Land Value Capture: A self-financing and sustainable model for infrastructure development

financialexpress.com:

The World Bank estimates that India will need to invest approximately $ 840 billion in urban infrastructure over the next 15 years. The Union Budget 2023-24 has already allocated ₹10 trillion towards capital investment and has identified one hundred critical transport projects for first and last mile connectivity.

Land is central to such interventions. But, land-related matters suffer from legacy problems that transcend across centuries of our history, and differently across states. As a result, the federal system of India includes land in the state list. Yet, land is a critical resource for economic activities and is a matter of national importance. Yet, programs like Digital India Land Records Modernization Program (DILRMP) by the Ministry of Rural Development and Model Act on Conclusive Land Titling (MACLT) are welcome steps at the federal levels to create national-level policies on land-related matters. The Value Capture Financing (VCF) Policy introduced by the Ministry of Urban Development is a welcome step. In this article, we stress the need for executing the policy so that innovative financing models could become a widely accepted reality.

When British tycoon Harold Samuel proclaimed ‘location, location, location’ as a mantra for buying real estate, he was, most certainly, insinuating at its connectivity and accessibility to public services. A piece of real estate is only as ‘prime’ as the infrastructure that envelops it. The construction of north-south flyovers in Mumbai boosted land prices and encouraged housing development in the northern sub-urban areas. Similarly, metro rail expansion in Delhi’s satellite towns has increased residential and commercial real estate activity in the suburbs. In Manila, while the