Mumbai: In yet another relief to the ailing realty sector, the BrihanMumbai Municipal Corporation (BMC) has now allowed the payment of premium of 20% land value of ready reckoner (RR) rate for the conversion of industrial land into commercial or residential at the time of commencement certificate (CC) and not at the time of intimation of disapproval (IOD).
BMC on Friday has issued circular in response to the representation made by the realty sector body CREDAI-MCHI that the payment, which is required to be made for the conversion of industrial land into commercial or residential should be allowed not at the time of IOD but at the time of CC.
Industrial lands in Mumbai have no transfer of development right (TDR) or government floor space index (FSI) permissibility as only 1.00 FSI is applicable for the entire Mumbai.
However, at present, industrial lands can be converted into residential or commercial use/zone by paying 20% of land RR rate and required amenity. This premium was recovered while granting permission for conversion of land. Even while no building commencement permission was given to construct any residential or commercial development, the premium was recovered in advance as per the present policy.
Against this backdrop, BMC Commissioner Iqbal Chahal has accepted CREDAI-MCHI request and allowed to pay a one-time premium at the time of CC which is at the time of commencement of actual residential or commercial development – rather than at the time of conversion.
BMC Chief Engineer VB Chithore (DP) in Friday's circular has said the decision has been taken in accordance with the Union Ministry of Housing's recent directives to extend the validity of various approvals by 9 months due to the COVID 19 pandemic resulting in complete stoppage of work and delay in further work due to mass exodus of labour.
Consulting Engineer Yomesh Rao told FPJ, "This deferment of payment in this economic slowdown is most welcome. However, for economic revival the relaxations in premium, interest levied and most importantly RR rates will go a long way in the speedy revival of the realty sector and also the economy in general.''
BMC's move comes at a time when the municipal commissioner is contemplating parallelly reducing the high premium charged by the civic body. Further, BMC's decision is important especially when the state government is contemplating the reduction in RR values which may result in business promotion and employment sustainability in the real estate sector which has hit hard due to the economic downturn and coronavirus lockdown.
