cleared recently. She described it as a legal framework which includes various elements, including amendment to the Income Tax Act.

On October 23, the Cabinet had approved the proposal which is applicable to 1,797 identified unauthorised colonies spread over 175 square-km of the national capital inhabited by people from lower income groups. Recently, Prime Minister Narendra Modi had told some representatives of welfare associations of these colonies that a bill would be brought to implement the decision.

The AAP government in Delhi had accused the Centre of not bringing the bill as promised.

According to the existing regulations of 2008, the process of regularisation was to be coordinated and supervised by the Delhi government. “Delineation of boundary of unauthorised colonies is the starting point of the process as per regulations. However, the Delhi government could not delineate the boundaries of these colonies even after 11 years of issuance of the regulations and has sought more time up to 2021 to complete this exercise,” an official statement had said on October 23.

The move does not apply to 69 affluent colonies identified by the Delhi Development Authority (DDA), including Sainik Farms, Mahendru Enclave and Anantram Dairy, Union minister Hardeep Puri had said when the Cabinet had approved the proposal last month.

The proposed bill is aimed at recognising general power of attorney (GPA), will, agreement to sell, purchase and possession documents, which will be a one-time relaxation for this purpose for the residents of these colonies. The bill will also provide for registration charge and stamp duty on last transaction and also address the issue of income tax liability on account of less than circle rate charges.

In July, the Delhi government had proposed a set of parameters to regularise the 1,797 colonies, which include charging 1 per cent cost of circle rate of land for up to 200 square metre plot from occupants besides a nominal penalty.

The rights will be conferred on payment of nominal charge based on carpet area/plot size. For colonies on government land, the charge will be 0.5 per cent (for less than 100 sq m), 1 per cent (for 100-250 sqm) and 2.5 per cent (for greater than 250 sqm), of the circle rate of highest category of locality of the residential area surrounding the unauthorised colony.

For colonies on private land, it will be half of the charge on government land. PTI