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Can Ownership Rights Create a Better Life for Residents of Unauthorized Colonies in Delhi?

Updated: Aug 22, 2021

Population of Delhi is estimated to be 29 million, second only to Tokyo with 37 million people; and it is likely to surpass Tokyo by 2028 to become the largest megacity of the world. [1] This unprecedented increase in urbanisation has put considerable pressure on Delhi’s housing stock. The housing vacuum largely affects the low-income sections of population as there is inadequate formal housing stock at affordable prices to accommodate them. The failure of concerned agencies like Delhi Development Authority to cater to this need has resulted in a surge of informal housing in the form of unauthorised colonies (UACs) – from 118 in 1961 to nearly 1800 such colonies today. [2] Though the number of colonies in Delhi has stayed constant for the last few years, there is a widespread increase in the housing density within these colonies.

This piece attempts to delve into the policy actions that have been undertaken to check the unprecedented rise in UACs in Delhi. In this regard, the focus is on the recently launched PM-UDAY (‘Prime Minister - Unauthorised Colonies in Delhi Awas Adhikar Yojana’) scheme and its progress in achieving its ultimate objectives; the gaps in its design and possible way forward.

Figure 1

Major Bhola Ram Colony, Dwarka, Delhi from the year 2001 (left) to 2019 (right)

The dense nature of these settlements is considered to potentially facilitate the spread of contagious diseases/infections and with current situation of coronavirus in Delhi, there is a dire need to limit the density in these colonies. As a politically sensitive issue, UACs have always appeared in election manifestos of political parties that promise UAC residents of formalising the situation. However, there has been no success on that front; instead the situation has become more complex and dismal. This is reflected in the unchecked construction in these colonies, placing heavy burden on the infrastructure resources.

Conferment of ownership rights to UAC residents

PM-UDAY scheme is the most recent development in this context. Its aim is to confer ownership rights through issuance of conveyance deeds to the residents of UACs in Delhi. For this purpose, National Capital Territory of Delhi (Recognition of Property Rights of Residents in Unauthorised Colonies) Act, 2019 has been enacted by the Parliament to allow registration of properties and to provide huge relief to the residents of these UACs from Registration Charges and Stamp Duty. In this regard, The National Capital Territory of Delhi Laws (Special Provisions) Second (Amendment) Bill, 2021 was passed in Rajya Sabha, which amends the National Capital Territory of Delhi Laws (Special Provisions) Second Act, 2011 and extends the cut-off date for UACs eligibility criteria from 2002 to 2014. As per the bill, the unauthorised colonies: (i) which existed as on June 1, 2014, and (ii) having 50% development as on January 1, 2015, will be eligible for regularisation.

The scheme’s framework requires applications from the UAC residents on its portal with all the necessary property and individual details along with GIS coordinates which will be provided by agencies responsible for GIS surveys. The conveyance deeds and authorisation slips are provided after verification of these details.

Though the scheme was launched in October 2019, it has not made much progress even if we discount the delays caused by the coronavirus pandemic. As of March 19, 2021, number of applications was only 16 per cent of total registrations on the website, indicating a slow movement (Table 1). This article deciphers the reasons for the slow progress of the scheme in attaining its objectives and also flags bigger issues that need policymakers’ attention for efficient urban policy planning in Delhi.

Table 1

Progress under PM-UDAY (till March 19, 2021)

Source: Statement by Delhi Development Authority (DDA)

Before delving into the possible reasons for PM UDAY’s slow rate of success as well as other related issues concerning UACs in Delhi, it is imperative to understand the implications of housing informality for its residents. Informality of housing has a bearing on the quality of life and the economic opportunities available to the UAC residents. Such housing units are devoid of various social and physical infrastructure. These places are often marked by the absence of facilities that would be found in planned areas, such as parks, community halls, wide roads, proper sewerage systems etc. Their residents are also disadvantaged in the financial space - had these households been legally recognised, the residents would have been able to seek collateral against their houses.

Reasons for slow progress of PM-UDAY

Some of the reasons for the slow pace of progress under the PM UDAY scheme relate to the long-drawn technical process of application. It is difficult for the UAC residents to understand and absorb it, as many of them are not well educated and technically equipped. In this regard, it is imperative for the government authorities to provide assistance by arranging for awareness camps and ensuring that requisite support is extended to them.

Secondly, an important determinant of the number of applications is willingness of the UAC residents to acquire these rights. As most of the residents are from low-income strata, they do not wish to sell their properties, as was indicated in a pilot survey that NCAER team conducted in a few UACs in Delhi. They are severely affected by the lack of physical infrastructure and amenities in the colonies, which impacts their quality of lives. Due to congested lanes, emergency services like fire brigades or ambulances are not accessible to them. This is particularly evident during the current pandemic when Delhi is witnessing heightened spread of covid-19 infections, many of them being critical in nature. The draft Master Plan for Delhi (MPD)-41 also places importance on the social infrastructure in the existing UACs. In this regard, it is crucial that the developmental work in these colonies is taken up on a priority basis. It will also escalate the property values of these houses thereby opening up the housing market which can financially benefit the poor families. For the poor, property is an important asset and acts as a last resort for being used as collateral to acquire loans from formal sources. Mere conferment of ownership rights does not guarantee improved infrastructure and hence cannot ensure increase in property prices.

Thirdly, one of the concerns that have been flagged by residents who have applied for the rights relates to delays by the government authorities in responding to the objections raised by residents in response to the survey details of their properties. In this context, the grievance redressal mechanism needs to be established and strengthened to dispose of any possible objections.

Missing links and the way forward

Moreover, there are certain concerns that the scheme’s framework seems to have missed. The guidelines do not throw light on the dynamics of buying and selling of the newly registered properties in UACs. What would determine the price of the colonies? Would the circle rate of the adjoining formal location be applicable for these colonies too? All these pertinent issues need to be addressed if the policymakers wish to create housing market in the UACs of Delhi. Or else, the conferment of ownership rights would remain a onetime exercise without any sustainable long term monetary and social benefits.

With regard to the developmental works in these societies, which is the main concern for the residents of these colonies, it is crucial to think about the source of funds for infrastructure like roads, parks, sewerage lines, etc. Development of infrastructure in these colonies is State government’s/Local bodies’ responsibility. Local bodies have limited capacity to raise revenue and need to be provided with adequate funds for the developmental works. By exempting the UAC residents from stamp duty and registration fees, the need for government revenue is unmet. In that case, should these residents pay property tax as a norm? Should we have a policy in that regard? In fact, many of the UAC residents pay property tax in expectation of better urban services, even though it is not mandated upon them as of now. This calls for a streamlined policy to be put in place to solve this conundrum. As per the benefit principle of public finance, one should pay for what one gets. In the current dismal economic scenario, the government cannot afford to subsidise the development work for around 1,800 societies in Delhi and appropriate ways have to be discovered to finance this development.

The policymakers need to seek answers to the questions to ensure the welfare of the people residing in unauthorised colonies in Delhi. A step beyond the mere conferment of ownership rights is required in order to improve liveability of these colonies. This will enhance its property value and empower its residents eventually.



* The author is an Associate Fellow at the National Council of Applied Economic Research (NCAER). The views expressed in this article are personal.

[1] United Nations Department of Economic and Social Affairs, World Urbanization Prospects: The 2018 Revision (Population Division, 2018).

[2] Anna Zimmer, ‘Enumerating the Semi-Visible: The Politics of Regularising Delhi’s Unauthorised Colonies’ (2012) 47 (30) Economic and Political Weekly 89-97.


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