Shirley Ballaney and Bimal Patel[4]


Cities in India are facing three distinct challenges in the development of urban infrastructure. The first challenge is to adhere to a development plan in the face of a strong tendency towards unplanned growth. Second, when land is acquired under the Land Acquisition Act, 1894, a ma­jor equity issue arises relating the disparity between those who lose land for a given project and those who do not, but are located close to the project area. This disparity is due to the fact that those who lose land are not only displaced, but also get compensation that does not take into account the potential increment in value of their property due to the project, while those in close vicin­ity of the project are better off on both these counts. Finally, city authorities do not have adequate resources to finance infrastructure and are not in a position to capture the incremental value of land in the absence of a legal and policy framework. The Gujarat Town Plan­ning and Urban Development Act (GTPUDA), 1976 provides for an effective mechanism that addresses these challenges through a two-stage process called ‘Develop­ment Plan—Town Planning Scheme’ mechanism (or the DP—TPS mechanism in short), which works fairly well in Gujarat.

This chapter showcases the preparation and implemen­tation of this mechanism to deliver serviced land for urban expansion in the periphery of cities, which currently con­stitutes its most extensive use. The chapter also briefly lists the reasons underlying the efficacy of the mechanism.

The Challenge of Delivering Serviced Land for Urban Expansion

Continuing urbanization and increasing affluence indi­cate that in the coming decades, vast amounts of built space will have to be added to India’s towns and cities. While some of this addition will be accommodated by the densification of existing urban areas, most will have to be accommodated by the expansion of towns and cities into the surrounding countryside. In India, the surround­ing countryside is hardly unutilized and usually under cultivation. The agricultural landscape usually consists of irregularly shaped plots in a mosaic and is rarely available in large tracts under single ownership public or private. Therefore, in almost all cases, the first challenge in expanding out into the surrounding countryside involves converting a fragmented agricultural landscape into a serviced landscape, fit for urban uses.1 This conversion has

to be on a large scale and not a plot at a time and entails a number of coordinated actions by the public authority. They are mentioned below.

  • an area has to be delimited where all landowners can be legally forced to accept the reorganization of their holdings to make the area suitable for urban use;
  • landowners have to be identified, their holdings estab­lished, and processes put in place for communicating with them;
  • irregularly shaped plots have to be reshaped in a more suitable manner for building modern buildings on them; land has to be appropriated for providing a number of common infrastructure facilities, for exam­ple, streets, water supply, drainage, electrical facilities, public transport, parks, schools as well as for meeting social and cultural objectives, for example, housing for the poor and museums;
  • the infrastructure and amenities have to be planned and built;
  • all the above including infrastructure and amenities have to be paid for; ideally the administrative, capital and operations, and maintenance costs for all of the above should be financed by capturing the increment in land value arising as a result of the transformation. This requires the increment in land value to be estimated in a fair and consistent manner;
  • ideally the above should be achieved through a con­sensual process with minimal use of coercion. It is, therefore, necessary to co-opt the landowners into the transformation and note their opinions, suggestions, and objections. It is also necessary to establish a due process for redressing their grievances; and
  • lastly, once a serviced urban landscape has been created, it is necessary to regulate private development on plots to ensure that development is harmonious and consistent with the planning objectives for the area and the infrastructure provided.

It is clear that managing all of the above actions in a time-bound and coordinated manner poses a truly formidable technical, administrative and legal challenge.

Methods of Converting Agricultural Land into Serviced Urban Land


Given the complexity of bringing into effect a systematic and a priori conversion of agricultural land into serviced urban land in the jurisdictional and administrative con­text of India, most Indian cities have adopted a laissez faire approach. Urban development, led by landowners or developers, is allowed to creep out into the surrounding countryside—a plot or a layout at a time. Usually, a blind eye is turned to such creeping urbanization. Sometimes, a minimal attempt is made to plan or regulate the develop­ment and to levy charges. Once an area is built up and if the residents are able to bring sufficient political pressure to bear on the administration, rudimentary infrastructure facilities such as streets, water supply and drainage are provided to the extent that it is physically possible. Let­ting things be is easy, it requires little foresight and effort on the part of public authorities.[1] [2]


This is a variation on the laissez faire approach where an attempt is made to ensure that, in the midst of creeping, haphazard urban expansion, at least a ‘right of way’ is left open for subsequent provision of trunk infrastructure. The manner in which this is done is as follows. The right of way sought to be left open is drawn up in a statutory city­wide development plan in the form of a network of major roads in the periphery of the city, where it is expected (or zoned) to grow.[3] Land for building the network of roads is forcefully appropriated using the Land Acquisition Act. Even though the very drawing up of roads in the statutory plan results in raising land prices in the areas adjacent to the roads, no attempt is made to charge the cost of building roads to those areas. Roads are built usually after development takes place in the vicinity of the roads. Development, which usually takes place in a creeping (plot-at-a-time) haphazard manner, is sometimes regulated to enable the collection of development charges. However, there is usually no systematic attempt to assess and levy betterment charges.

Land reserved for roads, and therefore condemned for acquisition, is often encroached upon, usually with the full support of owners of such land for whom this is often more beneficial than receiving compensation in lieu of acquisition. If the land is actually acquired, availability of
finance for building infrastructure remains a major issue. This is in contrast to the windfall profits that accrue to landowners whose land is not reserved.[4] In addition to this, haphazard development forces subsequent provision of subsidiary infrastructure to be sub-optimal or inefficient.


A number of cities have constituted powerful public land development agencies, which are charged with the responsibility of providing serviced land for urban expan­sion. Such agencies are empowered to make statutory city development plans, prepare detailed plans for plot­ting areas, and design and provide them with social and physical infrastructure. They have the muscle to forcefully acquire peripheral land using the Land Acquisition Act and to raise finances for building infrastructure.[5] When developed, plots are sold at market prices to defray devel­opment costs.

Though this seems an effective approach which gives very high flexibility to envision, plan, and build new urban areas, in practice however, the functioning of public land development agencies has been far from sterling, and today the approach is widely considered to be unviable.The fundamental problems with this approach are as follows. First, this approach seeks to transfer more or less the entire increment in land value resulting from the urbanization to the public agency. By dislocating and dispossessing those whose lands are acquired, this approach imposes very high tangible and intangible costs on them. Slowly, as landowners (farmers) in areas surrounding cities wizen up to this, it becomes politically more and more difficult and economically more and more costly to acquire vast tracts of agricultural land.[6] Second, because the agency enjoys a monopoly, there is no mechanism to ensure its efficient functioning and has no reason for it to heed the nature of demand. Serviced land provided by such agencies tends to be costly and unaffordable for vast sections of the urban population, either because of operational inefficiencies or because of the adoption of unaffordable planning and engineering standards. Third, the opaque structure of public land development agencies, combined with vast flows of finance, has turned such agencies into unwieldy behemoths, also widely considered to be highly corrupt.


Today, with the increased pace of development and higher aspiration levels, it has become clear that alternatives to haphazard laissez faire development and ineffective pub­lic agencies are urgently required. There is also a greater willingness to experiment with market mechanisms and to partner with the private sector. On account of this, a number of state governments are announcing ‘Township Policies’.[7] Here, private developers are encouraged to pri­vately assemble agricultural land in the countryside, wher­ever they think it is viable to develop serviced urban land or land and buildings (‘townships’). Government support is provided in a number of ways. Some states help with land acquisition. Others only promise regulatory support; re-zoning of the land in statutory development plans, and quick ‘singe-window’ approvals. Most assist by providing connectivity to existing infrastructure. Developers are expected to privately raise finances and invest in build­ing infrastructure and/or buildings. Though a number of township policies have been announced, considerable confusion continues to prevail and it seems to be too early to say how this mode of land conversion will play out in the long run.

Urban Development, 1997. With ample non-agricultural land available for urban expansion, cities in the United States could respond very differently; see John W. Reps, The Making of Urban America: A History of City Planning in the United States, 1965.

Using the ‘Development Plan—Town Planning Scheme’ Mechanism to Appropriate Land and Build Urban Infrastructure


This mode of developing serviced urban land from agricultural land evolved during the early twentieth century in the erstwhile Bombay State Presidency. Today it is used only in Gujarat. It is a two-stage process which is defined in the GTPUDA, 1976[1] a macro-planning stage and a micro-planning stage. First, the Development Authority[2] of a town or city draws up a statutory, decadal development plan (DP) for the town or city as a whole; showing where the city is expected to expand into the surrounding countryside. In these new expansion areas, which are usually a mosaic ofagricultural plots, the network of major roads and routes for trunk infrastructure is also drawn up.[3] In the second stage, the expansion area is then divided into a number of smaller areas usually between 1 and 2 sq km each. Figure 24.2 shows agricultural areas surrounding Ahmedabad zoned for urban expansion and delineated into a quilt of smaller areas. The Development Authority then, in a phased manner, takes up each of these smaller areas for the development of a Town Planning Scheme (TPS) there, which is a detailed land
reconstitution, infrastructure development, and financing proposal rolled into one.

The Process of Preparing a TPS:

An Example[4]

The process of preparing a typical Town Planning Scheme in the periphery of the city is being focused upon here. The example used is TPS No. 90 Vinzol 2 [5] in Ahmedabad. The area of this scheme, measuring 82 ha and consisting
of 80 separate plots of land around Vinzol village in the southern periphery of Ahmedabad, was zoned for urban expansion in the Ahmedabad Urban Development Authority’s Development Plan prepared in 1999. Being close to the Mehmedabad Highway and the Sardar Patel Ring Road, it was envisaged that the area would come under intense growth pressure from surrounding industries. As Figure 24.3 shows, in the north the TPS is bounded by the Khari river, on the west by the Mumbai- Ahmedabad Railway line, and on the east and south by other town planning schemes. At the time of preparing

the TPS, most of the land was vacant with Vinzol village within it.


At the outset the area over which a TPS is to be planned is surveyed in detail. Various topographic features, build­ings, structures, trees, fences, infrastructure, etc. are marked including all private possessions that may have to be compensated for when the plan is implemented.

[1] This Act was a revision and extension of the Bombay Town Planning Act, 1954, which was based on the even older Bombay Town Planning Act of 1915. The 1976 Act has also been subsequently refined. The latest amendment was made in 2000.

[2] The Development Authority is also constituted (or designated) under the provisions of the GTPUDA, 1976. The Act provides a completely integrated framework for defining an agency, empowering it to plan, and providing it a mechanism to implement its plan. The GTPUD Act 1976 is administered by the Urban Development and Urban Housing Department, and therefore, Development Authorities report to it.

[3] The Development Plan is supposed to be a comprehensive strategic document for the development of the city. It is expected to address a variety of city-wide issues besides growth management in the periphery, for example, zoning and infrastructure development in the existing areas, urban transport and policies for issues such as heritage protection, economic development, and environmental protection. Its preparation also allows for limited public participation. What concerns us here is growth management at the periphery.

[4]  This section is based on a paper by Shirley Ballaney, The Town Planning Mechanism in Gujarat, India 2008.

[5] Prepared for Ahmedabad Municipal Corporation (AMC) by EPC Development Planning and Management Pvt Ltd (EPCDPM), Ahmedabad.

[2] It can be argued that though the laissez faire approach results in a sub-optimal solution, it is better than a forceful administration totally thwarting city expansion. As the Chinese, Cuban, and South African experiences have shown, forcefully thwarting city expansion can impose high social and economic costs and lead to build up of pressures that eventually require drastic corrections.

[3] More ambitious development plans also draw up and reserve land for social amenities such as parks and schools in the areas zoned for expansion. For our purpose here, no distinction needs to be made between land reserved for roads and for other facilities.

[4]      Urban development planning of this type generates vicious politics between owners whose land is reserved and who stand to lose much and other landowners in the vicinity who stand to gain much. Such a mode of planning has done much to spur corruption and undermine the very idea of city planning.

[5] The Delhi Development Authority is the best example of such an agency. This strategy was precisely used in building new towns such as Chandigarh, Gandhinagar, and Bhuvaneshwar. Here however, the objective of providing land for urban expansion was complemented by objectives of identity politics; see Ravi Kalia, Chandigarh: In Search of an Identity, 1987.

[6] City Planning, when combined with this implementation approach, has also contributed to a vitiated politics surrounding city planning and done much to discredit the very notion of city planning.

[7] Townships are analogous to Special Economic Zones (SEZs) and the distinctions are insignificant for our purpose here.

[4] The authors would like to acknowledge the contribution of Mr Atul Patel, Computer-aided design technican at HCPDPM for the drawing in the chapter.

  • European cities faced a similar challenge during the nineteenth century when, in the wake of the Industrial Revolution, cities rapidly expanded. European responses to the problem are available in Thomas Hall, Planning Europe’s Capital Cities: Aspects of Nineteenth-Century