Looking into liquidity squeeze in the construction industry, Maharashtra government ahead of assembly elections has issued a circular in which it has reduced the interest rate and even granted developers more time for payments under the instalment facility.
Last month, the Maharashtra government has granted Rs 2,200-crore fiscal package for Mumbai’s real estate industry. Now the municipality is trying to make situation much better by reducing interest rate and change in payment method.
According to Indian Express, the interest rate for premium instalments collected from developers in lieu of additional buildable space has been reduced to 8.5 per cent from 12 per cent. Moreover, the developers can now make payments in six instalments over 60 months. Earlier it was, four instalments spread over 36 months. It is for high-rise construction- above 70 m height. Whereas, for low-rise it has been increased from three instalments over 24 months to five instalments over 48 months.
Earlier, there was 18 percent interest for delaying instalments but now municipality has withdrawn the levied interest. Instead of interest charges, municipality will issue stop work notice if the instalment payments are delayed.
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According to Indian Express, the concession will be valid for two years. On account of slowdown, the MCHI-CREDAI has now approached the government demanding that the ready reckoner rates be freezed for three years in the Mumbai region.
