Transferable land rights certificates in demat format

CHENNAI: The Tamil Nadu government is looking at converting Transferrable Development Rights certificates into dematerialisation (Demat) format so as to make it secure and also enable them to be traded in the exchange.

TDRs are governed under development regulations wherein the land could be acquired for road widening and for any other project approved by government. Under this, the land owner will be provided with development rights certificate by planning authorities which will be in incentives in terms of floor space index to the land owner and can be used in the same site or in different site or can be sold to others. 

It is learnt that the State government is seeking advice from National Housing Bank on suggesting agencies or organisations that can help study and suggest various procedures involved in Demat process.
“We are initially working on dematerialised form for security reasons. Even now TDR is tradeable. Exchange is the eventual plan to enable liquidity, but that will take some time,” he said. A top Chennai

Metropolitan Development Authority official told Express, “Since TDR is based on guideline value, we are trying to make it secure digitally rather than being a mere paper.”
He also said CMDA has asked Tamil Nadu Urban Infrastructure Financial Service Limited to appoint a consultant to prepare a detailed project report to convert TDR into Demat format.

This comes after Tamil Nadu government amended Tamil Nadu Town and Country Planning Act by introducing an additional provision for TDRs to make them legally binding. The State government amended Section 35 of the Act wherein the clause pertaining to TDRs was included. Initially, the government had framed rules for implementing TDRs, but it did not have statutory backing.

TDR, which first emerged as a policy in United States in 1960s, was implemented in the State by creating a separate TDR division in CMDA. However, without legal backing and infrastructure and a common platform to trade TDRs, it had few takers forcing the government to rethink on the feasibility of having a separate TDR department in CMDA.

no more papers

• To mitigate the risks associated with shares in paper format, dematerialisation concept was introduced 
• Dematerialisation or Demat in short is the process through which an investor’s physical share certificate gets converted to electronic format which is maintained in an account with the Depository Participant
• Transferrable Development Rights allow governments to acquire land in exchange for development rights.
• These rights allow for properties or land to be developed in other areas of the city and those having TDRs can use the rights themselves or sell it to developers.
• TN has asked TNUIFSL to appoint consultant to prepare DPR for conversion