The State government has set up a steering committee of Cabinet ministers, which will include senior officials and industry representatives, to review issues concerning the real estate sector following a meeting of industry representatives with Chief Minister Uddhav Thackeray on Monday.
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The committee will comprise Housing Minister Jitendra Awhad, Urban Development Minister Eknath Shinde, Transport Minister Anil Parab and senior officials besides leading developers such as Niranjan Hiranandani, Rajan Bandlekar, Nayan Shah, Shahid Balwa, Boman Irani, Ajay Ashar, Vinod Goenka, Dominic Rommel and Dilip Thakkar.
In the meeting, the developers’ lobby sought concessions for the sector in the budget, including a 50% cut in stamp duty, which would bring relief to home buyers and help push sales.
A delegation comprising members of the National Real Estate Development Council (NAREDCO) and Confederation of Real Estate Developers Association of India (CREDAI) met Mr. Thackeray to demand fiscal concessions for the struggling construction sector. The government in turn brought the developers up to speed with the final plans for a unified Development Control Rule (DCR) for the Mumbai Metropolitan Region (MMR).
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Mr. Thackeray said in a statement the State government was ready to solve developers’ problems, but the developers “need to impose a code of conduct for themselves.” Mr. Thackeray said the developers and State will have to work as team to overcome the crisis that the real estate sector faces. “Developers should help the government realise the dream of providing homes to slum dwellers at a time when a lot of SRA projects were dragging. The ready reckoner rates must also align with the carpet area and the market rates for the cost of housing to rationalise. The developers must help the government in this endeavour,” the CM said.
“The dialogue comprised numerous suggestions on long drawn-out issue of activating SRA (Slum Rehabilitation Authority) projects in accordance with the appropriate rehabilitation of projected affected people, revival of several projects that have come to a halt due the to liquidity squeeze and economic downturn,” said Niranjan Hiranandani, president, NAREDCO.
Emphasis was also laid, he said, on ensuring the quick rollout of new developments “in order to bring in financial soundness by revision of ready reckoner rates,” cess, fungible floor space index charges and duties levied in the sector. “'The industry also put forward a demand to reduce stamp duty by 50%, which will bring in relief to discerning home buyers and help developers to log in sales numbers,” he said.
The committee will closely review the issues and the State has assured industry of quick action, Mr. Hiranandani said.
In June 2019, representatives of two apex associations of leading developers and businesspersons, MCHI-CREDAI and NAREDCO, had met Union Minister for Housing and Urban Affairs Hardeep Singh Puri and Minister of Commerce and Industry Piyush Goyal in the city demanding concession in taxes at the Central level and a 50% cut in the premium and development charges levied on major construction projects in Maharashtra.
Last year, the Maharashtra government had cleared decks for a slew of fiscal concessions likely to cost the State exchequer about ₹800 crore. While they were approved by the then Chief Minister Devendra Fadnavis, several of them are yet to be implemented in the absence of a final approval to select provisions of the DCR and a unified DCR for the rest of the MMR. “Today, the government apprised us of the modalities of the unified DCR, which is about to be implemented in the MMR soon,” said a developer who attended the meeting.
Among the concessions cleared last year were promises to slash premiums, including a fee on additional buildable area or floor space index (FSI) for projects. The builders also sought an extension of the package to the MMR, senior officials of the Urban Development Department said.
Among the concessions were, removal of the development cess on the additional FSI component completely. The cess was proposed under Mumbai’s new DCR. The premium charged in the case of residential projects was reduced to 35% from 50% while the commercial charges in the same category were brought down to 40% from 60%.
Senior officials said the premiums on construction of information technology parks, redevelopment of Maharashtra Housing Area Development Authority structures too were reduced by 50%. “Some of these need to be included in the State budget,” said a builder.