Budget proposal 2019_New_Urban_Land_Policy_and_Land_Appreciation_Tax_with_three_sources_of_large_untapped_capital

Ashish Puntambekar , The Nataraja Foundation ( Mumbai ) , All Rights Reserved
BIG Idea for Union Budget 2019
Land Appreciation Tax with Three Sources of Finance
Revolving Monetization Concept unlocks US $ 1.25 Trillion of Value, Trapped within Indian Cities by 2032
Large Development Projects
in US $ 50 Billion Lot sizes under
( Urban Dev + UEW Projects Group ) Executed
Under the Aegis of the LPA
Large Capex Projects Authority ( LPA ) for large projects and
Municipal Corporation for smaller projects
NITI Aayog
Formulates UEW Policy
Ministry of Finance : Notifies UEW Policy, Creates security basket of
$ 100 Billion worth PSU shares to reduce coupon rates on bond issues
and appoints Consortium of Banks to handle International offering
Consortium of Indian
Banks issues Bonds
Govt Share of Public Sector Company
Stock worth US $ 100 Billion pledged as
Security to lower Bond Rate
Financing plan carries No Risk … As these are physical asset backed securities with proper
market value. Govt. gets committed to a Urban Equity Withdrawal programme for 15 years, But
sticks to its Fiscal Responsibility Agenda
100 % issue to International investors, Sovereign Wealth Funds etc
Three UEW Asset Classes worth US $ 1.25 Trillion
Indian Investors
80 %
20 %
Asset Sale
$50Billion
Security
Fifteen such transactions of
US $ 50 Billion each … planned
over next 15 years to raise a
total of US $ 1250 Billion
RevolvingMonetizationConcept
Capital Release & Monetization
Mechanism … with safeguards
TERM SHEET
20th ‘ Dec ‘ 2018
Selected
Project Assets & Developers
BUDGET
2019
4
3
1
2
7
8
9
11a
11b
Prime Ministers Office
Private Sector Project
Developers
Bidding Rounds
5
10
Establishes
LPA
6
LAND APPRECIATION TAX ( LAT )
LAT
12
$50Billion
+Interest
After Construction
Project Sale / 60 Year lease

2
Contents
 A Policy & Tax Proposal … in two Parts
 Thinking behind this Budget Proposal … and its Benefits
 Learning from Chinese Experience (1) … Unlocking Value Trapped in Cities ( 1993 – 2018 )
 Learning from Chinese Experience (2) … Support for the Manufacturing Sector / “ Make in China ” Mission
 Part 1 … Releasing US $ 1.25 Trillion Trapped in Indian Cities
 Proof of Concept … L & T’s Bandra ( E ) Project Proposal
 Three Sources of Cash Trapped in Indian Cities
 Detailed Exposition of Proposed Policy
 Part 2 … The Land Appreciation Tax ( LAT )
 Execution Concepts :
 Proposed Value Unlocking Mechanism … For Indian Cities
 Creating a Large Projects office under the PMO … Execution Focused Machine
 Projects which will become possible … Mumbai & Kolkata Port Re-developments
 Investment Multiplier Impacts
 Sarvodaya Concept … Sharing wealth with Farmers / Urban Poor
 What will Success look like ?
 Thank you

3
A Policy & Tax Proposal … in Two Parts
Notes :
1. The first idea ( i.e Un-locking capital trapped in cities ) is based on a World bank PPIAF Policy paper No 7, By George E
Peterson ' 2009 … on Urban Equity Withdrawal ( UEW ), but it goes far beyond the original idea.
2. The second idea ( i.e Land Appreciation Tax ) , is based on a Successful implementation in China
This Proposal has Two Parts
1. New Policy to Un-lock US $ 1.25 Trillion in Cash Trapped in Indian Cities
2. A Tax Proposal … New “ Land Appreciation Tax ( LAT ) ”

4
Thinking behind this Budget Proposal … and its Benefits
Problem description
 India’s GDP growth ( 2019 – 2025 ) is threatened by a Global Trade War
 Export led growth strategy , based on a ” Make in India “ plan could
therefore face serious headwinds in 2019 – 2022
 Un-Employment could increase if the Global Economy slows further. This
might create a Law and Order situation across India
 There is therefore a Need to Stimulate Domestic demand in a Creative
manner
Proposed Policy Response
 Stimulate Domestic demand … by Un-locking US $ 1.25 Trillion trapped
in Indian cities
 Learn from China … Un-lock value trapped in Indian cities. Speed up
projects / Increase land supply in cities through innovative tax policy
Expected Benefits
 Expansion of the size of the Union, State & Municipal budgets
 Massive boost for “ Make in India ”
 Creation of upto 65 Million New Jobs by 2025-27
 Protect India from Global Trade war … by starting up a Large Domestic
demand engine
Challenges to Indian GDP Growth ( 2019 – 2022 )
1. A growing Global Trade War threatens to
de-rail India’s Export led growth strategy
based on a “ Make in India ” plan
2. Indian industry not sufficiently equipped for
High quality manufacturing … Mainly due to a
skills deficit
3. Developing a “ Plan B “ for the Indian
Economy is therefore a Strategic priority

5
Learning From Chinese Experience (1) … Un-locking Value Trapped in Cities ( 1993 – 2018 )
 China has used Urban Equity Withdrawal ( UEW * ) … to Un-lock Value Trapped
in cities since the 1990’s
 The Land Appreciation Tax ( LAT ) came into effect in Jan 1994 … But was
properly enforced in 2006
 A combination of UEW + LAT … have helped China to :
 Increase land supply in cities and bring down property prices
 Speed up projects
 Bring in Billions of Dollars in Foreign Investment since the 1990s
 Create Millions of New Jobs in the Construction sector
 Expand the size of its Central, Provincial & Municipal budgets
* Urban Equity Withdrawal UEW ) : In normal words this means
Unlocking value trapped in land banks in cities and using the cash
released either within the city for urban renewal or to Rural areas
for rural growth
A combination of UEW + LAT … have
helped China to Multiply its GDP

6
Learning From Chinese Experience (2) … Support for the Manufacturing Sector / “ Make in China ” Mission
Unlock land value trapped
in Chinese cities
Initiate large
construction
projects
Create massive
domestic demand for
Manufactured goods
used in construction
projects
Create
millions of
New jobs
Learnings from the Chinese Experience :
1. It is possible to Start Very Large Construction Projects … Without budgetary Support
2. All the money required for Financing Construction activity can be generated by monetizing land value … from within the site itself
3. Projects generate cash which can be Re-deployed elsewhere in Rural areas
4. Large construction projects … create huge demand for manufactured goods within the economy
5. Large scale increase in Construction & Manufacturing activity … leads to New Job creation on a massive scale
6. However … Process may be slower in India due to Democratic Processes
China Model is like a Fast Breeder Nuclear Reactor … Produces more Cash than it consumes.
India needs to learn from China’s experience

7
" If we are going to do something Ultimately … We might as well do it Immediately ”
– Henry A Kissinger ( Former US Secretary of State )

8
Part 1
Releasing US $ 1.25 Trillion Trapped in Indian Cities

9
Proof of Concept … L & T’s Bandra ( E ) Project Proposal
L & T’s Bandra ( East ) Project … A Breakthrough In Large Project Finance in India … and a harbinger of
larger projects to come
On the 31st of Oct ‘ 2015 , the Times of India carried a Report about Larsen & Toubro’s Bandra ( East )
Project Proposal.
 L & T’s project proposal is unique …
 The Maharashtra State Govt. is owner of the 93 Acre Property
 Project Proposal in Brief :
L & T likely to win the contract , as earlier
cash offer by a builder consortium to State
Govt. was only Rs. 1300 Crores
Sl. No. Amount
Crores of Indian
Rupees
Amount
In Billion of US
Dollars
1 L & T to Invest 30,000 4.19
2 Max Expected Sales
Realization
1,25,000 17.47
3 Project Management
Consultant Fees
5000 0.70
4 L & T’s expected Profit
( Balancing Amount )
20,000 2.8
5 Govt. of Maharashtra Payoff 70,000 9.78
Just 93 Acres will release
US $ 9.78 Billion in Free
Cash
Capital to be released for development projects
Rs / US $ Exchange Rate ( 17th December ' 2018 ) : 71.55

10
A Larger Question
If a 93 Acre Plot in Bandra ( E ) can potentially Unlock Rs 70,000 Crores in value
How much more value can be unlocked in cities across India ?

11
Three Sources of Cash … Trapped in Indian Cities
 We know that Large Scale Value is Trapped in Indian Cities
 The Three Distinct Sources Are :
1. From Central / State Govt. owned land in Metro Cities : US $ 50 Billion
2. Land Conversion from Agricultural to NA at city limits : US $ 300** Billion
3. Planned Re-Zoning of Indian Cities : US $ 900 Billion
Total US $ 1250 Billion
A total of US $ 1250 Billion * can potentially be released and all it needs is a Govt. Policy
* Slides 13, 14, 15 and 16 contain the Technical details of the Budget proposal
It is estimated that PSU land alone … in Indian
Metro cities can help raise US $ 168 Billion
or 12 lakh Crores for the Govt. of India over the
next 10 years. So the US $ 50 Billion taken here is
a conservative estimate.
This first source was discussed by the author with
Dr. Vijay Kelkar in 2010 and in 2012 it was included
in the Kelkar Committee Report on Fiscal
Consolidation.
Items Nos (2) and (3) were added later.
Item (2) has been estimated (by others at US $ 2
Trillion) . The author however has taken a more
conservative US $ 300 Billion number.
Author has made a Presentation on the subject at
the Asian Development Bank ( ADB ) Clean
Energy Forum in Manila in June 2016

12
Detailed Exposition of Proposed Policy

Sl. No. Source Description Estimate of Total
Possible Corpus
( US $ Billion )
Total Amount Available
( Rs. Crores )
Cash Available Each
Year
( Rs. Crores )
Remarks / Critical Assumptions
I Phase I Financing … ( 2019 - 2024 )
1. Potential Urban Equity Withdrawal from
PSU Land Banks in Metro Cities For
Financing Education Infrastructure In
Smart Cities
( Mumbai, New Delhi, Chennai & Kolkata ).
In Addition PSUs own large tracts of land in
smaller cities like Bangalore, Pune,
Hyderabad etc.
50
( Conservative )
3,57,750 71,550 Central and State Government owned Public Sector Undertakings ( PSUs ) own very
valuable land in cities like Mumbai, Delhi etc. The total value of Land Banks with the PSUs
is easily of the order of Rs. 12 Lakh Crores or US $ 168 Billion. The US $ 40 Billion
estimate is therefore a very conservative estimate.
Govt. could maximize its earnings by raising FSI’s on this land before selling it. It is
proposed to cherry pick 3000 acres out of a total of 30,000 acres of PSU owned land for
this purpose.
The Largest land holdings outside of the railways are available with the Port Trust Of India
which has over 50,000 Acres of Land, some of which is in large Urban Centers. The
Railways also has approximately 10,000 Acres in cities and towns across India.
Shared Selling : It is proposed to raise the FSI on this 3000 Acres of land from current
levels of 1.5…to between 6 and 9 before putting it on the market. 50 % of the money
realized from the sale can be used to finance large public education and healthcare projects
after paying the initial 50 % to the PSU.
Even after the shared sale of this 3,000 acres for financing large national Education and
Healthcare schemes, another 27,000 acres of prime land will still remain with Central &
State PSU's.
Of the balance 27,000 acres, another 10,000 acres can be used for earning annual lease
rentals. This will provide a fixed income for Central / State governments, thereby helping
them pay for the operations costs of state education and healthcare schemes, a majority of
which will be in rural areas in the concerned states.
TERM SHEET
Note : This Term Sheet specifies the possible sources of Alternative Finance for Large Infrastructure Projects ( Smart Cities, Healthcare and Education ) in India across 29 States & 7 Union Territories. This document is intended to be a
definitive source of information regarding non – conventional / non budgetary finance for the Govt. of India. The 3 non – conventional sources put together represent nearly US $ 1.25 Trillion in financing which can be made available to
Central, State & Local governments over the next 10 – 15 years. This material ( Rev 00 ) is protected under the Indian Copyright Act and has been prepared by the Nataraja Foundation for use by Ministry of Finance / NITI Aayog, Govt. of
India. A separate Rev 01 will be issued shortly, and will include additional financing possibilities for large National Education & Healthcare programmes.
Identification of Large Innovative Pools of Alternative Finance
To Raise US $ 1.25 Trillion
We are assuming that Rs. 71,550 Crores will become available each year, starting in
2019.
It is proposed that this money be withdrawn in 5 yearly installments ( 2019 to 2024 ) .
The sums so raised from the Shared Selling process need to be immediately moved
to a Secure Escrow Account to finance Large Infrastructure / Smart Cities, Clean
Energy & Mass Education and Healthcare projects.
Action Item for NITI Aayog
As the sums of money that will be realised under this Urban Equity Withdrawal plan
are huge, Ministry of Finance & NITI Aayog need to issue a detailed note on
procedure to be followed so that money is released from the Secure Escrow
Account only after project milestones are achieved.
The money should preferably be released under a high court monitored process to
prevent Scams / Leakage as has happened in a north Indian state where large sums
were reportedly withdrawn after they were raised under a “ Securitization
Transaction “.
After this withdrawal, there was no money left for the next State Govt. when it wanted
to execute projects as certain revenue streams were pledged under the securitization
facility by the previous government to the banks and could not be used to fund new
projects.
The Nataraja Foundation
Financing Sources ( For Budgetary Expansion )

Possible Corpus
( US $ Billion )
( Rs. Crores )
Cash Available Each
Year
( Rs. Crores )
2. New Enhanced Fee for Conversion of
Agricultural Land to Non Agricultural ( NA
) Land at periphery of cities.
300 21,46,500 2,14,650 Land Conversion is a very large potential source of revenue for state & municipal
governments which is currently being ignored.
Land is a State subject and State Governments usually charge between 5 % and 9 % of
the existing basic value of the agricultural land as a conversion fee or conversion tax ( as in
the case of Andhra Pradesh ).
This results in a huge loss of potential revenue to the State & Municipal Governments as the
conversion fee of 9 % is applied to the value of agricultural land.
Actually, maximum appreciation in the value of land happens only after its conversion to “
Non Agricultural “ status … resulting is massive revenue loss to Govt.
It has been estimated (by others) that the potential income for State / Municipal
governments from a 10 % conversion fee ( levied on land after conversion to NA ) could be
of the order of US $ 2 – 3 Trillion over the next 20 years.
The nataraja foundation however takes a more conservative view and estimates potential
State / Municipal Govt. earnings from levying the Land conversion fee on Non Agricultural
land ( i.e. after its conversion ) at Rs 21.46 Lakh Crores ( US $ 300 Billion ) across 29 states
and 7 union territories over the next 10 years ( i.e US $ 600 Billion over the next 20 years ).
This value needs to be determined when this land is sold for the first time under its Non -
Agricultural status and taxed on the basis of the proceeds received by the seller. Once the
sale takes place, the original conversion fee charged on the value of the Agricultural land
can be reimbursed.
The nataraja foundation recommends that this money be used for the financing of large
Education / Healthcare & Smart City facilities. This could lead to India entering the
league of developed nations within the next 10-15 years. The good way to do this is by
deploying a small part of this massive amount of capital in capacity building projects like
the Vivekananda Education Megaproject which has been submitted to the Ministry of
HRD.
We are assuming that Rs. 2,14,650 each year can potentially become available each year, starting in 2020 - 2021 when the
necessary legislative / legal and administrative mechanism is put in place at the State Govt. and Municipal levels.
The sums so raised from the process need to be immediately moved to a Secure Escrow Account to finance Large
Infrastructure, Smart Cities, Clean Energy , Mass Education & Public Healthcare projects.
In India the “ Urban Equity Withdrawal “ concept can be used by intelligently drafting new legislation to capture revenue for the
Govt while giving a substantial incentive to the private owners of land.
As the sums of money that can potentially be realized under the Urban Equity Withdrawal plan are huge, Ministry of Finance &
NITI Aayog need to issue a detailed note on procedure to be followed so that money is released from the Secure Escrow
Account only after project milestones are achieved.
A small amount of these revenue streams can also be securitized with the funds going into another Escrow account that is
mapped to the securitization transaction.
The money in the Escrow Accounts should preferably be released under a high court monitored process to prevent Scams /
Leakage as has happened in a north Indian state where large sums were reportedly withdrawn after they were raised under a
“ Securitization Transaction “.
After this withdrawal there was no money left for the next State Govt. when it wanted to execute projects as certain revenue
streams were pledged under the securitization facility by the previous government to the banks and could not be used to fund
new projects.
Potential Cash release each
year between 2020 – 2028

Possible Corpus
( US $ Billion )
( Rs. Crores )
Cash Available Each
Year
( Rs. Crores )
3. New Enhanced Fee for Re-Zoning
Urban Land for Development of Smart
Financial Centers
900 64,39,500 6,43,950 India is set to see massive changes in the Urban Landscape over the next 20 years as 400
Million people across the country migrate from rural to urban areas.
Re-Zoning of our cities and the creation of Smart Financial Centres present state
governments and municipal corporations in 600 districts with a huge, Once in a Century
Opportunity to re-invent the urban landscape and at the same time raise an almost unlimited
amount of capital to finance the re-construction of towns and cities across India.
The nataraja foundation proposes that a detailed Urban Planning Exercise be carried out in
over 600 district headquarters and in each surburb of our Metro Cities. In this exercise
certain areas in each suburb ( within metros ) and in each district, will be designated as
New Commercial / Smart Financial centers by re-zoning them and increasing their FSI
from 1.5 – 4.0 currently to between 6 – 9.
Proposed Local Govt. Scheme
Citizens / Owners of these properties could receive 70 % of the increased valuation
proceeds and the State / Municipal Governments will collect 30 % in cash once the
properties are sold to new buyers or re-developed by the original owner and sold to buyers.
The government share of the additional revenue will be used to finance large Education &
Healthcare schemes and improve the city’s infrastructure. This Fee based measure has the
potential to raise approximately Rs. 64.39 Lakh Crores for State and Local governments
across 600 Indian cities ( conservative estimate ) over the next 10 - 15 years.
Big Opportunity for Indian / Foreign Urban Planners
Specific areas will be selected for Re-Zoning and Increasing FSI after a 100 year, detailed
perspective plan is prepared for each city / district headquarter. The objective of the exercise
will be to turn our cities into smart cities through excellent planning and by reducing
Transportation load.
We are assuming that Rs. 6.439 Lakh Crores each year can potentially become available, starting in 2020 - 21 when the
necessary legislative / legal and administrative mechanism is put in place at the State Govt. and Municipal levels.
The sums so raised from the process need to be immediately moved to a Secure Escrow Account to finance Large
Infrastructure, Smart Cities, Clean Energy , Mass Education & Public Healthcare projects.
In India the “ Urban Equity Withdrawal “ concept can be used by intelligently drafting new legislation to capture revenue
for the Govt. while giving a substantial incentive to the private owners of land.
As the sums of money that can potentially be realized under the Urban Equity Withdrawal plan are huge, NITI Aayog
needs to issue a detailed note on procedure to be followed so that money is released from the Secure Escrow Account
only after project milestones are achieved.
A small amount of these revenue streams can also be securitized with the funds going into another Escrow account that is
mapped to the securitization transaction.
The money in the Escrow Accounts should preferably be released under a high court monitored process to prevent Scams
/ Leakage as has happened in a north Indian state where large sums were reportedly withdrawn after they were raised
under a “ Securitization Transaction “.
After this withdrawal there was no money left for the next State Govt. when it wanted to execute projects as certain
revenue streams were pledged under the securitization facility by the previous government to the banks and could not be
used to fund new projects.
Potential Cash
release each
year between
2020 – 2030

Possible Corpus
( US $ Billion )
( Rs. Crores )
Cash Available Each
Year
( Rs. Crores )
3. Continued …
New Enhanced Fee for Re-Zoning
Urban Land for Development of Smart
Financial Centers
Big Opportunity ( Contd. )
As India has a severe shortage of town planners currently, it will be necessary to bring in
sophisticated town planning skills from around the world. This will ensure that Indian cities leapfrog
development cycles and deploy the latest in town planning practices.
The net cost of using International talent in planning our cities will be just 2 % – 3 % of Project cost.
It is therefore far more economical to use the best town planning talent from abroad .
Due to flawed policy, town planning was ignored in India for the last 60-70 years. Town planning skill
sets in India therefore declined and our current set of town planners ( Just 2000 professionals ) need
proper training which is best provided by foreign experts. If we use these existing, low skilled, town
planners to re-plan our cities, it will lead to a disaster and a loss of Lakhs of Crores worth of GDP
due to very poor design / planning skill sets in the country at present.
We are of the view that all roadblocks that hamper the bringing in of world class town planning skills
from foreign countries, needs to be removed.
Re-Zoning Of Cities could Double Indian GDP
The net GDP gain from this one time re-zoning exercise alone has the potential to Double Indian
GDP by 2027, besides raising large sums of capital for government to create state of the art
infrastructure in Urban India. Re-deploying some of this money to rural India ( Building Lakhs of
Check Dams, 30,000 Rural Schools & 6000 Rural Hospitals ), will also Stop Rural Migration to Cities
and prevent the creation of Slums in our cities. The beneficial impact of this strategic deployment of
Urban Equity to rural areas will be huge.
Re-Zoning of Indian cities will also create millions of new jobs.
By bringing in various clean technologies and promoting low carbon construction practices within the
Re-Zoning related construction projects, Indian cities can become models of sustainable growth,
providing massive employment opportunities while serving as the principle base for a “ Make in
India “ Plan. Startup of large construction projects in India is therefore crucial for the achievement of
the Prime Minister’s “ Make in India “ plan.
Grand Total of Urban Equity Withdrawal
Options ( Unlocking Value )
1250 89,43,750 9,30,150
Potentially Rs 9,30,150 Crores (Rupees Nine Lakh, Thirty Thousand, One Hundred and Fifty Crores)
can be made available each year for Smart Cities in India Across 29 States and 7 Union Territories.
All of this money can be raised totally independent of either the Central or State Government
Budgets & without diverting any cash from existing Schemes.
Creating 60 Million new Jobs in Urban Areas by 2025
It is critical that all State Legislatures pass the 74th Amendment to the constitution before implementing this
scheme.
Passing of this amendment will lead to the shutting down of illegal State Govt. Parastatials such as MMRDA
( in Mumbai ) and DDA ( in New Delhi ) which are working against the constitution of India . It is critical that
MMRDA and DDA be shut down / converted to State PSU’s and be made to compete with private companies to
provide services to citizens.
MMRDA / DDA’s current “ Development Authority “ status is simultaneous with their “ Project Promoter “
status. This creates very serious conflict of interest issues and serious delays in project implementation ( It
takes 5 years to start up even minor projects in Mumbai ). After shutting these organizations down / converting
them to state PSU’s , The “ Development Authority “ role should be returned to the Municipal Corporations
which should have a directly elected and accountable mayor.
Today MMRDA and DDA have prevented India from producing the kind of political leadership that cities such as
Paris (François Mitterrand), London ( Boris Johnson ) and New York ( Michael Bloomberg ) have produced.
Shutting down MMRDA and DDA and a mere passing of the 74th Amendment to the constitution will result in
the creation of nearly 60 million jobs across India as Urban development projects are speeded up
tremendously.
MMRDA / DDA and the bureaucrats within them are preventing 60 million jobs from being created in India.
Their social & economic cost is extreme and they therefore need to be shut down.

17
Part 2
The Land Appreciation Tax ( LAT )

18
The Land Appreciation Tax ( LAT ) …
… In China
Land Appreciation Tax in China & Israel :
Gains on the sale of real property, net of development costs, are subject to the
LAT. LAT applies to all types of land, construction and immovable property,
including commercial, industrial and residential sites.
The implementing regulations provide for a deduction of qualified financing
expenses, related taxes, administration and selling expenses, with prescribed
caps in different situations.
A super deduction equal to 20 % of property development costs and land
purchase costs is available to real estate development companies.
Source : Deloitte Report on Taxation and Investment in China in 2017
The implementation of the LAT together with a Policy to Unlock
Cash Trapped in Cities has helped China greatly expand its GDP
… and Create Millions of New Jobs
Please refer
attachments 4 & 5
for details and a
discussion on LAT
The Land Appreciation Tax ( LAT ) is a Creative way to Stimulate
Urban development & Create Millions on New Jobs

19
Execution Concepts

Proposed Value Unlocking Mechanism … For Indian Cities
To effectively monetize the massive value
trapped in land banks in Cities across India,
the following steps are necessary :
1. Ministry of Finance / NITI Aayog need to
prepare a Policy paper on Urban Equity
withdrawal
2. Ministry of Finance needs to create a
basket of Govt. held PSU shares with a
value of US $ 100 Billion ( Out of a total
holding of > US $ 300 Billion),to provide
comfort to bond investors
3. A Large Projects Office needs to be set up
directly under the Indian Prime Ministers
Office ( PMO ) on the. Lines of the
Infrastructure and Projects Authority (IPA)
in the UK, which reports directly to the
Indian Prime Minister.
4. Urban Development Ministry in
collaboration with the Energy Ministry and
The Ministry of Rural Development need
to identify and design projects in an
integrated manner that transfers wealth in
an equitable manner.
5. To prevent leakage of funds and scams, it
is absolutely essentially that each project
be monitored by the High Court of the
State, with cash being released as strict
milestones are met.
Large Development Projects
in US $ 50 Billion Lot sizes under
( Urban Dev + UEW Projects Group ) Executed
Under the Aegis of the LPA
Large Capex Projects Authority ( LPA ) for large projects and
Municipal Corporation for smaller projects
NITI Aayog
Formulates UEW Policy
Ministry of Finance : Notifies UEW Policy, Creates security basket of
$ 100 Billion worth PSU shares to reduce coupon rates on bond issues
and appoints Consortium of Banks to handle International offering
Consortium of Indian
Banks issues Bonds
Govt Share of Public Sector Company
Stock worth US $ 100 Billion pledged as
Security to lower Bond Rate
Financing plan carries No Risk … As these are physical asset backed securities with proper
market value. Govt. gets committed to a Urban Equity Withdrawal programme for 15 years, But
sticks to its Fiscal Responsibility Agenda
100 % issue to International investors, Sovereign Wealth Funds etc
Three UEW Asset Classes worth US $ 1.25 Trillion
Indian Investors
80 %
20 %
Asset Sale
$50Billion
Security
Fifteen such transactions of
US $ 50 Billion each … planned
over next 15 years to raise a
total of US $ 1250 Billion
Selected
Project Assets & Developers
4
3
1
2
7
8
9
11a
11b
Prime Ministers Office
Private Sector Project
Developers
Bidding Rounds
5
10
Establishes
LPA
6
LAND APPRECIATION TAX ( LAT )
LAT
12
$50Billion
+Interest
After Construction
Project Sale / 60 Year lease

21
Creating A Large Projects Office Under the PMO … Execution Focused Machine
To start up a Large Investment Cycle in India, Govt. needs to set up a
Large Projects Office directly under the PMO.
The British Govt. has such an office which reports directly to the
Prime Minister Teresa May. This office has :
 A mandate and bandwidth of manage 200 Large projects with a
total life cycle cost of 500 Billion Pounds Sterling.
 A staff of over 200 Project Execution Experts, Finance &
Commercial Specialists from the Private Sector … from the UK
and Abroad
 This office, which is based in London does not execute projects
itself but coordinates with thousands of people across Govt.
departments in the UK , to ensure project targets are met.
Learnings for India :
 The Govt. of India needs to set up a Similar office under the
Indian Prime Minister’s Office to execute 200 Large projects with
a Capex of between US $ 500 - 750 Billion
 Similar offices need to be set up in each state directly reporting
to the Chief Ministers
Large Projects Office Under PMO … Will be an Execution
Focused Machine Coordinating the Work of 50,000
Personnel across Government Departments
Source :
https://www.gov.uk/government/organisations/infrastructure-and-projects-authority
British Prime
Minister
Teresa May
Tony Meggs, CEO

22
Projects Which Will Become Possible

23
Gutted Strand Warehouse ( 2018 )
Victoria Jute Factory
Hoogly River
Waterfront
Derilict Andaman Docks
Rajabahan Docks
Babu Ghat Liquids Jetty
Andaman Docks Khidirpur
Kolkata Port & Waterfront
… Status ( March 2018 )
2500 + Acres of Neglected Opportunity
Khidirpur Dry Docks
Possible Project No.1 … Kolkata Port Re-development

24
Kolkata Trading Hub Convention Centre
The New Hoogly Business District
Kolkata Cruise Terminal
Kolkata Central Park
Kolkata Bird Park
Kolkata Business District
Kolkata Water World
New University Campus
Kolkata Port Re-development … On Completion ( 2027 )

25
Mumbai Eastern Waterfront
Status ( Dec ‘ 2018 )
Badly Maintained Roads
Derelict Ship Servicing Facilities
Cars Rusting in Yard
Derelict Wadi Bunder
Railway Yard
Fosbery Road
Closed Factories & Warehouses
Haji Bunder, Sewri
Wadi Bunder, Unused ShedsMumbai Port Trust
Land in Sewri
Mumbai Port, Ship Repair Site
Darukhana, Sewri
Possible Project No 2 … Mumbai Port Re-development
850 + Acres of Neglected
Opportunity

26
Mumbai Island
Separation
Mumbai Luxury Liner Port ( Phase II )
Completion
Supertall Building
Mumbai Tube
Train
Mumbai East – Central Park
18 Km Long X 400 Mts wide
park
Mumbai Mega
Convention Centre
Island Infrastructure Water World
Mass Housing
Project
Mumbai Eastern Waterfront … On Completion ( 2027 )

27
Mumbai Port Re-Development … Will provide resources for development of rural Maharashtra
Urban Equity Withdrawal ( Mumbai Port Re-development Example ) … Sharing Wealth to Rural Areas
Mumbai Port Re-development
Re-Development Project
 The proposal if accepted will vastly expand the
resources available to the Govt. of India
 Possible deployment … mass education & healthcare,
clean energy and rural development
 Lets demonstrate this with an Example :
Urban Equity Withdrawal … The Rise of All
Proposed Location of 2000 MW
Offshore Wind Turbine Facility
Pink area is 2000 Acre Reclamation

28
1. 60,000 Check Dam Project 2. Building Hospitals & Schools 3. 2000 MW Offshore Wind Farm
 The 60,000 Check Dam Project Will :
 Raise water tables in 7 – 8 years
 Create over 6,00,000 New Jobs in rural
areas
 Improve rural prosperity
 Prevent migration to cities in Maharashtra
and the growth of slums there
60,000 Check Dams @ Rs 20 Lakhs / dam = Rs
12,000 Crores
Problem : Water tables in Vidarbha and
Marathwada have fallen from 125 Ft … to 900 Ft
 Education & Healthcare Projects :
 2000 New Secondary Schools in rural areas
 300 New Hospitals at / below taluka level
 6 New Universities in Rural Maharashtra
 12 New Eco Towns in Tribal Areas
 Strategic Equity Financing for Rural
Infrastructure ( Rs 48,000 Crores )
 Renewable Energy Project :
 Govt of India Target for Solar &
Wind Energy Projects = 175 GW
by 2022
 It is proposed to build a 2000 MW
offshore wind farm along the
Maharashtra or Gujarat Coasts
 Economies of Scale will reduce
Project cost
Mumbai Port Re-development … Possible Rural Development Projects that could be financed

29
Investment Multiplier Impacts … Mumbai Port Re-Development ( Example )
 Investment Multiplier Impacts … Mumbai Port Re – Development ( Including 2000 Acre Reclamation )
 Total Outlay : US $ 45 Billion
 New Job Creation : During Construction : 3,00,000 ( Starting H2, 2021 )
+ Rural Maharashtra : 6,00,000 ( Additional )
 Investment Multiplier : US $ 135 Billion
Impact
For Mumbai Port + Extended Eastern Waterfront alone … Investment Multipliers are Huge

30
Kolkata & Mumbai Port Re-developments are two BIG Projects … in Metro Cities
But there will be Hundreds of Smaller Projects in smaller Indian cities

31
Sarvodaya Concept … Sharing wealth with Farmers / Urban Poor
Dubai & China Model
Thinking behind This
Budget Proposal
Cash released from these projects will Spread Wealth across Urban & Rural India… through Mass Education & Healthcare Projects
Very few
people
benefit From
Project
Central Development Concept
Sarvodaya : “ The Rise Of All ”
The Natarja Foundation

32
What will Success Look Like ?
This budget proposal can be expected to have a HUGE impact across
various sectors of the Indian Economy :
 By 2027, India could emerge as the Worlds Largest Construction
Market with the worlds largest construction companies coming here
to build Multi – Billion dollar projects.
 India’s Manufacturing Sector could be the biggest winner with the
domestic construction sector being its largest customer … Providing
a Huge Boost to “ Make in India ”. Dependence on Exports will
reduce significantly in an uncertain global economy
 This budget proposal could result in over 65 Million New Jobs being
created in the Construction and Manufacturing Sectors by 2025
 The Indian Banking Sector is likely to see massive growth with
additional fee based business in the range of US $ 3.0 – 4.0 Billion
each year ( Arranger fees )
 Skills Training Business : Construction Skills Training is likely to be
the biggest skills business in India with Millions of young people
being trained in the latest construction techniques.
 Rural development : Especially at the Taluka level and below. Huge
new funding once value trapped in Indian Cities is Un-locked

About the Designer
Ashish Puntambekar is a trustee of the Nataraja Foundation and heads its Design Lab. He has over 25 years of experience working with some of the finest talent globally in the
Energy and Infrastructure sectors and specifically in the area of large Infrastructure project design and design thinking where he is a specialist.
He has been Lead Designer for the Defence Industrial Corridor ( DIC ) project which has recently received an investment commitment of Rs 40,000 Crores from the Govt of India
in the Feb, 2018 union budget. The Prime Minister has personally launched this massive Defence equipment manufacturing project and two large DICs will now to be built at
Bundelkhand and along the Chennai – Bangalore route in project mode. Likely commissioning date of both DIC’s is Jan ‘ 2027.
Besides the Defence project, he has recently been the convener of an International Advisory Board ( IAB ) with Harvard Economists, Former G – 7 Finance Ministers, Foreign
Ambassadors and Defence Analysts as members. His expertise in the Geopolitics of Petroleum, his deep understanding of Middle East history and politics and his knowledge of
technology shifts in the Energy Industry have earned him a name in the energy analyst community internationally. He is also an expert invitee at the Asian Development Bank (
ADB ) where his work on Urban Equity Withdrawal based financing has been presented. He has also been an invitee speaker on TEDx to talk about ideas that can triple the size of
the Indian economy by 2030-32. Apart from this he has written articles on Geopolitics, Energy Security & Military - Industrial strategy for the Indian Defence Review magazine.
Ashish has worked in a number of diverse roles. He started his career as a project engineer working in a large petrochemicals complex and then moved on to various increasingly
senior engineering, business and senior management positions on assignments involving Power plants , Ports, LNG Terminals , Oil Refineries and Pipelines. He has also worked
as an Energy Derivatives Trader for a period of 5 years where he has traded crude oil flat price and petroleum product derivatives on all major commodity exchanges and OTC
Markets / Investment banks around the world.
Over the years, he has designed several multi billion dollar projects which are under active consideration by the Indian Government :
1. The Defence Industrial Corridor Project
2. The Vivekanand Secondary Education & Skills Development Megaproject
3. The Indian East Coast Energy Corridor Project
4. The Mumbai Megaproject – Eastern Waterfront and Artificial Islands
5. The Indian Healthcare Megaproject ( Under development )
6. The Ganges River Basin Re-Juvenation Megaproject ( Under development )
Strategic Objective : Ashish is the initiator and founder of the Construct India Mission which has received official sponsorship from the Ministry of Commerce, Govt. of India.
Through his work and ideas the author seeks to make India the worlds largest construction market. The focus therefore is not just on robust project design, but also on financial
innovation which is critical to bring these large projects to life … and in the process create approx. 65 Million New Jobs in India by 2027.
Of all the projects he has written, the Vivekanand Secondary education and skill development project is his flagship and favourite project. This is the project that can transform not
just India, but the whole of South Asia through its broad and expansively tolerant philosophy which comes from Swami Vivekanand.
Ashish has a bachelors degree in Mechanical Engineering and a Masters degree in International Business.

34
Thank You For Your Attention
Ashish Puntambekar
The Nataraja Foundation
www.nataraja.org.in
A – 2, Dattaguru
Deonar Village Road
Deonar, Mumbai – 400088
Ph : 91- 22-27707623, 07045414679
Email : ashish.puntambekar@gmail.com
nataraja.Foundation@gmail.com

Budget proposal 2019_New_Urban_Land_Policy_and_Land_Appreciation_Tax_with_three_sources_of_large_untapped_capital

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to Budget proposal 2019_New_Urban_Land_Policy_and_Land_Appreciation_Tax_with_three_sources_of_large_untapped_capital

Similar to Budget proposal 2019_New_Urban_Land_Policy_and_Land_Appreciation_Tax_with_three_sources_of_large_untapped_capital (20)

More from Ashish Puntambekar

More from Ashish Puntambekar (20)

Recently uploaded

Recently uploaded (20)

Budget proposal 2019_New_Urban_Land_Policy_and_Land_Appreciation_Tax_with_three_sources_of_large_untapped_capital