The Punjab Local Bodies Department is facing serious allegations of bureaucratic inaction and political shielding after failing to implement significantly increased development charges for nearly six months, despite a clear government notification issued in June 2025. This delay has triggered accusations of an open-ended favor to influential builders operating within municipal limits while costing the cash-strapped state government crores in potential revenue.
Six-Month Delay Sparks Controversy
The Housing & Urban Development Department had officially notified the revised charges for Change of Land Use (CLU), External Development Charges (EDC), and Licence/Permission Fee (LF/PF) on June 4, 2025, with the notification published in the Punjab Government Gazette on June 6, 2025. The revised charges were meant to apply to all new real estate projects across Punjab and extensions of ongoing projects.
However, the Local Bodies Department has not enforced these increased rates within municipal areas, creating a significant policy gap and revenue loss. When contacted for comments, Local Bodies Minister Dr Ravjot Singh did not respond to inquiries about the implementation delay.
GMADA Region Bears the Brunt of Increases
The Greater Mohali Area Development Authority (GMADA) region has been the most severely affected by the fee revisions, particularly in master plan areas including SAS Nagar, Zirakpur, Mullanpur, Kharar, and Dera Bassi. The impact is most pronounced for Group Housing (Residential) and commercial projects.
According to the revised 2025 charges, Group Housing EDC in the SAS Nagar/GMADA zone skyrocketed to Rs 308.25 lakh per gross acre from the previous Rs 87 lakh. Commercial EDC in the same area jumped to Rs 212.59 lakh per acre from Rs 60 lakh, representing one of the highest slabs in Punjab.
Similarly dramatic increases were seen across other charges. The LF Public PF for commercial projects in SAS Nagar/GMADA zone rose to Rs 146.15 lakh from just Rs 3.75 lakh, while CLU charges increased from Rs 7.50-10.50 lakh to Rs 79.72-106.29 lakh.
Two-Tier System Creates Unfair Advantage
The implementation delay has created an uneven playing field where developers operating outside municipal limits are paying the new, higher charges while those within municipal boundaries continue under the old regime. This discrepancy has raised eyebrows in administrative circles and among developers who are complying with the revised fees.
Developers in non-municipal areas of GMADA have confirmed they have been paying the hefty new charges since the notification was issued, while builders operating under municipal limits of Zirakpur, Kharar, and Dera Bassi continue to save crores of rupees by paying older, significantly lower rates.
According to officials familiar with the real estate ecosystem, some influential developers have been actively lobbying to delay the enforcement, citing technical alignment issues between the Housing and Local Bodies departments. This has resulted in a situation where projects merely a few hundred meters apart face drastically different charge structures.
A coloniser familiar with the matter highlighted the absurdity: Projects falling merely a few hundred metres apart, one under GMADA and another under municipal limit, are being charged drastically different rates, creating what many call a policy failure and a revenue loss for an already cash-strapped state government.
Significant Revenue Loss for Punjab
Sources within the Housing and Urban Development Department reveal that between 15 to 25 colony licenses have been granted within municipal limits from June to date—all at pre-hiked rates that were originally defined in June 2017. This represents a substantial loss of crores of rupees in potential state revenue.
A senior officer in the Punjab Housing Department expressed concern about the financial impact, noting that developers are securing approvals at significantly lower costs while the state government faces a revenue crunch. The situation has also created a widening gap between municipal and non-municipal real estate development costs.
Officials fear that earlier applicants may now rush to seek backdated approvals or freeze their projects before the new rates are eventually enforced, potentially exacerbating the revenue loss.
An anonymous Housing Department official stated bluntly: The notification is crystal clear and applicable to the entire Punjab, June 6 onwards, but the Local Bodies Department has not implemented it. This is not an administrative delay. This is deliberate, even as Punjab is facing a revenue crunch and cannot afford such a leak in revenue to benefit some people.
Another senior officer emphasized the purpose behind the increased fee structure: The higher CLU/EDC/LF structure was meant to shore up resources for infrastructure and urban development, but the implementation was stuck. The government's silence only deepens suspicion.
The officer added that it remains unclear whether Punjab Chief Minister Bhagwant Mann has been briefed about the delay or if corrective measures are being planned. Despite repeated reminders and file movements within departments, no action has been taken to implement the notified charges.
If the delay continues for a full year, the state could easily lose several crores of rupees, with a few powerful groups operating under municipal limits standing to gain enormously from the continued non-enforcement.
