Required transparency for EDC in Haryana

EDC is a terminology that is know to every flat buyer of Haryana. External Development Charges is one of the sources through which funds  come in for the Haryana Urban Development Authority (HUDA). This is charged to the owners of the property or flat buyers in return for services like sewage, roads, water supply and few other town-level facilities provided by the HUDA.

EDC is not transparent in few areas?

The Greater Faridabad Welfare Association and a group of flat buyers have joined their hands, to stand against the delay for the development in Greater Faridabad or Neharpar. The government has dedicated 2,500 acre area comprising Sector 75 to 89 and it is noticed that the colonisers are not charged with EDC arbitrary. Moreover they are making undue profits of several hundred crores and additionally they are  allowed by the authorities concerned to enjoy the large sums of money. Thus collected money for years together will help in furtherance of their business interests at the expense of the hapless flat buyers.

According to the Town and Country Planning Department, they collect the EDC from the coloniser per acre and the coloniser in turn collects it from the flat buyers at per square feet on the total super area (or saleable area) of the flat. Although in this specific area, there is no transparency or uniform policy for collection of EDC and the government not collecting it directly from the buyers and the colonisers charge at will.

Case study as an example:

Omaxe Height which is located in Sector 86 Faridabad,  the occupants are supposed to pay Rs 27,00,37,842 because  the developers owes EDC to HUDA at the rate of Rs 94.94 lakh per acre for around  28.443 acre of land .

As per records the  company collected the EDC on super area (or saleable area) for the project which totals up to 23,00,000 sq. feet, but  it should have collected EDC at Rs.117.40 per sq feet, but instead charged at Rs.150 per square feet. Thus this is a clear case where the coloniser over charged all the flat owners by Rs 32.60 per sq ft,  thus making a gain of Rs 7.50 crore.

Colonizers vs occupants:

According to  the Town and Country Planning, it was reported that  the colonisers are paying EDC to the Department as per the prescribed rates, although  they charge the EDC according to their preferences. They are making profit by putting the EDC  on the saleable area per square feet from the buyers. The whole procedure varies from one colonizer to another.

It is been witnessed that there are no uniform method is being adopted by the colonisers while fixing the rate of EDC.

Reason for increasing the EDC by colonizer:

The colonizers are in a two track line. They are confused and also try to make money from the given options. The colonisers increased the rate of EDC by including the interest because the plots/flats were sold in different years over a span of three years after obtaining licences from the Haryana Government.

Normally maximum projects are sold to the colonizers during the soft-launch itself before procuring the license that  is an illegal practice but a norm in Haryana and no action is taken against it.  This leads a difficult situation for them to invest as well as they take  three years to sell their projects and hence over charged.

Another point which provokes the colonizer to increase the EDC : i.e .,the flat buyer usually at the time of payment of 3rd and 4th instalments submits the EDC to them, but according to practices, they should deposit it to them in six monthly instalments spread over four years. Thereafter, the coloniser is not just allowed to use the large sums of money thus collected for his business interests and now  with the burden of  interest being shifted to the flat buyers, the project faces delays the development of the area and the possession of the flat.

Similarly, again he home buyer who is hit the most hit by the delay as he continues to pay the EMIs as well as the rent and the wait for the flat turns into a prolonged agony

Reader’s take :

As per the RTI Acts, they have also received many information of several colonizers who did not pay even 50 per cent of their EDC dues to the department even after four years of having procured the licence, and they enjoyed the interest on the money being extorted from the poor flat buyers. This matters were ignored and, no action was initiated against these colonisers by the authorities concerned.

For now the Government is mum about the issue. So the questions arises will the consumers/ flat buyer will suffer, especially in Gurgaon and Faridabad or Government is going to take some steps? Hence this leads suspicion over the intentions of the HUDA Government and a downfall of real estate in this areas.