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Podcast: The responsibility of EDC and IDC – The buck should stop

Santosh Sinha & Saket Pathak

While buying a property or during the research phase, everyone would have come across the terms like EDC and IDC. Many would know their full forms as well but they would also know what they are and under whose responsibility them come if is a matter of doubt.

You would think why we are discussing it today. Well, in an interesting development the NCR chapter of CREDAI has alleged that Gurgaon authorities are misusing their position and are forcing the developers to sign a one-sided agreement where the developers will have to pay the External Development Charges and Infrastructure Development Charges to the authority without fail but the authorities have kept themselves away from any responsibility to do the development against those charges.

CREDAI approached the Competition Commission of India and CCI has put up an investigation against Haryana Urban Development Authority and Department of Country and Town Planning, Gurgaon to find out the reality.

What will come out of CCI’s investigation is another matter but the harsh reality is that the buyers are constantly paying these charges but are still deprived of basic amenities.

On an average, a buyer pays around Rs 200 to Rs 400 per sq ft or in the tune of 15% to 20% of the total unit cost as EDC and IDC cost to the developer. These charges are then supposed to be used in the development of roads and road systems, landscaping, water supply, sewage and drainage systems, electricity supply, transformer, sub-station, solid waste management and disposal or any other work that may have to be done within the periphery of, or outside a project for its benefit, as may be provided under the local laws.

So on a broader note, a buyer, before shifting to his home, has already paid for all the infrastructure that he would use. Unfortunately, there are many cases evident where no such development has been carried out even after full payment of the charges by the buyers.

Developers and authorities keep passing the buck to each other and ultimately the buyer bears the pain. Many housing societies in Faridabad, Ghaziabad, Greater Noida, Gurgaon and other parts of Delhi NCR region are yet to witness these developments.

We hope the CCI comes out with some solution to this problem and bring a much needed respite to the buyers at large.

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