The Maharashtra government has lifted the stay it had imposed on the 2017-18 ready reckoner rates for land in the Mumbai Metropolitan Region. In May this year, the Devendra Fadnavis-led government had used a little-known rule in the General Clauses Act to stay these rates, which was perhaps the first time when the government had stepped in after the publication of the rates.
Ready reckoner (RR) rates are market values of properties, which are determined by the government for payment of stamp duty. These rates — published annually — also impact the construction cost of a real estate project, since several premiums and charges collected by the municipality and the government are linked to the RR values. While the office of Inspector General of Registration (IGR) had published the RR rates for 2017-18 on April 1 this year, the Maharashtra Chamber of Housing Industry (MCHI-CREDAI) — the apex body representing builders in the Mumbai Metropolitan Region — had sought Fadnavis’s intervention, demanding the RR values for lands be stayed.
While the IGR’s office had contested the argument made by the builders’ body that there had been an abnormal hike in this year’s rates and that the slump in the construction sector hadn’t been adequately taken into account, the CMO had a different viewpoint in the matter.
Since the state government does not have powers to stay the RR rates once published, it had used a provision (Section 21) of the General Clauses Act to consider the building industry’s demand. The provision basically states that a person empowered to issue a notification or an order also has the power to vary or rescind such a notification or an order. In the relevant context, it means that the IGR can invoke this section to modify its own order. Accordingly, the CMO had issued directives asking the IGR’s office to act in this regard, while appointing a panel to consider the builder’s complaints.
The stay had been in place for four months, even as the initial proposal was for the stay to last a month. Sources confirmed that the stay was finally lifted from October 1 onwards. They also confirmed that the office of the IGR had submitted a report regarding the panel’s findings to the government. The findings are under consideration.
A downward revision in the published rates, however, seems unlikely. “The hike this year was the lowest ever in seven years. The average hike in Mumbai was under 4%. This shows that the general slowdown in the sector had been accounted for,” said an official who did not wish to be named.
The state government had earlier stepped in to defer release of the new RR rates till April 1. The sources further pointed out that the state’s exchequer had already suffered a revenue loss of over Rs 3,200 crore following the decision to lower taxes on petrol and diesel, just as it was shoring up income to bear the additional burden of the farm loan waiver.