Realty sector
Realty sector

The ailing realty sector can expect relief ahead of Dussehra. The Maharashtra Cabinet will soon approve a 50 per cent reduction in all premiums, charges, levies, cess, premiums for staircases, lift wells and lobbies, under the Development Control and Promotion Regulation (DCPR) 2034, as per the recommendations of the Deepak Parekh Committee. The government decision will be applicable to these premiums recovered by the BrihanMumbai Municipal Corporation, the Maharashtra Housing and Area Development Authority (MHADA) and the State Rehabilitation Authority (SRA).

The state urban development officer told The Free Press Journal, ‘‘The proposal will go before the cabinet. The demand and recommendation of the committee is to make it apply to ongoing schemes as well. However, this won’t be applicable to completed schemes. So in that sense, not retrospective.’’

BrihanMumbai Municipal Commissioner Iqbal Chahal has given the civic body's consent in a letter sent to the urban development department principal secretary on October 1. ‘‘Considering the present real estate scenario due to the Covid pandemic and recommendations by the Deepak Parekh Committee to the government and in view of the adverse impact on real estate projects which has been considered as a 'force majeure' situation by the Government of India and the state government, the BMC gives concurrence for reduction in all premiums, charges, levies, cess, premium for staircases, lift wells, lobbies, open space deficiency by 50 per cent under DCPR 2034 which is payable up to December 31, 2021,’’ he said.

Chahal has, however, cautioned that if the proposed reduction is accepted by the state government, it will adversely impact the civic body’s revenue.

The BMC’s annual collection from development plan fees and premiums ranges between Rs 2,500 crore and Rs 3,500 crore, depending on the market conditions. MHADA’s annual collection of premiums is Rs 300 crore, which is transferred to the BMC and the state government. On the other hand, the SRA collects Rs 700 crore towards premiums, of which 90 per cent is remitted to the BMC and the state government in various categories while the balance is used for administration and establishment expenses.

According to a leading city engineer, Yomesh Rao, ‘‘The 50 per cent reduction in premiums, levies, fees and charges will benefit real estate, as there are no considerable sales. So any reduction in price will benefit real estate development and completion of projects.’’ He pointed out that the staircase premium reduction will reduce project costs and it will further fall if open space deficiency is also reduced.

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Free Press Journal