Speakers reflected on various aspects of rent control regulation, and was  followed by  a lively  discussion, at  times  generating passionate responses  from  the  hundred  strong  audience  which
included representatives of landlord and tenant organizations.

The panelists  included Mr.  Sauvik Chakraverti, a commentator on current affairs;  Mr. Barun S. Mitra of Liberty Institute; Mr. P. K. Khanna  of New  Delhi Traders  Association; Dr. (Mrs.)  Kiran Wadhwa,  Senior   Economist  at  Housing  and  Urban  Development Corporation; Mr.  Chitaranjan Kapur,  advocate  and  real  estate consultant for  The Pioneer newspaper; and Mr. S. Banerjee, Joint Secretary in  the  Ministry  of  Urban  Affairs  and  Employment, Government of India.

Mr. Jagdish  Sharma, President  of ISPA,  who chaired the meeting and initiated the discussion, said that the issue of rent control needed to  be viewed in a larger perspective of urban development
rather than  a mere  conflict of  interest  between  tenants  and landlords.

Mr. Sauvik  Chakraverti   elaborated  on   the   history   of   urban development. He highlighted the rise of civilizations through the cities as  these were the centres of trade, commerce and culture.
He outlined how rent control distorts urban development and leads to the growth of urban slums. Rent control has, not only, knocked out the  housing market, but also severely affected the municipal revenue as  property tax  is linked  to rent.  He said  that  the problem was aggravated by public investment in housing apparently to offset  the lack  of private  investment. He  concluded that a
rental market  in low  cost housing  would emerge if rent control and land ceiling laws were to go.

Mr. Barun Mitra  pointed out  that despite the good intentions of the originators of  rent control  legislations, whose  avowed purpose were to  make housing  affordable, the experience from around the world was  quite the opposite.  As was noted by Assar Lindbeck in 1971, "Rent  control seems in many cases to be the most efficient technique, next  to bombing, so far known for destroying cities." Mitra gave  a brief  account of experiences of countries in North America,  Europe,   Asia,  where   urban  development  have  been throttled by laws such as rent control, zoning, and land ceiling. He listed  some of  the "unintended consequences" of rent control -- worsening  housing shortages,  deterioration of housing stock, impeding mobility  of labour, increasing lanlord-tenant disputes, rise of  the urban property mafia and criminalisation, congestion on the  roads and pollution due to increased travel requirements, falling revenue for the civic authority, etc.

Speaking about the Delhi Rent Act 1995, Mitra said that while the Act is  an improvement  on the  existing legislation, it fell far short of  what was  required. The  fact that a law enacted by the
Parliament and  signed by the President in 1995, has not yet been implemented  by   the  Government,   also  brings  to  light  the arbitrariness and unaccountability that plague the functioning of the executive in this country.

Mr. K.  P.   Khanna,  speaking  on  behalf  of  one  of  the  tenants organizations, wondered  how the  new rent  Act which favours the landlords and  facilitates eviction of old tenants, could lead to
an increase  in the  supply of  housing.   He admitted  that  the current law  had some  bad features,  for instance restriction on sale or  transfer of  commercial properties,  which  has  led  to
growth in  "pugree". (Pugree  is the  illegal institution  of one time lumpsum  payment to the landlord by the tenant, primarily to offset the  low rents.  This  is  one  of  the  major  source  of
generation of  black money  in India.) Therefore, he said that by accepting pugree  and knowing  fully well  that he cannot get the premise vacated again, the landlord had de facto sold his premise
to  the   tenant.  This   also  suited   the  commercial  tenant, particularly the  shopkeepers and  traders, who then felt free to invest his  energy in  building the reputation of his business in
the neighbourhood.  Ease of  eviction and  limited inheritability are two  feature that  would ruin small traders in old commercial areas. He  claimed that  if implemented, the new law will benefit
the multinationals  and large  companies at  the expense  of  the local trading communities.

Dr. (Mrs.)  Kiran Wadhwa  of gave  a   brief account of how rent control regulations  were first moved in a big way by the British in India  during second  World War as a temporary measure to deal with incresed demand for housing.  But since  then various state governments  extended and  adopted new  regulations to deal with special  situation first arising out of migrations triggered
by  partition   of   India,   and   then   that   influenced   by industrialisation.  So  though  intended  to  deal  with  special conditions,   rent  control became a permanent feature. In Delhi at present  rent is  governed by  the 1958  Act as  amended up to 1988. However,  there has been a growing realization that the old Act has  failed to  take care  of housing problem in the capital, she felt.  It led  to a  decline in supply of rental housing, and made the  sale of  property difficult. She thought that while the question of  pugree, even  though illegal, should be looked in to sympathetically, this  didn't mean  that a  bad  law  had  to  be perpetuated. She concluded that the new Delhi Rent Act, 1995, was in greater  interest of  the city  and made  sound  economic  and political sense.  Similar modifications  in law  are  also  being sought by other state governments.

Later Mr.  S. Banerjee  appreciated  the  candour  in  which  the discussion was  held, but admitted that as a civil servant he was unable to  reciprocate. He  outlined the  basic objectives of the new Act:  balancing the  interest of  all sections, improving the stock of  rental housing,  and providing speedy justice through a special tribunal. Referring to the recommendations of all the All
Party  Committee,   he  said  these  pertained  to  deemed  rent, compulsory registration of tenancy, inheritability, eviction, and enhancement  of  rent.  The  government  he  said  was  carefully
considering the  various representations  received by it, and was working towards a solution acceptable to all.

Mr. Chitaranjan Kapur explained in detail many of the features of the 1995  Act. He  outlined the  graded increase in rent based on the size  of the  built up  area, the  18 specified  grounds  for
eviction  of  tenants,  the  restrictions  on  inheritance,  etc. Speaking about  the government's failure to notify the Act, after that Bill was passed unanimously by both houses of Parliament and
almost two  years after  it was  assented to by the President, he felt that  it was  a clear case of executive despotism.  However, the  Supreme  Court  on  a  similar  issue  had  held  that  "The
Parliament having  left to the unfettered judgment of the Central Government as  regards the time for bringing the provisions  .... into force,  it is  not for the Court to compel the Government to do that  which, according  to the  mandate of Parliament, lies in its discretion to do when it considers it opportune to do it. The Executive is responsible to the Parliament, and if the Parliament considers that  the Executive  has  betrayed  its  trust  by  not bringing .....  into  force,  it  can  censure  the  Government." Therefore, although  there were  cases pending  before the  Delhi High Court  on non-implementation  of Delhi  Rent Act  1995,  Mr.Kapur felt, the Executive is on surer ground.

Earlier Mr.  Barun Mitra  on behalf  of Liberty Institute and Mr. Arshad Fehmi  on behalf of ISPA, briefly recounted the activities of the two organizations.

Liberty Institute  also set  up a  table displaying  a  range  of literature on  rent control  and urban  housing situation in India and other parts of the World. It had compiled a  selected bibliography  of literature  from around the world on  this issue,  and selected  housing statistics depicting the quality of housing in India today.

On sale were a few copies of Rent Control: Myths and Realities, edited by  Walter Block  and Edgar Olsen, originally published by the Fraser  Institute, Vancouver,   Canada,  in 1981.  Among  the contributors were  F.  A.  Hayek,  Milton  Friedman,  and  George Stigler. The  book has  been out  of print for some time, but the Fraser Institute  had kindly  permitted the  Liberty Institute to reproduce a  few copies  of the book in India. Copies of the book were presented to the panelists at the end of the discussion.
 
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