Maharashtra slashes premiums for commercial constructionhttps://indianexpress.com/article/cities/mumbai/govt-slashes-premiums-for-commercial-construction-5370062/

Maharashtra slashes premiums for commercial construction

In justification of the move, his government had announced that it was being done to “reassert Mumbai’s status as the country’s commercial capital” and to create space for more jobs in the city.

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On Saturday, the government also halved premiums payable for additional FSI for the construction of information technology and biotech parks. (Express photo)

Four months after sanctioning proposals for permitting higher buildable space for commercial purposes in Mumbai, the Maharashtra government has now slashed the premiums payable for these.

Allaying concerns over lack of adequate foundation in and around Mumbai’s developed business districts, Chief Minister Devendra Fadnavis had on May 8 sanctioned a new regulation that would offer a higher floor space index of 5 for commercial developments on residential or commercial plots in Mumbai.

In justification of the move, his government had announced that it was being done to “reassert Mumbai’s status as the country’s commercial capital” and to create space for more jobs in the city.

On Saturday, the Fadnavis government dished out another dole for commercial constructions. While the Mumbai municipality had originally proposed to collect premiums at 80 per cent of the ready reckoner (RR) values for the additional FSI availed by such constructions, the state government has now slashed this to 60 per cent.

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FSI is the ratio of buildable area to plot area. It determines the extent of construction permissible on a plot, while RR values are market values of plots as determined by the government. Following Fadnavis’s move, the state Urban Development (UD) department will now issue a ‘corrigendum’ in the coming week to incorporate the change in Mumbai’s DP.

Meanwhile, on Saturday, the government, which notified other modifications made to Mumbai’s new development plan, also halved premiums payable for additional FSI for the construction of information technology and biotech parks. While the government had originally proposed to collect 80 per cent of RR for such construction, this has now been reduced to 40 per cent, confirmed sources. On the other hand, premiums payable on additional FSI for construction of Fintech parks has been raised from the originally proposed 30 per cent to 40 per cent of RR rates. In a bid to promote such activity, Maharashtra had earlier raised the FSI permissible to them. Fadnavis has promoted Mumbai’s Bandra Kurla Complex as a potential IT and fintech park hub.

But the move to slash the premiums comes at a time when an assessment exercise, carried out by the Mumbai municipality, has found that it stands to lose Rs 830 crore in projected revenue from premiums due to previous changes that have been incorporated in Mumbai’s development plan.

On Saturday, the Fadnavis government also raised the FSI for revamp of privately owned medical institutions. They can now build up to five times their plot size. A special concession permitted starred-category hotels in Mumbai to utilise up to 20 per cent of the buildable space for shopping malls and other non-hotel related commercial purposes was also approved. Ironically while formulating Mumbai’s new development plan, the municipality had done away with the distinction between starred and the non-starred category of hotels. Based on the road width, constructions of all hotels on developable plots were eligible for a universal FSI ranging between 3-5. Government officials said “the special concessions for starred hotels was being done to promote tourism, and was in line with the government’s tourism promotion policy.”

But while incentivising commercial construction, the government has kept the proposal to offer additional FSI for redevelopment of the Goathans and Koliwadas (fishermen villages) in Mumbai in abeyance for now. While Mumbai’s BJP president, Ashish Shelar has been pushing the demand, sources said that it will be decided at a later date. A contentious proposal to allow higher construction densities around Mumbai’s public transport corridors, and the revised sharing formula for mill land developments has also been kept in abeyance for now.