This piece by Shekhar Gupta is a story of change we can believe. Those of us in Marcellus who grew up in Delhi, grew up for the most part in the shabby gentile confines of DDA flats (DDA stands for Delhi Development Authority). As we grew up, we became acutely of whether lived in HIG (High Income Group), MIG or LIG flats (you can guess what the “M” and the “L” stood for as a new caste system was created by the DDA in independent India’s capital city). Regardless of what “IG” our parents belonged to, everybody told us that we were supremely fortunate to be living in a DDA flat even as the roof literally fell in on some of us due to the shoddy construction quality. Shekhar Gupta’s story in The Print explains how this Soviet-style empire of power & patronage is now finding its comeuppance thanks to the flourishing free market economy in the NCR. He writes:
“…the DDA has now launched a marketing blitz with snazzy advertisements to sell houses it has built. And how I’m just as delighted to see how it’s struggling to find buyers. This is how the mightiest, with the full weight of the Indian state behind them, are slain by the market.
It isn’t a small number of flats the DDA is trying to sell. Its inventory of unsold flats, Minister of State for Urban Affairs Kaushal Kishore told the Rajya Sabha last year, exceeds 40,000. For emphasis, the value of the DDA’s unsold inventory is estimated at Rs 18,000 crore.
This for a product, the once-coveted DDA flat, for which there were decade-long waiting lists, where buyers applied and flats were allocated based on a draw of lots and only a few fortunate ones made it.
Of course, it helped if your uncle was a big shot, or if you belonged to any of the special categories with reservations, which even included judges of the Supreme Court. A DDA flat was a privilege and a gift from mai-baap sarkar if not God, in a city where almost nobody could build anything. It is now searching for buyers.”
Given that flats across the land are selling like hotcakes, why is the DDA struggling to sell flats in the booming environs of the NCR? Mr Gupta explains: “Why did these not sell at all? Minister Kishore told the Rajya Sabha in 2021 that the reasons were the remote location (Which genius chose it and why? Did anybody survey the market before building?), the prices being high (Again, did somebody check the market?), lack of Metro connectivity (hello, we thought Metro plans and maps were available to anybody with a keypad in Delhi, and certainly to the DDA) and that, hold your breath, the flats were small.
If you think its failure to sell any of these would deter it from building more, you don’t know the Indian state. Or any state for that matter. Even more so, a state seasoned for seven decades plus in the cask of socialism. This is why Winston Churchill famously described Christopher Columbus as the first socialist: He didn’t know where he was, didn’t know where he was going, but could keep travelling nevertheless, at the taxpayer’s expense.
This is probably why the DDA has added another 23,955 newly destructed flats to its inventory in 2022-23 while the earlier 16,000 remain unsold.”
And why does the DDA behave like a latter day Soviet corporation? Because, as Mr Gupta explains, it is the product of the deeply self-centred and amoral culture that flourished in Delhi in the decades following the exit of the British in 1947: “…the reason is ownership and control of land, and the manner in which Delhi/New Delhi has developed, creating institutionalised inequalities. All rooted in the Nehru-Indira era’s fake socialist fixations.
The British built Lutyens’ Delhi by grabbing several villages generally south of Old Delhi, notably the villages of Raisina and Malcha. Villagers were given not even a pittance as compensation. The rulers who succeeded the British continued the operation in the same spirit, acquiring land in sort of concentric semi-circles, radiating from Raisina Hill to the south.
Many villages were similarly acquired in full, the most prominent, for our discussion today being Munirka. The compensation given to the native inhabitants was something like six annas per square yard. For those born in the metric era, the rupee was originally divided into 16 annas. One anna was four paise. It’s critical to understand what happened to this land then.
In the socialist mai-baap raj, smart people were ‘encouraged’ to set up cooperative societies, and large parcels of this land were allotted to societies formed by those the establishment considered worthy. The smartest civil servants, especially from the home ministry then, were the first off the blocks.
To them, we own the rise of the finest, the most premium residential colonies in New Delhi — Shanti Niketan, Vasant Vihar and so on. You name me one top (especially Leftist) civil servant or adviser from the Nehru-Gandhi era and I will show you the mansion they left behind for their progeny in these colonies. Their own interests sorted, they reached out to the others. No smart bureaucracy wants to leave powerful enemies behind.
Thereby came the lawyer/judges’ cooperative that built Neeti Bagh further south. Next the most senior journalists of the day got together to build Gulmohar Park, and so on. As you went down the hierarchy, from top civil servants to lawyers and journalists, the colonies became more distant, the plot sizes smaller.
All this done, the social pecking order settled, the state now banned all private development in Delhi. This was in the early 1960s. The future generations then — our parents, but mostly even my generation — were left to the mercy of the DDA.”
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Note: The above material is neither investment research, nor financial advice. Marcellus does not seek payment for or business from this publication in any shape or form. The information provided is intended for educational purposes only. Marcellus Investment Managers is regulated by the Securities and Exchange Board of India (SEBI) and is also an FME (Non-Retail) with the International Financial Services Centres Authority (IFSCA) as a provider of Portfolio Management Services. Additionally, Marcellus is also registered with US Securities and Exchange Commission (“US SEC”) as an Investment Advisor.
