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Thursday, April 22, 2021

BMC clears proposal for developers to pay premium at 50% concession 

As per the package, the 50 per cent concessional rate for premium would be valid till December 31, 2021, for all new construction projects – regardless of size and type - sanctioned in the state on or before the deadline.

By: Express News Service | Mumbai |
February 26, 2021 11:17:34 pm
BMC, BMC standing committee, Maha Vikas Aghadi, BMC proposals, Mumbai news, indian express newsBuilders pay premiums for availing additional buildable area or floor space index (FSI) for for residential and commercial projects. (File)

Amid opposition from the BJP, the Standing Committee of the Shiv Sena-ruled Brihanmumbai Municipal Corporation (BMC) on Friday approved a proposal for developers to pay premium charges – payable to the BMC – at a concessional rate of 50 per cent.

In order to revive the state’s economy, the Maha Vikas Aghadi (MVA) government had unveiled a financial incentive package for the real estate sector last month. As per the package, the 50 per cent concessional rate for premium would be valid till December 31, 2021, for all new construction projects – regardless of size and type – sanctioned in the state on or before the deadline. Additionally, ongoing projects may also avail the benefit of premium installments to be paid by December 31.

Builders pay premiums for availing additional buildable area or floor space index (FSI) for for residential and commercial projects.

While opposing the proposal, BJP criticised the state government for only favouring builders. “The Covid-19 pandemic and the subsequent lockdown had severe implications on the general public and small businesses in the city. No concession has been offered on property tax or license fees of small businesses, but only to the rich,” said BJP group leader Prabhakar Shinde.

As per the approved proposals, builders availing the special scheme will have to compulsorily bear stamp duty and registration fees for homes sold during the years in the beneficiary projects.

While approving the proposal, Congress corporators in the committee said that the BMC must ensure that the benefit reaches the home buyer. They also demanded that the concession on the premium should not be extended to the builders who continue to default on payments or instalments to the BMC and the state government.

Corporators in the standing committee also questioned the financial implications that would follow after the implementation of the concession in the premiums. However, the administration side-stepped the queries and said that the concession on the premiums will help boost the state economy.

Development plans fees and premiums are two major sources of revenue for the cash-strapped BMC. In his 2021-22 Budget speech, Municipal Commissioner Iqbal Singh Chahal had announced a target of Rs 2,000 crore from development plan fees and premiums for this financial year. However, the civic body’s revenue receipts from the two avenues was only Rs 708 crore until December 2020.

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