The Union Cabinet on Thursday gave in-principle approval for bringing in a new Bill under which rent in Delhi will be linked to inflation.

The new Bill will replace the 1958 Act, which was sought to be replaced by a legislation in 1995 but that was not notified even after its enactment.

Officials in the Union Urban Development Ministry said the process of framing the new rent law will commence after withdrawal of the 1995 Act and the exercise will be carried out after consultation with all stakeholders.

The existing Act is perceived to be “pro-tenant” and there has been a long-standing demand to carry out changes to make it “balanced” and “linked to inflation”.

According to officials, since the Delhi Rent Act is likely to affect rent laws of other States in the country, it requires detailed and careful consultation.

The Confederation of All-India Traders (CAIT), an apex body of the business community, hailed the decision of the Union Cabinet to repeal the Delhi Rent Act, 1995, on Thursday and termed it a “wise step”. “For the past 18 years we were fighting against the provisions of Delhi Rent Act, 1995, and were demanding amendments to protect traders and tenants from eviction from their current business place on frivolous grounds of ‘bona fide need’,” said CAIT national secretary general Praveen Khandelwal.

Mr. Khandelwal said the government should now set up an “expert panel” consisting of senior government officials and representatives of traders, tenants and landlords to frame a balanced act to protect the interests of all groups.

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