The Haryana government recently announced a one-time settlement scheme, named ‘Samadhan se Vikas’, to recover extended outstanding dues stemming from External Development Charges (EDC) and Infrastructure Development Charges (IDC). This model is inspired by the central scheme ‘Vivad se Vishwas-2020’. A similar offer was made with the EDC Reschedulement Policy in 2018. Real estate developers in Haryana collectively owe the state government over Rs. 10,000 crore in EDC and IDC fees.
Understanding the Charges
EDC is a fee that the real estate developer pays to local civic authorities to maintain public amenities within the boundary of the development project. These projects include road construction, water and electricity supply, landscaping, drainage and sewage system maintenance, and waste management. The amount for EDC is determined by the civic authorities.
On the other hand, IDC refers to the fees paid by the real estate developer to the state government for the development of large-scale infrastructure projects across the state. These projects encapsulate the construction of transportation networks, including highways and bridges.
Legal Implications in Haryana
According to the Haryana Development and Regulation of Urban Areas Rules, 1976, a developer, or licensee, is required to pay the EDC according to a predetermined payment schedule. If the developer fails to deposit the EDC/IDC or does not avail the EDC Reschedulement Policy, the Town and Country Planning Department issues a show-cause notice to such defaulters.
This notice warns of potential bank guarantee revocation due to non-payment of EDC/IDC. Subsequently, developers are obliged to submit a bank guarantee of 15% within 90 days from the commencement of the project. This requirement is in place to protect the interests of buyers and to provide a safeguard against any future misconduct.
‘Samadhan se Vikas’: A One-Time Settlement Scheme
In efforts to recover long-standing dues, the Haryana government has introduced a one-off settlement scheme known as ‘Samadhan se Vikas’. The initiative is designed to encourage the recovery of dues from real estate developers who owe the state government substantial amounts in EDC and IDC fees. Developers who have not yet paid these charges are the main targets of this policy.
The scheme draws inspiration from the central government’s ‘Vivad se Vishwas-2020’ scheme and bears similarity to the EDC Reschedulement Policy of 2018. Ultimately, the goal is to facilitate the payment of these outstanding charges by real estate developers, ensuring the continued development and maintenance of infrastructure throughout the region.
Through implementing this scheme, the Haryana government demonstrates its commitment to recovering dues and maintaining robust urban and regional infrastructure while holding developers accountable for their financial obligations.
Unsettled Financial Dues
Hundreds of real estate developers in Haryana have yet to pay more than Rs. 10,000 crore to the state government under the EDC and IDC charges. This substantial backlog of unsettled financial dues underscores the urgency and necessity of schemes like ‘Samadhan se Vikas’. Such initiatives can potentially expedite the recovery process, ensuring that infrastructure projects receive adequate financial support and timely completion.
The Significance of EDC and IDC
EDC and IDC are crucial elements in the financial structure of urban development, facilitating the provision and maintenance of essential infrastructure and services. These charges allow for the continuous enhancement of civic amenities and state-wide infrastructure projects, catalysing the overall process of urban development. The commitment of developers towards these charges is, therefore, not only a legal requirement but also a significant contributor to urban growth and development.
