Is there a hidden game plan behind the DDA Village flats auction?
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Is there a hidden game plan behind the DDA Village flats auction?

Fifty five years ago the Delhi Development Act was passed by Indian Parliament and after receiving presidential assent on December 27, 1957 it came into effect. Among other things it led to the creation of an urban behemoth – Delhi Development Authority.

It was another decade before DDA decided to get into housing activity – that is, build, allot and sell residential properties. Despite the fact that building and selling houses was not the main objective of DDA when it was set up under law, it came to be seen as the provider of reasonably priced homes for the middle and lower middle class through the 1970s, 1980s and the first years of the 1990s.

In the 45 years that DDA has been engaged in housing activity it has allotted a grand total of 394,738 residential flats. Pay attention to the word allotted as it does not mean built because the number displayed on the DDA website includes the re-allotment of surrendered and cancelled flats. Even if you include those flats it translates to DDA making available a princely number of 8971 flats every year.

Anyone with the slightest knowledge on Delhi’s burgeoning demography would agree that DDA’s housing division has built too little. But because it has DDA’s stamp, its houses have drawn hordes at the time of registration of new schemes. In the initial decades the schemes enabled the lucky few from middle classes to secure a house, but in the post liberalisation era, even the DDA has been motivated by trying to desire to get the maximum dividends. No scrutiny has been made if the DDA has remained faithful in fulfilling its objectives – both in letter and in spirit.

Let us look at the latest DDA offering – 110 flats with two, three, four and five bedrooms in the Commonwealth Games Village. The advertisement says that flats are in the most desirable place in the capital. Fair enough – good location, polished pedigree and has the trappings of modern conveniences.

But the fine print reveals that there are a total of 711 flats that DDA has to sell but is presently putting only 110 on the shelf because it was to ascertain the market rate. Forget for a moment if DDA – of all institutions – is unaware of the market rate. Even if we accept the strategy to be legitimate let us see how DDA will do this.

They have asked for tenders form bidders and the flats will go to the highest bidders. Who is eligible for bidding for the ridiculously miniscule number of flats? Citizens of India, NRIs and PIOs, and Central government, state governments, government departments and PSUs.

Only governments and their agencies are entitled to bid for more than one flat.

This way, the ones with the deepest pockets will determine the market rate. It will also falsely inflate the price because the ones who have such deep pockets will bid higher with an idea of out-biding others. This includes governments and its departments who have little constraints of resources. Auctioning resources for business is understandable but not urban housing. For the moment it appears that DDA wants to falsely jack up the market rate as the price in this auction will have a cascading effect.

Given that DDA is a body created by an Act of Parliament, it should not be guided by market diktats alone. It is better to set a reasonable price, seek applications and go in for lots drawn in a transparent manner. Or else, steer clear of housing activity.