The Chandigarh Administration have approved the scheme through which the industrial and commercial plots available on leasehold basis can be made freehold in order to make available crores of rupees worth of assets, facilitate business environment, and earn revenue. The proposal has been cleared by Gulab Chand Kataria and has been sent to the Union Ministry of Home Affairs (MHA). An official of MHA has confirmed receipt of the proposal, and it is under consideration.

This is the second time that the government has attempted to adopt a policy on freehold conversion for commercial and industrial buildings which are leased. However, the previous policy was rejected by the MHA. But it was argued that the present one is likely to be successful as the Centre has been pushing the UT administration to make proper use of the land through deregulation.

Officials also said that the present policy has addressed the concern raised by the then UT administrator, Shivraj Patil, in 2015. He had rejected the policy on the ground that the process of conversion may result in the handing over of the state land to private entities at low prices.

According to the officials, there has been some financial reasoning offered by the administration for the proposal. This issue had led to delays in some other projects such as the development of Vikas Marg and property auctions, etc., which had been ordered by the MHA before. The administration has been permitting leasehold properties to be converted to freehold property by paying certain amounts for quite some time now. However, hundreds of leasehold properties of both industrial and commercial purposes, which are owned by Chandigarh Housing Board (CHB), Municipal Corporation, and UT Estate, have not been sold yet.

The officials said that the buyers preferred the freehold properties located in the nearby states of Punjab and Haryana due to various conditions associated with the leasehold property, such as payment of ground rent annually, financial issues, and no ownership rights.

More than 70 percent of the land used for commercial and industrial purposes in Chandigarh is leased for 99 years. If there is any leasing, then the allottees must pay ground rent annually at various rates during the lease period. The authorities are also facing challenges in trying to reclaim the amounts owed on lease of different allocated lands. Another thing that was observed was the difficulty in obtaining loans for the lease of the property because loans cannot be provided easily by banks.

Another problem was related to legal matters arising due to transactions made under the General Power of Attorney method, which was done to avoid paying the transfer charges imposed by the government. Apart from the conversion of lands into freehold ownerships, there are other aspects of land reforms and urban planning that the government is considering, including increasing floor area ratio (FAR), zoning flexibility, better building coverage regulations, and mixed use developments.