The State government has agreed to reduce development charges and the premium for extra floor space index (FSI) up to 33% in the city, the developers’ lobby said on Monday.
Speaking on the sidelines of a conference organised by the National Real Estate Development Council, Niranjan Hiranandani, national president of the council, and chairman, Hiranandani Communities, said the charges in Mumbai were high and the government has accepted the demands of the builders.
“The government has agreed to reduce the development charges and extra FSI up to 33% in Mumbai, which was too high. Now the land acquisition prices are skyrocketing. Those needs to be rationalised soon,” he said.
Earlier this month, hit by a liquidity crunch following the non-banking finance companies (NBFC) crisis and banking sector meltdown, representatives of an embattled construction sector met Union Minister for Housing and Urban Affairs and Civil Aviation Minister Hardeep Singh Puri and Minister of Commerce and Industry Piyush Goyal in Mumbai. They demanded concession in taxes at the Central level and a 50% cut in the premium and development charges levied on major construction projects in Maharashtra.
Chief Minister Devendra Fadnavis and Minister of State for Urban Development Yogesh Sagar had accepted the demands and directed Chief Secretary Ajoy Mehta to hold a meeting with Municipal Commissioner Praveen Pardeshi to complete the modalities on what concessions could be granted given the State’s precarious financial situation.
The real estate sector has been complaining of a severe liquidity crunch ever since the NBFC meltdown. The government tightening the noose through the Real Estate Regulatory Authority (RERA) has worsened matters. “But the growth of the real estate industry is inevitable, it shall see a paradigm shift as an outcome of system reboot via policy and reforms,” Mr. Hiranandani said.
