FSI premium reduced, homes in Mumbai may get cheaper

A move by the Maharashtra government may reduce the price of homes for the buyers. The government has reduced the premium charges paid by builders for floor space index (FSI) for all residential and commercial projects in Mumbai for two years.

According to Hindustan Times, Devendra Fadnavis on Monday (19 August) signed the decision. According to the decision, the premium for additional FSI which is more than the state-fixed FSI has been reduced to 40% of ready reckoner rate, which was 50% before the decision.

The premium has been dropped to 35% for galleries and flowerbeds FSI which is also called as ‘fungible’ of ready reckoner rate, which was earlier 50% for residential buildings; and to 40% from the current 60% for commercial structures. For the low income groups the premium amount for MHADA is reduced to half.

Municipal Commissioner of Praveen Pardeshi earlier had written to the state on the same as it was the demand for many from the real estate sector, such as Maharashtra Chamber of Housing and Industries, National Real Estate Developers Council, and Practicing Engineers and Town Planners Association.

City-based senior architect Vilas Nagalkar told to Hindustan Times, “This is a good move and will give a much-needed boost to the sector. As it will reduce the amount a developer has to pay to the authorities, it will reduce the overall cost of the project and make many construction projects, that were stuck until now, feasible.”

According to the report, the decision will give some relief to buyers as well. Nitin Kareer, principal secretary of the urban development department, told to Hindustan Times, “We expect this relief will be transferred to the buyer as well.”

This decision will help BMC to generate more income that comes mainly from premiums. The 2018-19 budget estimated income was Rs 3,947.38 crore but managed to generate only Rs 3,044.35 crore. Budget 2019-20 estimates an income of Rs 3,453.64 crore for the DP department, the report says.

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