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The present attempt of the state government to deal with the problem of evaluation of the added value of land have foundered largely because they incorporated the ultimate public ownership of all development in land. Apart from the weaknesses inherent in allocating land by public agencies, the lack of inter-party agreement on policy produced instability in the land market chiefly because the one political party committed itself to repeal the measures being proposed if returned to power.

As a result, development in land was withheld from the market following the threat of nationalization, while uncertainty deterred development by adding to the risks involved. Thus in Cochin Apartments had few takers because if such a policy would have been implemented, the possibility of significant returns through appreciation in land value was a distant dream. Thus investors in real estate shied away from apartments in earlier times.

But there is now an opportunity for bipartisan agreement. The party in power has accepted the need to collect the added value to a property through DLT and has pitched the rate at a realistic level (60 percent on development value above 30,00,000 rupees). Can the opposition party face up to the economic consequences and administrative difficulties of public ownership, dropping this commitment and settling for the collection of added value to the land through DLT? The answer may well depend on which wing of the opposition party emerges triumphant from the current internal power struggle. To see that we need to wait and watch for some more time.

The inconsistency in decision-making and the lack of a proper long-term vision towards real estate developments is actually hampering sustainable urban developments in Cochin. If the planning authorities woke up to this one fact at least now it would have been better. Some of taxes that are proposed may not achieve the intended growth in the urban areas.

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