Mumbai: BMC earns Rs 800 cr revenue through real estate premium payments in three months

Developers say that the approval cost in Mumbai is highest in the world

Sweety AdimulamUpdated: Friday, June 24, 2022, 11:32 PM IST
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Mumbai: BMC earns Rs 800 cr revenue through real estate premium payments in three months | File Photo

The Brihanmumbai municipal corporation (BMC) is seeing a continual response from builders for carrying out various development projects. This can be proved following the revenue that it is making through premium payments from city builders. According to the municipal corporation, in the last three months -- April, May and June - till 24th, it has already made Rs 808 crore through premium charges.

The BMC charges premiums for giving building permission of commencement certificate, IOD -Intimation of Disapproval (IOD) an approval of the civil plans including enhanced Floor Space Index (FSI), transfer of development rights, second staircases, and open space deficiencies among others.

P. Velrasu (IAS) Additional Municipal Commissioner (Projects) confirmed the revenue the corporation earned so far and asserted that they are receiving satisfactory response despite the 50 per cent concession on premium payments that have been stopped from this fiscal year.

Earlier, considering the Pandemic and its adverse impact on the real estate sector, it had granted a 50 percent discount on premium payments to those builders who will pay the entire stamp duty and not charge any stamp duty from homebuyers. Following the discount, the BMC made ample revenue till January 2022. The income increased from the projected Rs 2,000 crore to a revised estimate of Rs 14,750 crore, as per the BMC.

However, when asked, Velrasu that the concession will be given again, as the real estate stakeholders demanded that it should be extended, he replied that so far no such decision has been taken. "Due to pandemic, the concession was granted. It was a one-time window offer," he asserted.

Whereas the developers asserted that the approval cost in Mumbai probably be the highest in the world as we developers end up paying 50-60% inputs cost in premiums.

"We do understand that the government limitation that they have to meet the revenue deficit through such high premiums but such a move is not only disastrous for the overall development of the sector but also makes the property prices highly unreasonable for the end-users in Mumbai. However, we are confident that the government will take a positive note of it and a conducive premium regime will come soon," said Ajay Ashar, President-Elect Maharashtra Chamber of Housing Industry

Confederation of Real Estate Developers' Associations of India( MCHI-CREDAI) Mumbai.

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