Loan waiver effect

Groaning under the weight of the ‘biggest farm loan waiver’ to the tune of nearly Rs 35,000 crore, the Maharashtra government is looking at new avenues of revenue generation.

The ripple effects of the government’s largesse will soon be felt in many sectors, most notably in real estate which will be a source of some extra money. By reclassifying transferable development rights (TDR) as immovable property and linking the base value of the plots with ready reckoner rates, it hopes to mop up some cash.

On paper, of course, the 3 per cent stamp duty levied for such transactions remains the same, but with the value of the parcel of land going up, the amount to be paid as stamp duty shoots up accordingly. Interestingly, by deeming it immovable, the government also made registrations of such transactions mandatory.

Experts believe that such a move will severely affect the government’s scheme of promoting affordable housing in urban areas. The TDR, regarded as a development tool, is an incentive for builders to rehouse slum dwellers or build homes for project affected persons. Though the urban development department, helmed by Chief Minister Devendra Fadnavis, has raised objections to such a move,

Finance Minister Sudhir Mungantiwar, backed by the state government, is determined to push it through. It is estimated that by 2018, the state’s public debt will breach Rs 4 lakh crore mark, with an annual interest of Rs 31,027 crore. Add to that the farm loan waiver, and the picture looks bleaker.