In a bid to provide a much needed respite to the realty sector ahead of the assembly election, the state government may soon issue directive to the Brihanmumbai Municipal Corporation to reduce the fungible compensatory premium for residential to 40% from 50% and for commercial to 40% from 60% for two years. Besides, the government may ask BMC to cut the premium for additional floor space index to 40% from 50% for two years. The government may explore an option of issuing directive to BMC in the larger public interest under the section 153 of the Maharashtra Regional and Town Planning (MR & TP) Act, 1966.
Further, the government could also issue directive to BMC for 50% reduction in development charges for residential projects from the present level of 4% of ready reckoner rates and 50% cut for commercial from the present level of 8% of the ready reckoner rates.
Alternatively, the government may seek suggestions and objections to amend MR & TP Act, 1966 to bring down these charges. However, it is a time consuming as the assembly election is slated for October and the code of conduct is likely to come into effect from September.
The government's response in this regard will be to the recent communication from the BMC commissioner Praveen Pardeshi. The municipal commissioner in his communication had said the realty sector during their meetings with the chief minister and chief secretary had requested to cut various premiums, development charges, development cess citing they are on a higher side. Pardeshi has urged the urban development department to move to the government for necessary directives and amendment to the MR & TP Act, 1966.
Highlights
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| BMC maybe directed to reduce the fungible compensatory premium for residential to 40% from 50% and for commercial to 40% from 60% for two years |
| The government may seek suggestions and objections to amend MR & TP Act, 1966 to bring down these charges |
| BMC commissioner Praveen Pardeshi has urged the urban development department to move to the government for necessary directives and amendment to the MR & TP Act, 1966 |
State urban development department officer told DNA, "The government will soon take a decision in this regard as the realty sector has argued that due to higher premiums and development charges it was difficult to carry on.'' He informed that once the development charges get reduced, development cess will also fall to 50% automatically.
Nahar Group vice chairperson Manju Yagnik said if the premiums are reduced, the interior cost will also sizably come down which will highly benefit the end user. Any project which is viable to the developer, he would willingly sell his apartments so naturally the pressure on developer and end user will subsidise. ''In the past lot of indirect charges like ready reckoner rates being higher than the actual pricing resulted in the stamp duty, registration and other charges imposed highly on buyers. The government's move will provide a little relaxation to the real estate sector going through a turmoil at present," she added.
Further, the Builders Association of India spokesman Anand Gupta said the realty sector was passing through liquidity crunch and it was unable to bear higher premiums and development charges. "The government should now act quickly to bring it down which will partially help the realty sector to stay afloat,'' he noted.
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