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Once known to be a hot favourite destination for NRIs to invest in real estate sector, Jalandhar seems to have lost its gloss in the past few years.

How smart?


In need of a strong planning punch

Rachna Khaira in Jalandhar

Once known to be a hot favourite destination for NRIs to invest in real estate sector, Jalandhar seems to have lost its gloss in the past few years. Even  now, when the city has figured in the list of Smart Cities released by the Ministry of Urban Development (MoUD) to be developed as the first Sports City in the country, little enthusiasm is seen among the real estate developers, who are apprehensive about the planning of the city as a sports hub.

Ushering in a new era

Though not much enthusiasm has been shown by the real estate sector over the inclusion of the city in the Smart Cities list, realty players are hopeful that the step will prove to be a game changer for the real estate sector.

“As Smart City is a  new concept in India, speculations are being made on its effect on the property market. But I am hopeful that with systematic planning, we will be able to bring the buzz back to real estate and will also be able to provide a much better living environment to the city residents,” said Gurpreet Singh Khehra, Chief Administrator PUDA and also the Civic  Commissioner, Municipal Corporation of Jalandhar.  

Mayor Sunil Jyoti said that becoming the country’s first sports hub will provide a unique identity to Jalandhar. “The development of sports infrastructure itself will provide the much-needed push to the dwindling real estate sector in the city,” said Jyoti. He said that besides this, the plan will also present over 10,000  job openings in the real estate sector annually.

No Single Window system

Despite witnessing a real estate boom in 1997, the developers in the city face various challenges.

“While the whole world is following the upward trend to  ‘Go vertical’  by making group housing societies to bring down the cost of a flat and to provide affordable housing to more and more people, getting a license for the same  is still a dream come true for a coloniser here in the state due to stringent norms laid down in the Punjab Apartment and Property Regulation Act(PAPRA),1995,” said Sukhdev Singh, MD, AGI Infra Limited.

Though a real estate developer spends crores to pay for external development charges (EDC), license fee, Change of Land Use (CLU) amongst other charges, it sometimes takes up to two years to get a letter of intent (LOI) issued from the MCJ for getting a  licence for the housing project.  

“Also, there is no single window facility. We have to seek separate permissions from the forest, pollution, Fire, NHAI and other departments to get a housing license issued from MCJ,” said Singh.

Regularisation policy stumped big players

According to Anil Chopra, Chairman of the Confederation of Real Estate Developers of India (Punjab Chapter), the regularisation policy of Punjab Government had played spoilsport by making real estate developers suffer huge losses.

“While a registered developer developed only  55 per cent of the total area and left rest of the land vacant for external development, the government,  through its regularisation policy,  approved hundreds of illegal colonies with construction over 100 per cent areas and sold them at much cheaper rates than us. This forced us to bring down our costs and even caused heavy losses to our NRI clients,” said Chopra.

NRIs change the thumb rule

With the city losing major industries like sports, leather etc to other states  like Uttar Pradesh  and Jammu and Kashmir due to unfriendly industrial policies of the state government, the city was thriving much on the real estate sector which was mainly dominated by  NRI clients until recently. However, as majority of the NRIs had bought properties in licensed colonies, they too suffered heavy losses following which they started selling these at much cheaper rates. Even though the rates came down, new NRI buyers are waiting for further correction. This has created a huge slump  in the real estate business, especially in the city.

Also, with repeated cases of fraud, illegal occupation of their vacant properties, failure of the Punjab NRI Sabha and Punjab NRI police wing to get these vacated, multiple litigations in the courts and lack of civic amenities in the city have also made the NRIs over cautious and reluctant to invest in property in the city and in fact in whole of the Doaba region. 

An Overview of Area-Based Development (ABD) in Jalandhar:

Rs 1000 crore earmarked for just 63 acres

Under the Smart City plan, the proposed area for development will include a 63 acres land chunk that includes area around DAV College level crossing, HMV College, Football Chowk, Babrik Chowk and Bist Doab Canal.

The area was to be developed as a mixed society in Burlton Park, specifically earmarked for the development of sports infrastructure which will include a multipurpose stadium, sports rehabilitation and education centres, commercial trade facilitation for sports goods and hospitality and leisure venues.

Also, the presence of a fresh water canal will ensure 24-hour water supply for drinking purposes and landscaping will be done around banks. Tracks for recreational events like cycling will be constructed along with the canal bed.

Out of the 63 acres earmarked for development of sports hub, 10 acres was planned for commercial purposes. A multi-level parking, a five-star hotel, shopping plazas. And the rest of the 50 acres were planned to be used for construction of stadiums.

However with the civic body planning to spend a whopping Rs 1000 crore on mere 63 acres has raised concern among the real estate developers who have recommended a pan-city development under the Sports City planning. Many have slammed the civic body for keeping over Rs 1000 crore for 63 acres and a merely Rs 200 crore for rest of the city.

Pan-city development: 
LED streetlights, security system and CNG buses

Under the pan city development, CNG buses with disabled friendly doors and GPS will be introduced and one lakh LED streetlights with sensors will be installed across the city which is expected to save electricity worth around Rs 16 crore.

In the Integrated Public Utility & Public Safety system (ITSPUPS), various measures, including SCADA  to predict  flow analysis for sewage and water utilities, installation of over 1 lakh  LED lights and safety measures including installation of CCTV cameras on pan city basis has been planned.

An overview of development works to be taken  over a span of five years

  • Area-based development (ABD) Rs 919.63 cr
  • Gas distribution (PNG) in ABD Rs 32.64 cr
  • Burlton Park sports hub (redevelopment): Rs 567.13 cr
  • Public transport (pan city) Rs 124.88 cr
  • Gas distribution (CNG) in pan city Rs 9.23 cr
  • ITSPUPS (pan city) Rs 190.75 cr
  • LED street light (pan city) Rs 140.25 cr
  • Total Rs 1,984.51 cr

Moving on the growth track

Neeraj Bagga in Amritsar

It is not without any reason that real estate developers, financiers and dealers in the city are hoping for the property market to bounce back sometime soon. Apart from the recent inclusion of the city in the list of Smart Cities to be developed in the first phase of the plan, the proposed opening of tourist projects and Amritsar-Delhi-Kolkata Industrial Corridor (ADKIC) and other such  projects are going to put the real estate market in the city back on the track of growth.

According to Punjab Local Bodies Minister and local MLA Anil Joshi, Amritsar will gain immensely from being included in the list of 100 smart cities. “The holy city is not only the main pilgrim centre of Sikhs , but also an important trade and industrial centre of Punjab and has a detailed master plan, so there will be no hitch in the city getting all the smart city features over the next few years”, he said.

The Union Government has  allocated $1.2 billion for fiscal 2014-15 to build 100 new smart cities, and to develop satellite towns around existing cities.

Smart Cities would be high-tech cities with uninterrupted power and water supply, online delivery of all public services, a digitally-enabled transportation, healthcare, education, utilities, energy grid and real estate in cities, digital security surveillance, modernisation of the public distribution system etc. LED streetlights to be instantly connected to and controlled by a remote lighting management system would be another attractive feature.

Positive vibes

Real estate players and dealers are sanguine over revival of the trade in near future as the Indian Institute of Management (IIM) has already started functioning while Amritsar ranked 25th in list of the 100 smart cities, which is expected to accelerate the pace of development.

P. L Seth, a local shawl manufacturer said, Smart City will ensure state-of-the-art infrastructure while the ADKIC — an Industrial Zone spanning 20 cities across seven states, could become an engine of economic growth binding together diverse cultures, linguistic groups, ethnic identities living on the massive spread of Indo-Gangetic plane. This will certainly bolster trade and economic ties and would see spurt in manufacturing.

He says, “these new projects will result in growth of the real estate sector as these shall generate opportunities in terms of employment and surplus money. Organised real estate sector will benefit immensely.”

The state government, too, seems to have adopted a more positive attitude to give a boost to the slack sale and purchase scenario in the city. Commenting on this Punjab Property Dealers Association, President, Sanjeev Rampal says, “at last the Cabinet approved the waiving off of two per cent stamp duty over collector rate following property purchase on power of attorney. The Akali-BJP coalition government has attempted to iron out the policy glitches which held back the investors from entering the market in the past over nine years of its rule.”

The Municipal Corporation Amritsar (MCA) had submitted development proposals with an estimated investment of Rs 3,800 crore to the Union Government. The proposed surface infrastructure development projects include, solid waste management plant project, convenient mass transport facilities, obstruction free vehicular movement, assured 24-hour power and water supply, solid waste management, more visible greenery, public utilities like toilets, censor directed traffic lights, Bus Rapid Transit System (BRTS), beautification of the Golden Temple corridor.

Of these, BRTS and beautification of the Golden Temple corridor are nearing completion.

Challenges along the way

However, the biggest challenge would be the capability of the Badal government in providing a minimum of 5,000 acres of land to be developed for economic and housing needs. The government had earlier frittered away the opportunity to have an SEZ project for lack of adequate land. 

Pinch of salt

Several industry mavens maintain that these developments should be taken with a pinch of salt. Indo Foreign Chamber of Commerce President B.K Bajaj cautioned that, the government may introduce a host of measures for raising funds from the public like surcharge on fuel, commercial vehicles, stamp duty, property tax, and an urban tax on purchase of new vehicles.

He cautioned that the district administration and municipal authorities have a gigantic task at hand, especially in the old city areas. “It is to be seen how modern technology and mechanisms would gel with the historic town. The walled city is already grappling with dense population, its narrow winding lanes are unable to cater to the increasing traffic, there are rampant encroachments and garbage lifting is tardy and here we are talking of automated systems in all these areas”, he added.

Sanjay Joshi, Manager of Impact Garden, a residential colony, said “Smart City status for Amritsar will prove to be a boon for the citizens and lakhs of tourists who throng the city throughout the year. But there are huge challenges in this regard in terms of the optimum utilisation of its resources, a must for any Smart City for which we need to interlink various departments and also need to overhaul our resource management system”.

He added that his company had set up residential Integrated Township Alpha International City in Amritsar and was in the process of setting up a state-of-the-art Industrial Project. These projects are on the line of Smart City concept, he informed.

Although these announcements have not created any upward trend in the land prices immediately as their implementation will take sometime, the industry is hoping for a bright future.

The Sikh holy city is a strategic border city that is well connected by air, road and rail to the rest of the country and Central Asian countries, but the real estate growth and price appreciation here have not been very promising for the past several years like in the rest of Punjab.

Increasing the tourism quotient

Various tourism projects like summer palace of Maharaja Ranjit Singh in Ram Bagh, Gobindgarh Fort, Heritage Village in Guru Nanak Dev University, Golden Temple Entrance Plaza, War memorial, a temple of Bhagwan Valmiki in Ramtirth area here, are being conserved, restored and built at a cost of thousands of crores.

Ahead of the Assembly elections, buzz is that most of these would be thrown opened for public over the next few months. These have the potential to serve as a catalyst to boost the industry and prolong the stay of tourists in the Sikh holy city.

Housing demand

Even during downtrend for the past some years the demand for housing in the government established planned localities within the city has not waned. “Actually, the prices in these localities have gone up in these colonies during auctions”, says Joshi.

However, similar demand has been missing for housing in the privately established colonies situated outside the bypass. There is not enough business and economic gains to attract the buyers to shift out. The real estate players feel that these new projects will change this trend.

For instance, the site approved for setting up the IIM is located at Nijjarpura village, on Amritsar –Jalandhar road. A number of planned localities set up by the private players are situated on this road and these are going to benefit from the setting up of the new IIM.

The ADKIC project envisages a major expansion of infrastructure and Industry ,  including industrial clusters and rail, road, port and air connectivity along the route.

The industrial and freight corridor will result in the growth of infrastructure in terms of road network and the railway network. “Extension of the corridor will not only boost infrastructure growth in the holy city, it will also create immense opportunities for growth of the industrial sector”, he maintained. All these together will have a ripple effect on the property market in and around the city. 

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