Uttar Pradesh’s industrial development authorities have proposed a draft policy that could reshape the state’s real estate landscape. The policy, which is under review, aims to eliminate inconsistencies and inefficiencies in the land allotment process by establishing standardised guidelines across the three key development authorities: Greater Noida, Yamuna Expressway, and Agra Development Authority.
One of the key features of the draft policy is a proposal to bar developers listed as defaulters by any of the three authorities, as well as companies led by promoters with defaulted projects, from bidding for group housing plots. This move is expected to address the mounting Rs 40,000 crore in land dues owed to the authorities and curb the risks associated with financially unstable developers.
The draft policy comes after over a decade of attempts to create a unified approach for land allotments. As early as 2010, Greater Noida Authority sought to standardise the process but struggled due to logistical challenges. With renewed focus, the draft now aims to address the historical inefficiencies by establishing clear criteria across various land categories, including industrial, institutional, and residential.
The proposed eligibility requirements are designed to ensure only financially stable entities participate in group housing projects. For plots up to 1 lakh square metres, developers must have a net worth of Rs 30 crore, certified by a statutory auditor. For larger plots, the threshold is Rs 60 crore. These financial criteria are part of a broader effort to safeguard investments, particularly in light of several group housing projects that have faced insolvency in the state.
In an effort to enhance transparency and competitiveness, the draft policy also introduces an e-auction mechanism for land allocation. For plots up to 8,000 square metres, industrial and commercial land will be auctioned after a thorough vetting by a screening committee. Developers must secure at least 60% of the total marks in an objective evaluation to qualify for bidding. The e-auction process will also allow bidders to bid on multiple plots, thus enhancing their chances of securing land while maintaining competitive pressure through incremental bidding values.
Additionally, the policy offers provisions for plot cancellations and extensions, aiming to protect developers from unfair penalties in cases of unforeseen delays. The ‘zero-period’ clause, for instance, ensures that financial obligations such as premium and interest payments are suspended during legal or administrative delays, a much-needed relief for developers facing delays in project execution.
A significant shift in this draft policy is the stringent checks on defaulters. Developers with any outstanding dues, legal violations, or who have failed to meet project timelines will face strict consequences, including the forfeiture of deposits. The authorities, however, allow for plot restoration within 90 days of cancellation, provided that developers settle their dues and meet the project deadlines. This approach is aimed at ensuring that only serious and financially stable developers are involved in large-scale housing projects.
With this draft policy, Uttar Pradesh is seeking to address the real estate sector’s long-standing issues with defaulting developers, operational inefficiencies, and project delays. If implemented, it could provide a more transparent, fair, and financially viable approach to land allotment, fostering investor confidence and ensuring that housing projects are executed on time and within budget.
