In November 2011,
Aparna Goel started getting calls from a soft-spoken woman offering to sell a
flat in a prime locality in Noida, just outside Delhi. The woman said she
worked for a major construction company based in Noida.
Goel, a divorcee who lived alone in Uttar Pradesh’s Muzaffarnagar district, wanted to buy property in Noida and move to the city in search of better opportunities as a school teacher. But the amount quoted to her by the woman—Rs. 55 lakh for a two bedroom-hall-kitchen (BHK) flat—was way beyond what Aparna could afford.
She told the caller as much. But the woman persisted. “They said they could arrange for me to pay a minimum amount up front and then pay a fixed sum every six months in installments ranging from 2-3 lakhs.”
Goel became curious and was eventually interested enough to make a trip to Noida for a look at the model of the flat and decide on the details of payment. She was picked up from New Delhi Railway Station and driven to the office of the consultancy firm in Noida’s Sector-16, from where endless calls came. She was treated to a fabulous lunch and then taken to Supertech’s Cape Town project in Noida. She liked the model flat shown to her.
The vendors told her to make the first payment of Rs. 3 lakh immediately so that the flat could be booked in her name. “They just kept saying that you should make the payment to book the flat first and that formalities could be sorted out later. So I did.”
A month later, Goel received a letter demanding the full Rs. 55 lakh. Shocked, she called the brokerage which had finalised the deal, demanding an explanation.
The reply she got was:
“We are just paid to book flats for Supertech, which we did. Details of your
contractual agreement with Supertech have been couriered to you, and from now
on the deal is between you and the builder”.
The brokerage got Rs. 30,000 for duping Goel into paying Rs. 3 lakh for a deal
that was never going to get to fruition. “That girl told me as much to my face
Convinced she could persuade the officials at Supertech’s office in Sector-58 in Noida that she had been cheated into investing hard-earned money in their project, Goel approached them in January 2012. They told her that 15 per cent of the amount she had paid—Rs. 45,000—would be deducted. She would only be entitled to the balance.
“What was alarming”, she says, “was that I was not the only one.” Over the next 10 months, Goel met at least 200 people visiting the office for refunds. “It was as if nobody wanted to buy. Everybody who had invested had either been duped or was not interested anymore.”
She is not off the mark. The real estate sector in India, especially in the Noida-Greater Noida-Gurgaon region, the National Capital Region (NCR), has seen a boom that seems to have misled experts as well as buyers into believing that the time to invest in property is now. In the Noida-Greater Noida area in Uttar Pradesh it started in 2011 after the landmark judgment of the Supreme Court.
The New Okhla
Industrial Development Area (Noida) was marked for special development in 1974
as Delhi needed industries outside the broader residential space of the
national capital. To facilitate smooth land acquisition and its development,
the UP government in 1976 passed the Uttar Pradesh Industrial Area Development
Act. It is an addition to the Land Acquisition Act, 1894, of the Central
Government when it comes to acquiring farmers’ land in the state. Haryana too
has implemented some aspects borrowed from the same Act along with the 1894
Act, without actually legislating it officially.
After the Noida Authority issued the notification in 1974, many villages came under its jurisdiction. Among them was Shahberi, a fateful addition. Back then, land reform had barely begun and farmers struggled to settle disputes among themselves and with the government to mark the land that would eventually belong to them.
By 1976, most land disputes had been settled but the foundation stone for newer, more violent ones had been laid in the form of the new Act.
Noida’s freely available land had given the town a crucial place in the Delhi-NCR region. It paved the way for residential projects by the dozen. Land acquired from farmers was sold to construction companies at rates unimaginable in the present scenario.
Within 25 years, Noida’s freely available land, much cheaper than Delhi, had given the town a crucial place in the Delhi-NCR region. It paved the way for residential projects by the dozen, aimed at the rapidly growing industrial worker population and high-end clients wanting to buy land for bigger houses. Land acquired from farmers was sold to construction companies at rates unimaginable in the present scenario.
By the early 2000s, land in Noida had been mostly acquired and sold off, or rejected by builders for being too far from Delhi. Noida was getting too populated for comfort and so the UP government decided to develop Greater Noida as the new industrial hub.
Industries and companies from every field invested in the new sub-city and gobbled up land for various factories, plants, offices and various other projects. But the motto of the government had changed, as has happened with most expanding cities over the last 15 years. The target group for the Greater Noida Authority became people who would invest in big houses, expansive villas, penthouses, and various other facilities of “leisure”, as their website states. The industrial worker and the worker class, for whom the plans had originally been finalised, were conveniently forgotten.
On March 13, 2009,
the Greater Noida authority, formed on the lines of the Noida Authority under
the UP Industrial Areas Act, declared in a gazette notification that land in
Shahberi village was to be acquired for projects under the same Act and the
Land Acquisition Act, 1894. Without any notice to the farmers, the authority
declared that the urgency clause of the 1894 Act was going to be implemented.
Under Section 17 of the acquisition law urgency can be cited only if there is a greater public interest involved and that land cannot be acquired according to the standard procedure of the law.
“There was no need for a railway station, military cantonment, government employees’ housing scheme, etc, here at all,” says Mubassir Hussain, whose land had also been acquired by the Greater Noida authority.
The gazette also announced that the owners would not be entitled to object to the acquisition of their land, guaranteed under Section 5(a) of the 1894 Act, since the urgency clause had been invoked. The reasons for invoking it and denial of the right to object were not given.
On the pretext of encouraging urban farming, land parcels were sold to buyers as farm houses. They were never used for the purposes cited when the land was acquired. What was worse, farmers did not get many other facilities that the land acquisition law guarantees since their land was being acquired for agricultural purposes.
Shahberi was part of Noida till the gazette declared that it had been given away to the Greater Noida authority. But its land, unlike many other villages in the region, had been well-cultivated, irrigated and fertile over the past century.
“We have records to show that even in 1952 two crops were cultivated here every year,” says Hussain. Under the 1894 Act, no fertile land can be acquired for industrial purposes if is a multiple-crop land. By the time of the gazette farmers grew three crops a year in Shahberi as well as in some adjacent villages.
“Thanks to comparatively better proximity to the Hindon River we have been better off than other villages even though this region falls in the dry and saline-water area beyond the Yamuna and the Hindon.”
But Shahberi was not spared. The Greater Noida Authority consulted maps dating back to 1983 which showed most parts of the village as unpopulated. The recently built Modern School, where at least 500 children study every year, was also declared unpopulated.
The school administration, which runs many other educational institutes by the same name, bought the land from the villagers at Rs. 2,000 per gaj (roughly equaling 1.3 square metres) many years back. After the gazette declaration, it was not only going to lose its land, it was also set to make a huge loss of Rs. 1,300 per gaj as the government only came up with a compensation of Rs. 711 per gaj—Rs. 850 per square metre. That figure too had been arrived upon after protests by farmers across western UP against the Rs. 550 per square metre compensation decided upon earlier.
As per the gazette notification, the land was to be acquired for industrial use. However, the authority planned to sell the land to developers and construction companies. The area was named Noida Extension to make investors and buyers feel it was just an extension of the Noida success story. The fact that it lies barely 5 km beyond the old boundary of Noida also helped. Later, when buyers, investors and real estate consultants showed more interest in Greater Noida the area was conveniently given its original name—Greater Noida West.
After the rates of land in a particular area are decided authority officials and the political party in power fix their commission on the land that will be sold to the builders, an informal but unforgiving levy charged on a per square metre basis for the land in question.
Most farmers from the
region opposed the plans to acquire their land. But Shahberi stood out as a
village from where hardly anyone accepted government compensation. Instead,
they approached the courts and challenged the land acquisition.
The case eventually triggered major unrest across north India as farmers chose to keep their land and livelihood and resisted land acquisition for industrial or residential projects. Real estate and property prices in Noida-Greater Noida and, eventually, in most of the NCR, took a hit as a result.
belongs to the family that held the Zamindari rights across three villages in
the region—Shahberi, Chak Shahberi (which lies along the Hindon River, hence
the name) and Haibatpur. After the land reforms of the late 1960s, however, the
extended family was left with barely 1,100 bigha (1 bigha = 884 sq mt) across
the three villages. They stuck to farming and cultivated wheat, sugarcane and
other crops. The returns were good and the family prospered.
The land in Shahberi eventually went to Mujahid Hussain and his brother Sharafat Ali, who together approached the courts against Greater Noida authority’s decision to acquire their land and sell it to real estate developers. They were helped by others like Dharampal Arya and Rajpal Arya, who too had no intention of letting their farm land go. On March 28, 2010, they filed a case against the Greater Noida authority and demanded that their land be returned.
“Thankfully, only a few families actually collected the compensation,” says Hussain. “The authority could not touch most of the land in the village after the Allahabad High Court gave a stay order on acquisition.”
But the construction went on. Seven builders—Amrapali, Supertech, Mahagun, Panchsheel, AMS, Shreeji and Gulshan Homes—bought land across villages in the area and much of it fell in Shahberi village.
Even after the stay from the court, the Greater Noida authority, under pressure from builders, continued to develop Shahberi. Roads 60-90 metres wide were constructed. Even a 50-year-old burial ground was not spared as the expansion drive picked up pace.
Builders and touts push up prices and decide on a base price to be quoted to the end buyer, beyond which it is up to the builder to decide. In Gurgaon, for example, builders who were initially selling property at Rs. 6,600 per square foot have, over time, increased the price to Rs. 8200-Rs. 8300.
But the Hussain and Arya families convinced villagers to fight the authority for a better compensation or simply to get their land back so that they could cultivate it as before.
“We had been planning a crop pattern for urban buyers—organic vegetables, fruits, etc, were on the list. Why should the government stop our plans when our land is fertile and their own Master Plan for the expansion of the urban space says that such initiatives should be encouraged?” asks Sharafat Ali.
Master Plan 2001 of the Greater Noida authority said land acquired in Shahberi would be used for industrial purposes. Some other clauses of the 1894 Act were also used to acquire land. In almost every case, the same clauses are used to acquire farm land before the builders get patches in a planned manner for much higher rates than the purchase price. Sections 4 and 6 of the Act, which pertain to acquisition of farm land for public purposes, were invoked in this case, as they are across the country.
Sanjeev Kumar, who
works with the real estate consultant Zenith Capital Group in Gurgaon, says,
“These sections are so misleading that governments invoke them for practically
any purpose. Even real estate consultants work with officials to help them come
up with one or the other excuse to acquire prime farm land, as was the case in
many areas outside Gurgaon (where farm land was acquired citing reasons that
urban farming would be encouraged)”.
On the pretext of encouraging urban farming, land parcels were sold to buyers as farm houses. They were never used for the purposes cited when the land was acquired. What was worse, farmers did not get many other facilities that the land acquisition law guarantees since their land was being acquired for agricultural purposes and they were guaranteed employment in the same sector and in the same region.
“Nobody ever got a job at any of the farm houses since hardly anybody wanted to get into the urban farming business. Those who actually did never employed any of the farmers from the region since these people did not specialise in the kind of farming they intended to do,” says Colonel (retired) Devinder Sehrawat, secretary of the Delhi Grameen Samaj (Delhi Rural Society), who has worked with farmers across north India.
But Shahberi was different. Prime farm land was acquired citing records from 1983 when only two crops were grown, and which showed that most of the land actually fell under the non-agricultural category. Then as the real estate boom hit, the authority, and the UP government, decided to make Greater Noida a residential hub.
Having already declared that land in Shahberi and surrounding villages was mostly barren and so acquired for industrial purposes, the authority came up with a new tool to dupe farmers. The village’s land use pattern, converted to “industrial use” by 2001, was again turned to “agricultural land” overnight.
The authority then reacquired the land saying it would sell it to builders for residential projects and that farmers would be entitled to various facilities apart from compensation, like free water, 6 per cent of the developed land based on their original ownership in the area, jobs, healthcare, and other things.
“But not one facility ever reached the villagers. Even today farmers across Noida are fighting for rights as per promises made by the Noida Authority when their land was being acquired but not one case has been resolved or looks like it is going to be in the near future,” says Mujahid Hussain.
By the time the
Allahabad high court passed the stay order, builders say they were suffering
losses on their investment. The case got loads of sponsored and unsponsored
print and air space and the victims were vilified.
It was claimed that farmers had resorted to hooliganism to push their case and that builders and buyers of property to be developed in the area would suffer. In one case, a news channel declared that farmers had obtained an “illegal stay order” from the HC and that they should be punished for not helping the authority and the builders develop world-class housing projects.
The court eventually ordered that compensation for farmers be raised to ₹1,400 per sq mt instead of the ₹850 the authority had decided earlier, and that the quantum of compensatory land be raised to 10 per cent of the original land ownership. The authority was also ordered to deliver on various other promises it made before acquiring the land.
Many other villages too filed cases against the authority. But the farmers from Shahberi were not satisfied. They wanted their land back.
“It had to be getting our land back or we would just have had to settle for what the authority was ready to give us in compensation. We decided to approach the SC thinking whatever comes out would not be worse than it already was,” says Mujahid Hussain.
During the agitations many farmer leaders also supported the Shahberi farmers. Dr Rupesh Verma, a social activist from Sadopur village in Greater Noida, sat in dharna along with the farmers and faced lathicharges. To quell the agitation police also arrested Mujahid Hussain and his brother Sharafat Ali on charges of “inciting violence”.
After they spent weeks in jail, Verma spread the rumour among political circles and police officials that Samajwadi Party chief and present UP chief minister Akhilesh Yadav was planning to visit Dasna Jail in Ghaziabad, where the brothers had been lodged, to demand their release. Fearing a major backlash, police released them that very morning and has not troubled the family since.
As the Shahberi case
was heating up in the Allahabad High Court, the buyers too formed various
unions and groups and approached the SC for appropriate relief and refund of
the money invested. The most active of the groups are the Noida Extension Flat
Buyers Welfare Association (NEFBWA) and the Noida Extension Home Buyers Welfare
Sushil Sarin, who bought a flat in the Ecovillage-II project of construction major Supertech, says he was told by the builder initially that if the project suffered, he would too.
“The dispute was between the authority and the builder. What the farmers were doing or demanding was up to them to handle. It was unfair if a buyer suffered loss,” he says.
Sarin joined NEFBWA and the members together tried to get to the root of the problem. Significantly, they earned the support of the farmers and supported their cause in turn, dispelling the media myth that farmers’ protest was the root cause of the problem.
“It eventually became
clear to us (at NEFBWA) that the authority and the state government were
responsible for the situation while builders who were going to make losses
would eventually recover the money from the buyer.”
In a landmark judgment, the SC ruled in May 2011 that Shahberi farmers get back their land in the same condition as when it was acquired. This sparked fears among buyers and real estate developers that other projects could also be scrapped and the land would be returned to the farmers.
Many had approached the courts and many more were going to approach the courts after the Shahberi judgment. So, responding to a petition of buyers’ associations the SC ruled that they be refunded and that the builders and the authority together make sure investors’ interests were safeguarded.
Refunds, however, were either delayed or the investors simply offered homes of the same size, in some cases bigger too. In most cases buyers chose to go for newer homes being offered since real estate prices had been pushed up by builders after they lost their battle in the courts.
“In a way protests by farmers demanding their rights always ends up benefiting builders since they exploit public sentiment and plant stories in the media saying their investments were going waste or that their money was stuck due to the farmer-government dispute,” says Devinder Sehrawat.
The real estate
sector, almost without exception, runs afoul of the law and flouts regulations.
Kishore Kumar (name changed) is the owner of a major real estate company which
is among the seven who invested in Shahberi land. He agreed to talk about it in
detail on condition of anonymity.
During meetings with senior officials in the state or in fast developing cities, developers and their consultants, “basically just high-profile touts”, mention land they see fit for buying and “developing” in the future.
“The Greater Noida and now the Greater Noida phase-II concepts were born in cocktail parties held in Lucknow in the late 1990s,” he says. “The technicalities were handled by real estate touts for the developers, and officials also were hand-in-glove.”
Touts approach every construction major in the country and take quotes on the price they will pay and the amount of land they want to buy.
“Real estate consultants handling different clients are approached one by one and everyone is taken on board. Most real estate firms actually report to the select few hundred touts across the country, who wield considerable influence in political circles,” Kishore says.
The quotes determine the base price at which land will be sold and the touts assure the companies that demand will grow and that they will make sure a fixed number of flats are sold, for which they demand commission from the builder. The woman who talked Aparna Goel into buying the flat worked for one such consultancy.
“She had told me later that she had a salary of around Rs. 50,000 and that her bosses expected her to recover her salary plus commission for at least one more home–which meant she had to make sure three houses were sold every month and people coughed up Rs. 3 lakh. What happens later is not their concern,” Goel recalls.
Such touts also quote high rates for flats and then ask buyers to go for installments; which makes sure that some payment is made right away, ensuring a commission for the company. “It is a regular practice and in many cases if a flat is sold to a buyer for a higher rate, money (cash) is exchanged between the consultant and the builder equally.”
“The consultant’s job is to make sure the real estate sector keeps working by keeping interest in the market alive and also ensuring that buyers dish out good money for the builders. Tu meri kamar khuja main teri khujaun (you scratch my back and I scratch yours).”
A senior official of
the Noida Authority, agreeing to speak on condition of anonymity, describes how
the touts approach officials and politicians. “The local property dealers keep
the contact with clerk-level and some senior officials in the authority or the
departments which deal with house and land allotments. Information on various
projects is shared between various dealers on a commission basis.
“For example, a dealer who runs his business in a particular area is approached for a deal there and so he commands a commission for giving information and facilitating the deal,” he said. These dealers mostly have links with local politicians and in some cases are themselves members of political parties. “These politicians in turn keep the information supply to higher-ups in their respective parties flowing.”
The most important link, however, is the consultant, mostly owned by front companies of politicians or big businessmen who are also into construction. Naming a major consultancy firm in north India, the official described its ownership pattern alleging that the firm is “most probably” run by a major politician from UP. These firms, he said, keep in touch with the various chains of property dealers across the region.
“They designate employees for various localities. For example, for Noida Extension alone there could be 20-50 employees, each keeping in touch with dealers on a daily/weekly/monthly basis depending on the development going on or expected in that particular area.”
These firms, along with local politicians who want “development” in their respective areas to get a share of the pie, together influence the authority’s officials and the politicians to make sure particular areas are marked for special development, coordinating from the ground level to the top of the decision making process—from the local property dealer to the consultants to the politicians.
“It is basically lobbying as in the US, except that it is illegal in India and is done in a very ugly fashion. Sometimes the politicians simply ask us (officials): ‘Naya kya laa rahe hain aap’ (What new project are you bringing to us)? This basically means that the officials have to work overtime to come up with new projects so that the whole chain of consultants, property dealers and the politicians (district-state level) is benefited.”
The official, while not denying that officials too charge huge sums of money from builders and gain from the deals, claimed the money is equally distributed to all the employees and so cannot compare to what the other players get.
After the rates of land in a particular area are decided authority officials and the political party in power fix their commission on the land that will be sold to the builders, an informal but unforgiving levy charged on a per square metre basis for the land in question. Every party has a source or agent in the real estate sector to receive the money from builders. Similarly, the touts take the money for authority officials.
When Greater Noida West/Noida Extension was planned the party in power was the Bahujan Samaj Party (BSP) under Mayawati. The real estate sector is said to have been run by her brother Anand, who also owns and operates a consultancy in Noida.
“In Noida Extension, for example, all builders paid Rs. 5,000 per square metre to Anand while the authority/touts, whatever you may call them, got Rs. 3,000 per square metre,” says Kishore Kumar. In return, the latter make sure that the builder pays the money to the authority much after the project is completed and all his flats/houses are sold.
In Noida Extension, for example, builders were only required to pay 10 per cent of the original immediately and paid the rest in 16 instalments, one every six months, a comfortable eight-year period during which the builder can make huge profits.
The deals worked out
in the NCR by the builder-touts-authority nexus have seen banks get it in the
neck. They go by the government approval for various projects as the base for
sanctioning home loans. While many have seen the number of defaulters increase
due to escalation of prices mid-way through construction, others have suffered
because of the delays in various projects due to protests against them.
As a result many banks have formulated newer norms for processing loans. Surinder Ahlawat, a retired UP Police Inspector, was baffled when HDFC Bank refused to sanction a loan after initially confirming his application. He had made the initial payment to Supertech when he was informed by officials at Supertech and, later, HDFC Bank, that his loan could not be approved. It had made specific enquiries into the construction process through its inspection agents and had refused to sanction the loan for a strange reason—the floor on which Ahlawat had booked his flat had not been approved for sanction.
“At Supertech they
told me that flats on floors with even numbers (2nd, 4th, 6th, etc) had been
approved while the odd ones above 5th had not been approved. Mine was on the
9th floor and had not been approved,” he says.
After running around for almost six months Supertech finally offered him a flat in a separate building in the same project on a floor for which HDFC bank had approved loans.
An officer of the HDFC Bank’s Home Loan department, speaking on condition of anonymity, said the inspection team had visited the construction site regularly to monitor whether the builder was fulfilling the conditions laid down before work began.
“As per the deal with the bank several construction criteria are fixed and the builder promises to fulfil them to make sure customers get loans from the bank. We have to monitor the construction regularly to keep a check on these aspects,” she said. These measures have been made stricter, she said, after many cases of defaulting on the promises by the builders came to light.
“In this case (Ahlawat’s case) we found that to gain one floor in the building, the builder shortened the height of the floors with odd numbers by one foot each. It was supposed to be ten feet but was reduced to nine feet. And so we sent our report to loan department to not sanction loans for the particular floors.”
The bank suffers a bad investment deal if government inspectors reject a construction site, as has happened in Delhi and Haryana. Once rejected, it is between the bank and the builder to sort out the differences whereas the investor is supposed to get back his money from the bank right away. In the case of investors whose flats fell in Shahberi’s area, the banks had to return the money on many occasions even though the case had not been finalised in the courts.
In many cases banks study disputes or possible disputes on particular sites and locations before sanctioning loans. While most banks were sanctioning loans for the Krossings Republic project in Ghaziabad, Bank of Baroda refused a loan to Nitin Bhandari, a clerk with the Delhi Government.
“They told me the area did not have a map approval from the Ghaziabad Development Authority (GDA) and the state government yet and so the Bank would not sanction the loan,” he says.
After procuring the maps, Bhandari found that while construction had begun, GDA was yet to receive final approval for the changes it had proposed to the land use pattern of the area, which is what happened in Shahberi where the authority effected a similar change.
“The lawyer from the Bank of Baroda’s legal cell advised me to desist from investing there since in future there could be a dispute. And I did so,” he says.
At times the
builders suffer losses too, as in Shahberi. After hefty payments to politicians
and authorities, if a project is stalled or shelved it is a considerable
For example, Kishore Kumar explains, going by the land rate in Noida Extension—Rs. 10,625 per square metre—the builder pays Rs. 106.25 per sq mt up front as the first instalment, Rs. 5,000 to the politician, Rs. 3,000 to the authority officials/touts and a separate Rs. 2,200 as mandatory development charge to the authority. So if a builder buys a 1,000 square metre land parcel, he ends up paying Rs. 1.03 crore instead of the Rs. 23.06 lakh that he should actually be paying.
“This obviously results in an escalation of prices. The builder makes as much space as possible in the area that is available to him. He increases the area of the houses so that they sell for high rates and just pushes up for more and more floors.”
If a project is stalled or shelved, the builder suffers losses. During this time the touts and officials suffer the most as they have guaranteed the builders smooth sailing. They then take to the media and police using bribes and every other means to turn public opinion in their favour, as in Shahberi. Even when the decision of the SC in Shahberi came, the media highlighted the “relief to the buyers and builders” rather than calling it a win for the farmers.
But builders and touts have numerous ways to hedge the risk. They push up the prices of properties in a coordinated manner and decide on a base price to be quoted to the end buyer, beyond which it is up to the builder to decide.
“The rates have to be kept up in order to make sure the buyer feels that she is buying property at a prime location. The touts do their work to make sure the projects are well-advertised in advance.” In Shahberi and surrounding villages, the seven builders had quoted a base price of Rs. 3,200 per square foot. Not one building across the colonies was to be less than 10-storey high. This pattern has been followed across the NCR and the country. “If a profit has to be made, rates have to be inflated,” Kumar says.
Money from the initial bookings, when the rates are comparatively low, is used by the builder to wind up pending projects elsewhere. At the same time, touts keep working with the authorities to make sure the areas to be developed receive maximum attention from the municipal corporations and are connected by good roads, bus services, etc.
“Two major things that count while fixing prices are the status of a project and its location,” says Sanjeev Kumar. In Gurgaon, for example, builders who were initially selling property at Rs. 6,600 per square foot have, over time, increased the price to Rs. 8200-Rs. 8300. In relatively newer locations like the Dwarka Expressway construction major DLF is still selling at Rs. 4,200 per square foot.
The problem with
this mode of profit-making, however, is that it cannot be sustained. In most
cases in the upcoming areas, the flats are targeted at the upper middle class
and the upper class. The lower middle class and the lower classes have been
In Greater Noida, for example, 60-70 per cent of the population travels from Delhi or Noida to the city to work and departs by the evening, leaving a ghost town behind. Even those who stay in the city are mostly on rent.
“In Greater Noida people invest money in property. Very few actually buy the property to live themselves. Barely 10 per cent of buyers stay in the houses here,” says Prakash Tyagi, a real estate agent in Greater Noida. The people who rent houses are usually families or students and bachelor boys/girls who work in the city.
The relatively bigger houses stay vacant; only in rare cases are they rented. But since touts keep the rates up, their prices keep appreciating until the buyer decides to sell and invest the profit in another project a little farther from the city where property prices are still low.
“There are so many houses in the city now that the rates at which houses are being rented are also going down now. The supply has outstripped demand,” says Tyagi.
The economic slowdown has hit builders hard as the upper class and the upper middle class suddenly stopped investing, those who had made the investments are reluctant to encash it in the present scenario. If one compares the present scenario to that in the United States of America, there would be a striking similarity in the way the US market fared before the depression.
In most cases, people stopped investing in the market after making satisfactory profits. In India too people have slowly stopped investing beyond what is actually the practical boundary of a city. Yet the scenario is different from the US because of a huge population and the stable increase in demand that makes sure supply is sufficiently met, resulting in profits for everyone but the buyer.
Kamini Singh, an assistant professor at the Apeejay School of Architecture in Greater Noida, says that the situation is unlikely to change immediately but that it will eventually change for the worse. Builders will have to lower prices as buyers will either have been duped badly over and over again or they will simply stop investing in areas beyond a certain city limit.
“During the last half century critical analysis of master plans has focused repeatedly on the mechanical nature ‘will work’ or ‘will not work’ and on the devastation they can wreak because they often encourage rigid and sterile development with limited consideration to majority of the population.
“A different approach of bottom-up planning and design is needed to ensure public participation in decision making, which means development should reflect the needs of people from all age, gender and class.
“Most of the projects in Delhi-NCR target the luxury class. The low income and EWS housing projects have become a mere formality. There is limited correlation between actual demand and that is triggered by the fact that the Noida-Greater Noida region is the second largest destination in the country in terms of rupee value of residential real estate assets,” she says.
“The need is to learn from Kerala and follow a bottom-up approach for development making properties more accessible to the masses.”
This will, she says, ensure that farmers, lower income groups and the lower middle class too are a major part of the rapid expansion in the urban space. The demand will then sustain itself and the NCR region, in particular, will see stable growth. The economy as a whole will be able to sustain a growth pattern that will cushion any kind of a recession in the international market.
The worst hit due to
this rapid expansion of the urban space are the villages. “The process of
urbanisation engulfs villages among many other natural features and Shahberi is
one such village. This has resulted in the metamorphosis of many rural-scapes
into an unfamiliar urban fabric, which was never the case in US,” says Singh.
Today Shahberi stands as the lone village in an area where more than 20
builders are constructing housing projects.
Taking cue from the success of farmers in Pune in Maharashtra, Shahberi’s farmers came up with a plan for a housing society on their land with special focus on urban farming. They sought help from Kamini Singh, who came up with a detailed proposal.
But more than a year since farmers submitted their proposal to the Greater Noida authority there has been no official response. Unofficially, however, Mujahid Hussain receives calls from builders and officials asking him to allow the construction companies to buy their land.
“The officials offered me a hefty bribe in the form of a land parcel in the village Bisrakh in Noida apart from the compensation. They simply want to make sure the land goes to the builders. They have not responded to our proposal because they know we will not pay any bribe to them and because they do not want to let farmers develop their land themselves and sell it themselves,” he says. “If they reject our proposal we will go to court, so they are just sitting on it.”
One of the people on whose behalf calls were made to Hussain is RK Arora, chairman and MD of Supertech. He could not be reached for comments despite repeated attempts.
Meanwhile, real estate agents have already started offering huge sums to people from the village and some have sold their land. “They know that eventually there will be housing projects here and simply want to make money when that happens,” says Sharafat Ali. However, no farmer has been allowed any construction on their land. Mubassir Hussain, who built a higher boundary wall at his house in the village, was beaten up by police and the wall razed under the supervision of Greater Noida officials.
The various federations and groups of buyers like NEFBWA and the NEHBWA who suffered because of the Shahberi case have been demanding changes to laws, both for farmers and to make sure that buyers do not suffer.
“Builders must not be allowed to sell projects unless they have at least 80-85 per cent of the requisite clearances in hand. If this is made a blanket requirement, cases like Shahberi can be prevented,” says Rajiv Goel, a member of one such federation in Noida Extension.
“In Shahberi Section 17 (urgency clause) was implemented mechanically and the authority and builders were cheating farmers and buyers together. Even when the HC gave a stay order on construction the authority and the builders did not stop, a clear case of contempt.” The construction of roads and other buildings stopped after the SC judgment but not one of the land parcels was cleared and given to the farmers in a condition in which farming can continue on it. Roads reaching deep into the village still exist and none of the builders have cleared their buildings and other material, an important condition laid down in the SC judgment.
Aparna Goel, on the other hand, fought for close to ten months to get her Rs. 3 lakh back from Supertech in 2012, travelling every week from Muzaffarnagar to Noida alone. She is probably the only one who managed to get back all her money from a builder in Noida; everyone else at Supertech lost 15 per cent of the amount they initially paid. She has decided to invest her money in Muzaffarnagar itself and is finalising a contractor to construct a small house on the land she owns in the city.