Ahmedabad’s Impact Fee Law Sees Lukewarm Response: Deadline Extended by Six Months
In an effort to regularize unauthorized constructions across Ahmedabad, the Gujarat government revised and notified the new Impact Fee Law under the GRUDA Act 2022. However, nearly three years since its implementation, the response from property owners and developers has been underwhelming. With the application deadline originally set for June 17, 2025, the Ahmedabad Municipal Corporation (AMC) has now extended the deadline by six more months in a bid to boost participation.
Numbers Tell the Story
Between October 17, 2022 and May 19, 2025, AMC received a total of 75,973 applications from property owners seeking to regularize their illegal constructions. Out of these:
- 21,651 applications were approved
- 44,191 applications were rejected
- 10,102 applications are still pending review
The applications approved so far have generated a revenue of ₹258.28 crore for the municipal body. In contrast, under the 2011 Impact Fee Law, AMC received a significantly higher 2.43 lakh applications, of which 1.26 lakh constructions were regularized, fetching ₹349.16 crore in revenue.
Why the Tepid Response?
Several factors appear to be behind the weak response to the 2022 version of the law. Unlike its predecessor, the new law has stricter regulations and higher associated costs.
- Parking Space Requirement:
The law mandates that 50% parking space must be available for commercial illegal constructions. This requirement has discouraged large commercial complexes from applying, as it is difficult to secure unanimous consent from all stakeholders involved in such buildings.
- Old City Area Restrictions:
For structures located in the heritage zones of Ahmedabad’s old city, the application process now requires a No-Objection Certificate (NOC) from the Archaeological Survey of India (ASI). This additional bureaucratic step has slowed down the process and discouraged applications from these densely populated areas.
- Increased Financial Burden:
The revised law includes additional fees such as betterment charges and scrutiny charges, significantly raising the cost of application. In contrast, these charges were waived under the 2011 law, making the earlier process more attractive for applicants.
- Administrative Hurdles:
AMC officials acknowledge that processing these applications has been a logistical challenge, especially when consent from multiple owners is required for commercial properties. This leads to delays and higher rejection rates.
Zone-Wise Breakdown
AMC’s standing committee also released zone-wise data highlighting the distribution and success rate of applications:
- North-West Zone: 11,583 applications | 3,258 approved | 7,484 rejected
- South-West Zone: 10,784 applications | 2,302 approved | 7,517 rejected
- West Zone: 12,958 applications | 4,677 approved | 6,248 rejected
- Central Zone: 4,977 applications | 535 approved | 2,990 rejected
- North Zone: 9,656 applications | 1,810 approved | 7,632 rejected
- East Zone: 11,475 applications | 5,937 approved | 4,956 rejected
- South Zone: 14,540 applications | 3,132 approved | 7,364 rejected
These numbers reflect varying levels of compliance across the city, with zones like the East and West faring better in approvals, while areas like the Central and North zones showed high rejection rates, possibly due to tighter space constraints and heritage-related restrictions.
What Lies Ahead?
The six-month deadline extension offers a crucial opportunity for property owners who have yet to act. However, for the AMC to see a substantial increase in applications, a few key challenges need to be addressed:
- Simplifying the process for large commercial units by considering alternate models of consensus
- Easing the ASI approval process for properties in heritage areas
- Offering financial relief or incentives to offset the high cost of application under the new law
Urban planners and municipal experts suggest that the government must also focus on public awareness campaigns to educate citizens about the long-term benefits of legalizing their properties — including ease of sale, eligibility for loans, and freedom from future legal entanglements.
Conclusion
Ahmedabad’s ambitious effort to regularize unauthorized structures through the GRUDA Act 2022 has faced significant roadblocks. While the intent behind the updated law is commendable — promoting planned development and urban order — its execution reveals that more flexibility, transparency, and citizen-centric reforms are needed.
As the clock resets with a new six-month window, the onus is now on both the municipal authorities and property owners to come together and make the most of this second chance. If not, the city risks continuing its struggle with unregulated growth — a challenge that no amount of fees alone can fix.
