The state government has decided to hike stamp duty on property transactions in the Mumbai Metropolitan Region (MMR) as well as the Pune region by another 1 per cent to fund major urban transportation projects like the proposed Metro and monorail corridors.
Construction projects including the ones for redevelopment will be doubly hit with the government citing the same reason for proposing hike in development charges from such projects. A senior state official said the move to mobilise revenue from these sources comes after a decision to avoid public-private partnership model for infrastructure projects.
The government has also decided to collect a betterment charge from construction projects within 500 m of a transport corridor while offering them additional floor space index (FSI) on payment of premium on 100 per cent of ready reckoner rates. The government has already levied additional 1 per cent on stamp duty for imposition of local body tax in Pune.
The proposed hike will raise stamp duty payable in property transactions to 6 per cent in Mumbai and 7 per cent in other areas of MMR and Pune. Sources said the state administration has already prepared a proposal seeking Cabinet approval for implementing these in MMR. They said these would be a part of a proposal for a nod to the revised plan for the 33.5-km Mumbai Metro-III route,which will connect Colaba to Bandra,the international airport and Seepz.
The Cabinet gave in-principle nod for these proposals for the Pune region two weeks ago.
The underground metro service was earlier meant to be built under PPP but the plan was scrapped as it was deemed financially unviable. Under the new model,about 57 per cent of the project cost (Rs 23,136 crore) will be raised through loan from Japanese Investment Corporation Agency (JICA). The state and the Centre will contribute Rs 2,403 crore each (10.4 per cent) in equity. Another 1,650 crore will be raised through subordinate debt and taxes. The revenue collected through hike in stamp duty,development charges and betterment charge will be used to raise another Rs 1,000 crore for the project.
Metropolitan commissioner U P S Madan said there was a case for levying a development or impact fee in a manner that such investments would benefit citizens in the region and lead to increase in property prices. Sources said the government had plans to double the development charge while offering an FSI of up to 4 for projects within 500 m of transport corridors. Madan said these limits were yet to be fixed.
The plan is to set up a dedicated urban transport fund from revenue collections to act as a permanent source of revenue for transportation projects. The same model will also be applied in Nagpur,where a Metro service is planned,a senior official said.