Maharashtra May Extend 50% Discount in Premiums for Builders till March 31

A senior official said the Urban Development (UD) was likely to re-introduce the scheme in the state cabinet and it may be extended for the current financial quarter till March 31, 2022.

MUMBAI : : With agencies like Mhada, Slum Rehabilitation Authority) and the BMC collecting record revenues in 2021, the state government may extend the 50% discount in premiums for builders for a few more months. The 50% discount scheme has already ended on December 31. A senior official said the Urban Development (UD) was likely to re-introduce the scheme in the state cabinet and it may be extended for the current financial quarter till March 31, 2022.

The state government had in January 2021, issued a government resolution (GR) slashing construction premiums paid by builders by 50% after the cabinet approved the proposal. According to the GR issued by the urban development department, builders have to pay premiums based on the Ready Reckoner (RR) rates of 2019 or 2020, whichever is higher. Developers who opt to avail the discount will have to give an undertaking to the local bodies that they will pay the entire stamp duty and not charge any stamp duty from homebuyers. The discount is only be on premiums, not on development charges and cess, but is applicable for both ongoing and new projects. The scheme was only valid till December 31, 2021.

"Files for premium collect of close to Rs 5,000 crore are pending with various authorities in Mumbai. If the scheme is brought back for three months, this revenue will be collected. It will not only generate revenue but also help create housing stock. All three parties - the Shiv Sena, Congress and the NCP - are on board, and it is expected that the scheme will be rolled out again for at least 3-4 months," a cabinet minister told TOI.

Following the scheme, the BMC has received a record sum of close to Rs 12,000 crore this year from Mumbai's builders rushing to avail of the 50% discount. Housing Minister Jitendra Awhad has already urged Chief Minister (CM) Uddhav Thackeray and Deputy CM Ajit Pawar to extend the scheme. "Requesting CM Uddhav Thackeray and DCM Ajit Pawar to extend the date of concession in premium for another 6 months. The concessions have helped the building industry and the revenue of all Municipal Corporations, Mhada and SRA has risen. In normal course we could not have got so much revenue," Awhad tweeted.

In September 2020, the Deepak Parekh committee for the real estate industry had recommended a 50% cut in different premiums the BMC charges, including for enhanced FSI, transfer of development rights, second staircases, and additional issues such as open space deficiencies and others. The committee had recommended a 50% cut for all these premiums across the board, not only for the city but the entire state.

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Source: realty.economictimes.indiatimes.com