Report of the State-level Committee to recommend a policy framework for the Chandigarh Periphery Controlled Area and regulating constructions therein.  


1.1    The Chandigarh Periphery Controlled area was created with the twin objectives of ensuring a planned future expansion of the New Capital City and to prevent mushrooming of unplanned construction around it. The Punjab New Capital (Periphery) Control act, 1952 accordingly aimed at regulating the use of land and preventing unauthorized and unplanned urbanization in a 16 kilometre periphery.

1.2    Since then, planned satellite townships of SAS Nagar (Mohali) and Panchkula have come up in the Periphery in addition to a large cantonment. Further in 1990, the State Government declared an area of 10,000 Acres near Dera Bassi, falling within 23 villages of Patiala district, to be a Free Enterprise Zone (FEZ), where the setting up of industries was to be permitted.

1.3    Notwithstanding the regulatory framework, enforcement has been patchy. Appreciating the emerging ground realities, the Punjab Government had in 1998 decided to permit an across-the-board regularization of all unauthorized constructions, which had already come up within the Periphery up to and including 7.12.1998. Simultaneously, it was also decided to evolve a policy framework which would permit the setting up of institutions related to education, health etc., with low density of built-up area, within the Periphery, apart from permitting activities related to leisure and tourism.


2.1    Accordingly, a Committee headed by the Chief Secretary was constituted by the State Government in its order of September 10, 2003 to suggest an appropriate and transparent policy framework for the Periphery.

2.2    Taking cognizance of this Committee, the Hon’ble Punjab and Haryana High Court in Civil Writ Petition No. 14357 of 2002 directed:

(i)               that the Committee should critically examine the problems and bottlenecks in the proper development of Periphery and to suggest a policy framework which would ensure planned development of the area;

(ii)            that the issue of regularization of unauthorised constructions which have already come up in Periphery should also be examined by this Committee;

(iii)          that on the basis of the recommendations made by the Committee the State Government shall take a decision whether or not to regularize such constructions;

(iv)          that the State Government shall also examine the reasons for the coming up of unauthorized constructions, rationale for their regularizing and steps to stop such construction in future including imposition of exemplary fine and setting up of Special Courts to deal with such illegal constructions;

(v)             to fix responsibility of the officers/employees responsible for abetting such constructions and setting up a Tribunal headed by a retired Judge of the High Court to deal with the cases of illegal constructions.

2.3    Further, in Civil Writ Petition No. 7187 of 2003 the Hon’ble Punjab and Haryana High Court has also sought the views of the State of Punjab about extending the abadi deh area/lal lakir of the villages in Periphery, and this issue was also referred to the Committee.


3.1    The Committee held numerous meetings and also formally obtained the comments of relevant Departments of the Government such as Revenue, Industries, Housing and Urban Development and Local Government. Views of the public at large were also sought through placement of advertisements in news papers to which there was considerable response.

3.2    At the outset the Committee observed that it was first necessary to take into account the changing character of the city of Chandigarh. It was seen in this context that the city was initially conceived as the capital of post partition Punjab and its planning by and large reflected the needs thereof. Over time, however, Chandigarh is not only the administrative capital of two State Governments and a Union Territory but also an important commercial and institutional hub which houses the regional offices of Companies and Institutions catering to several States in the northern region. It has also become an important investment destination for Indian and multinational Companies. The changed character of the city has put considerable pressure on housing and social infrastructure, which was not initially catered for. There is also increased need for connectivity and the provision of civic amenities. A special mention needs to be made of a large population of the city, which is unable to afford housing on account of its very high cost and has gravitated into the villages in the immediate vicinity of the city as well as several unplanned and unauthorized new colonies. It is in this backdrop that a fresh look has to be taken of the regulatory framework that governs the areas immediately surrounding the city of Chandigarh so that the future needs of the city can be adequately catered for in a planned manner.

3.3    It is also necessary to take note of the fact that even with all difficulties being faced, Chandigarh is still one of the more liveable cities in the northern region. With its close proximity and easy connectivity to the national capital, it has also become an attractive investment destination. It would, in the view of the Committee, not be realistic for any State Government not to take advantage of this opportunity and leverage its proximity to Chandigarh to its best economic interest. Thus, industrial promotion in the vicinity of Chandigarh has also to be envisaged and provided for.

3.4    In the light of the issues brought out in the foregoing paragraphs, the broad policy framework within which the Committee approached the entire issue of controlling the periphery of Chandigarh are enumerated below:-

a)     Housing for the increasing population of the city is perhaps the most urgent requirement that has to be provided for. In that context, a realistic view has to be taken of existing unauthorized structures. Policy also needs to cater for the normal growth of village populations as well as migration from outside specially of persons from economically weaker sections.

b)     It is necessary also to take into account the increased attraction of the city and its environment as in investment destination.

c)      Catering for further growth would involve heavy investment in road connectivity, provision of civic amenities, electricity, water supply and sewerage. Accordingly, it was considered desirable that the overall policy framework should also generate adequate resources for the provision of such facilities. A multidisciplinary sub group was asked to advise on the imposition of such charges after studying the existing pattern in neighbouring State of Haryana.

d)     The Committee noted the wide disparity between the level of civic and urban infrastructure in the city and its surrounding towns and villages. Accordingly, the available resources needed to be suitably deployed to ensure balanced growth. Such resources, it was felt, could also be raised and credited towards a dedicated fund which could be used for developing and upgrading basic infrastructure in the periphery area and specially for the settlements therein.

4.     RECOMMENDATIONS                   

Given the above approach and considering the ground realities, existing status of the Periphery, emerging problems of unregulated and unauthorised development, need for promoting planned development and eliminating unauthorised and illegal constructions, the Committee, proposes to address various issues on the following lines:-

(a)    Periphery Controlled Area Plan

In order to meet the emerging needs of population growth, promote planned and systematic development of the entire area and to check haphazard, unregulated and unplanned development, the Committee suggests the preparation of a comprehensive Land Use Plan for the entire Periphery Controlled Area. Such a broad land use plan could provide for urbanisable zones, industrial parks, institutional and residential areas where such development could be taken up while also highlighting the trunk services and infrastructure to support such development. It should also highlight the sub-areas which need to be preserved and conserved in order to effectively protect the quality of environment and ecology in the Periphery. However, until such a Plan becomes final in statutory terms, change of land use may be permitted as in interim measure, by the State Government in accordance with other specific recommendations of this Committee. This plan needs to be put in place in the shortest possible time frame as that would then provide the framework for future growth based on well established principles of town and area planning. To implement a plan of this magnitude, it would be advisable to consider setting up of an independent Statutory Authority with a dedicated initial corpus and full administrative, financial and planning autonomy.

(b)    Housing Schemes in the Periphery

With only limited planned urban areas available in the cities of Chandigarh, SAS Nagar and Panchkula and the growing demand for housing, it was noted that those who could not afford shelter in these urban areas, found place on the fringes of the city, usually in the adjoining settlements/villages, inside or outside the Abadi areas in an unauthorized manner. Considering the above situation, it is proposed that suitable pockets for Housing/Residential use in the Periphery area be earmarked which can be developed by the Private parties or Government/Semi-Government Agencies. While permitting such development, it must be ensured that adequate provisions are made for public utilities/facilities and services. Special care must be taken to ensure that housing needs of the economically weaker sections are catered for in adequate measure. Detailed policy prescriptions in this respect are at Annexure ‘A’.

(c)    Unauthorized Constructions

The Hon’ble High Court in its orders in CWP No. 14357 of 2002 had tasked the Committee to examine the issue of regularization of unauthorized constructions and also desired it to examine the need to set up a Tribunal to deal with cases of illegal constructions, besides suggesting imposition of exemplary fines to stop such constructions in future. The issue relating to unauthorized constructions were discussed in detail. In the absence of any detailed formal survey, a broad figure of about 1500 constructions was estimated based on the number of notices issued by PUDA’s Regulatory Wing since 8.12.1998, the date till which all the previous constructions had been regularized.   With a view to preventing large-scale demolitions and consequential human problems, the Committee recommends a strictly one time regularisation of unauthorised constructions, adopting, however, a well defined and selective approach restricting it only to small/medium residential and petty commercial constructions.

The Committee recommends that such regularization, with a cut-off date should involve the imposition of reasonable composition fees and land-use conversion “charges” on a pre-defined scale, which may be pegged at a lower rates for smaller plots. Large residential units could be considered for regularisation in accordance with the policy proposed for farmhouses. Alternatively, such units could be regularized on imposition of substantively higher composition fee. No regularization would be allowed in any case where the construction interferes with the provision of trunk infrastructure. However, no such regularization should be permitted in areas prohibited for development by virtue of being covered under the Indian Forest Act, 1927, the Forest Conservation Act, 1980 or the Punjab Land Preservation Act, 1900 or in areas where construction is not permitted under any other law. To avoid any misuse of such regularisation, the committee proposes to fix the cut off date with slight retrospective effect like 1st November, 2005.

The Committee feels that the problem of unauthorized constructions needs to be addressed by constant and effective vigil, for which the field officers like Sub Divisional Magistrates and their staff besides PUDA officers need to be fully involved and held accountable.  Clear administrative guidelines need to be put in place bringing out the staff who is to be responsible for detecting illegal construction, taking legal action and enforcing the same. Statutory powers of the Deputy Commissioner under the Periphery Act to carry out demolitions could also be delegated to designated officers (e.g. SDMs). A dedicated field enforcement machinery within PUDA or in the Department of Town and Country Planning also needs to be created so that the demolition orders are implemented in letter and spirit and, more importantly, mushrooming of illegal constructions is nipped in the bud. Suitable amendments in the Act may also be made to vest the Deputy Commissioners with statutory powers to issue injunctions against unauthorized construction, in addition to the existing powers to demolish such constructions. It is further suggested that the Act be amended so as to provide a fine which may extend up to Rs.50,000/- instead of Rs.5,000/- presently and in case of continued violation, with a fine of Rs.5,000/- per day instead of the present rate of Rs.500/-. Regular monitoring of progress in respect of tackling unauthorized construction cannot be overemphasised. It is felt that at least a quarterly review needs to be undertaken at Government level.

The Committee is of the view that in case the proposals in the above paragraph are operationalized, there may not be any necessity to set up the Special Tribunal to deal with cases of unauthorized construction. However, the credibility of a sustained campaign in this respect would depend critically on the fairness of the process. Towards that end, the setting up of an Ombudsman could be thought of who would oversee the entire process, entertain complaints from citizens and is empowered to give directions to the concerned authorities. The Ombudsman would have to be vested with suitable powers but care needs, at the same time, to ensure that there is no intervention in matter relating to the hearing of cases and the execution of orders passed by the Competent Authority.

(d)    Institutions           

Considering the fact that Chandigarh and SAS Nagar are emerging as fast-developing nodes, it is natural that institutions with larger land requirements would tend to get located here. In addition, the area is becoming ripe for establishing sports, recreation, leisure and tourism-related activities.  The Committee feels that such institutions and activities, which have requirement of large open/vacant land area but smaller built-up area, can be considered for location within the entire Periphery. Accordingly, it would be appropriate to consider the option of locating such activities within the Periphery, subject to detailed guidelines, land and development norms being put in place, which are brought out in the detailed guidelines placed at Annexure-B.   

                (e)    Free Enterprise Zone

          (i)     Free Enterprise Zone:

The area declared as Free Enterprise Zone (FEZ) near Dera Bassi should continue to be used for industries, although institutions could also be permitted in accordance with the prescribed guidelines. In order to ensure rational development and provision of basic infrastructure and services in the area, a broad developmental framework needs to be prepared along with a development plan indicating roads/trunk infrastructure, including areas reserved for residential and institutional needs. There shall be no conversion/betterment charge for the new industrial units coming up in the FEZ. However, these shall be liable to pay the External Development Charges.

(ii)    Industrial

Industrial Parks may also be permitted as “mega projects” in areas earmarked as industrial & residential for such uses respectively within the Outline Master Plan area of SAS Nagar (Mohali).

The Empowered Committee on Mega Projects has already permitted integrated mixed use Industrial Parks, where at least 60% of the land is used for industry, free of external development charges and change of land use charges in the periphery. This is a major policy incentive for making land available to industry at reasonable rates. In the Committee’s opinion such a policy may continue in respect of the industrial sectors in the Mohali sectoral grid and FEZ for general industry and for areas planned in Mohali’s Master Plan for IT Industry. The policy on grant of additional incentives to industry would, however, need to be periodically reviewed with a view to the continuation of such benefits.

(f)    Municipal Towns in Periphery

Committee recommends that the existing towns of Kharar, Banur, Zirakpur, Dera Bassi should continue to provide avenues for future growth and development by ensuring adequate supply of developed land for residential, commercial, institutional and industrial purposes. Master Plans of these Towns need to be prepared under the Punjab Regional and Town Planning & Development Act, 1995, within the overall ambit of the Controlled Area Plan.  Further expansion in the municipal limit of these towns has also to be regulated so that it conforms to the overall Development Plan for the Periphery Area. It is proposed that the future expansion of municipal limits of the existing Periphery towns should be frozen, until these Master Plans have been finally notified. Thereafter, if need arises, such expansion can be considered, strictly in accordance with the approved Master Plan subject, of course, to the payment of the conversion charges as are being proposed in the report. New Municipal Councils or Nagar Panchayats within the Periphery should be notified only after the overall Development Plan has been put in place.

 (g)   Existing Rural Settlements

        Considering the existing as well as future development needs of the villages falling within the Periphery as well as with a view to cater to their increasing population, it would be prudent to provide a sufficiently compact and contiguous belt of land around the village “phirni” for ensuring the organic growth of these villages. Any area falling between the ‘lal lakir’ and the ‘phirni’ of the village shall also be treated as a part of the extended belt. The area should be allowed to be used primarily for meeting individual residential and petty commercial needs of the existing and future population of a village. However, charges for change of land use should be levied on prescribed rates, except in the case of bonafide residents. No industry should be permitted in such area. Similarly, formal colonization shall also not be permitted in the extended ‘abadi’ area on the pretext of this recommendation alone.

With these caveats, the Committee proposes   to allow the village “Abadi” area extension by 60%, subject to a minimum of 50 metres and maximum of 100 metres in radial length from the ‘phirni’. However, where the exiting Abadi Deh or a part thereof is an area which forms a part of the rural/agriculture and afforestation zone of the Outline Master Plan/Draft Comprehensive Master Plan/Comprehensive Master Plan prepared under the Punjab Regional and Town Planning & Development Act, 1995, the extent of such area shall be limited to 50 metres. Permitting construction in the notified forest areas falling in these villages would, of course, be subject to due approval as regards change of land use. No permission should, however, be granted in any area which falls within the sectoral grid of SAS Nagar (Mohali), as reflected in the Outline Master Plan. The extent of area where such constructions are to be permitted will be demarcated and certified for each village falling within the Periphery by the Revenue Authorities, subject to the final approval of PUDA. In order to promote planned development, it is proposed that construction in the area should be regulated by a set of simple building norms, subject to payment of Land-Use conversion charges and in accordance with other details as contained in Annexure-C.  However, to avoid hardship to villagers and land owners, the area in the extended abadi deh shall be exempted from the provisions of the Punjab Apartment and Property Regulation Act, 1995.

(h)    Farmhouses

With a view to encouraging low-density development and to meet the basic residential demand of landowners in the area, Farmhouses were permitted as far back as 1966.  However, they could come up only beyond the 8-kilometre belt, in cases where land holding was more than 5 acres.  Keeping in view the high land values, it would be appropriate that the norms for Farmhouses are liberalised, with the area requirements brought down to 2.5 acres and construction being permitted within the 8 kilometre belt as well. However, the construction of Farmhouses should be regulated by guidelines as per Annexure-B.

(i)     Land-use Conversion Charge – Periphery Development Fund

As has been earlier observed, any optimal development of the Periphery has necessarily to be accompanied by considerable state-led investment in urban infrastructure. Similarly, the existing urban and rural settlements must also become beneficiaries in any resource-raising that might be leveraged through a system of granting land-use change permissions. It would be neither fair nor just to burden the State exchequer alone with the responsibility of funding such development works, without any concomitant additional resource mobilization. On the other hand, ignoring this aspect at the policy formulation stage would result in irretrievably losing the best opportunity for providing supporting infrastructure at optimal cost.

In view of this, the Committee suggests that conversion of land use and betterment charge should be imposed if need be through an amendment of the Periphery Act. The Committee recommends that there should be an in-built betterment charge applicable to lands abutting the road network within the conversion charge itself. This is fully justifiable because of the initial investment by the Government in the form of land acquisition and construction of National / State highways, Sector roads and other roads. Betterment charge could be in the form of a percentage premium over and above the conversion charge. These “charges” should be credited to the Government treasury and should be dedicated to the provisions and maintenance of physical infrastructure in the periphery. The Department of Housing and Urban Development in consultation with the Finance Department, may work out the administrative and legal details to manage this Fund. However, the model adopted by the State Government for regular release of Social Security pensions may serve as a useful prototype to ensure that receipts on account of this charge are released in the ordinary course of business to the nodal agency. The Governing Body of this Fund should be a high level body, headed preferably by the Chief Minister, and in addition to Ministers and the Administrative Secretaries concerned, may also have representation of the elected representatives like MLAs, Presidents of the Municipal Bodies and Panches/Sarpanches whose territorial jurisdiction falls within the Periphery. While the Governing Body would, no doubt, be in the best position to settle competing demands for resources, it is suggested that the first charge on this Fund should be the basic development works in the village from which revenue receipts arise. The imposition of a fair and optimal level of conversion charge is crucial to the success of this policy package which must be adequate to generate enough funds to finance creation of new roads and other physical and social infrastructure in the periphery area.

The multidisciplinary group has worked out the details of External Development Charges based on basic infrastructure requirements (Annexure D-II) which need to be put in place to provide facilities broadly comparable to Chandigarh. The scale of conversion charge is similar to the one being levied by Haryana Government in the satellite town of Panchkula. The Committee generally agrees with the scale of these charges including the licence fee proposed by the sub group           (Annexure D-I) as it provides a reasonable competitive edge to Mohali compared to the charges being levied in Panchkula (Annexure D-III). It is also worth mentioning that while suggesting the different charges, the differential between the permissible FARs between Mohali and Panchkula has been duly taken care of.

These charges are proposed for the outline Master Plan of Mohali and can be suitably adjusted for remaining areas of the Periphery. Such charges would, however, not be imposed when land is provided for public utilities and other services such as Government Schools, Dispensaries, Veterinary Centres, Post Offices, Police Stations and the like. The aforesaid conversion charges and other fees should be in addition to, and not in substitution of, the External Development Charges (EDC) that are payable within the framework of the Punjab Apartment and Property Regulation Act, 1995.

(j)            Total Repeal of the Periphery Act Not Recommended:

The Committee has received suggestions from different quarters to totally repeal the Periphery Act. In this context, attention is drawn to the changing character of the city of Chandigarh, alluded to in paragraph 3.2 of this report. This transition also necessitates a fresh look at the regulatory framework governing the Periphery. However, the Committee, even after due deliberation, is unable to recommend the total repeal of the Act, as it would remove all curbs on sub optimal construction and haphazard urban development in the Periphery.
            The Committee noted that the process of drawing up Master Plans in the State as a whole has yet to effectively take off and towards that end, the State Government is contemplating to amend the Town and Country Planning Act with a view to permitting quick finalization of such Plans. However, it will be several years before Master Plans would be in place and till then, it is necessary to have a legal framework effective in the Periphery of Chandigarh, which is currently provided by this Act. It would, therefore, be inadvisable to remove the legal umbrella, which is available to exercise control over land use till such time as detailed planning is put in place. The Committee has also separately suggested the imposition of EDC and conversion charges in reasonable measure with a view to generating resources for providing requisite infrastructure for urbanization which will and is inevitably taking place. It would not be possible to levy such charges if there is no umbrella legislation, which provides for it and in the absence of the levy of such charges planned growth in the Periphery area would not be possible. For all these reasons, the Committee is of the view that it would be inadvisable to repeal The Punjab New Capital (Periphery) Control Act, 1952.


        The Committee had to balance and optimise between divergent and often conflicting demands and requirements.  For instance, the purist view of freezing the Periphery as agricultural was contradictory to the very reasonable demand to allow for the expansion of the ‘abadi dehs’ or for permitting housing in a planned manner. Similarly, although institutions and leisure facilities have been recommended, the norms of FAR and built-up area, have been pegged on the lower side.

        Conversion charges were also deemed necessary to raise resources for the overall development of the Periphery, although the Committee was acutely conscious that it may add to overall project cost. While the Committee recommends strict compliance with the up-to-date Outline Master Plan of SAS Nagar, it also suggests the speedy formulation of an over-arching Periphery Development Plan for the entire region.  Nevertheless, pending finalization of the latter, the Committee recommends that limited change of land use may be permitted as per the recommendations contained in this Report. 

        Even though existing constructions have been proposed to be regularised on purely humanitarian grounds, the Committee has strongly recommended a zero tolerance enforcement and regulatory regime, in the post-Policy phase. However, enforcement of the regulatory regime would only be sustainable in the long run if total Area Planning of the Periphery is taken up in right earnest and brought to its logical conclusion at the earliest.

        The prescription proposed by the Committee is to be viewed as a comprehensive package, which needs to be comprehensively implemented.  The Committee sincerely hopes that it would have addressed the concerns of all the stakeholders in a judicious, balanced and practical manner.   It is now for the State Government to consider, approve and implement both the regulatory and development aspects of this policy in prescribed time frames. 

Chief Administrator, PUDA                   
      Secretary, Housing & Urban Dev.
(Member Secretary)                                      (Member)  

 Secretary, PWD (B&R)                                 Principal Secretary, Industries
(Member)                                                       (Member)  

Principal Secretary, Local Govt.               Financial Commissioner, Revenue
   (Member)                                                        (Member) 

                                                 Chief Secretary



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