Maharashtra govt offers to sell prime lease land at concessional rates

On September 13, The Indian Express had earlier highlighted how the Fadnavis government, which is looking at new means of raising revenues, had proposed transfers of these state lands to their lands on ownership basis.

| Mumbai | Published: September 26, 2018 1:52:56 am
Maharashtra govt offers to sell prime lease land at concessional rates In the build-up to the 2019 Lok Sabha and Assembly polls in Maharashtra, the Devendra Fadnavis (in pic) led government on Tuesday sweetened the deal the most for cooperative housing societies existing on lease or occupancy lands. (File)

The Maharashtra cabinet, on Tuesday, approved the proposal permitting conversion of lands previously allotted on lease or on occupancy rights into freehold, decontrolling the government’s say on such lands altogether.

On September 13, The Indian Express had earlier highlighted how the Fadnavis government, which is looking at new means of raising revenues, had proposed transfers of these state lands to their lands on ownership basis.

With over 1.14 lakh such land grants across the state, the government had estimated raising a total revenue of Rs 20,000 crore from the move. A section of land activists have questioned the government’s move to dispose of the public lands itself.

According to the Cabinet’s decision, such conversions into freehold would be permitted for grants to residential housing societies, and those allotted for agricultural or commercial purposes. It had clarified that grants that were made for public uses such as hospitals, recreational grounds, educational complexes, gymkhanas and charitable purposes, cannot avail such conversion.

In the build-up to the 2019 Lok Sabha and Assembly polls in Maharashtra, the BJP government on Tuesday sweetened the deal the most for cooperative housing societies existing on lease or occupancy lands.

Even as a government panel, headed by the state’s Revenue Secretary, Manukumar Srivastav, had recommended that a one-time premium equal to 60 per cent of the ready reckoner (RR) value of the plot be collected from housing societies opting for the option, the Fadnavis-led Cabinet on Tuesday slashed the premium to one-fourth or 25 per cent of the ready reckoner rates

One bureaucrat said, “It is like selling family gold at lower than market values.” In fact, like some activists, some senior bureaucrats continue to hold the view that the lands should not be disposed of at all. “They are a constant revenue stream to the government,” said one.

RR values are annual market rates of properties as determined by the government. They are normally lower than the actual market value of properties. While the decision is applicable throughout the state, housing societies on such lands in the commercial capital will benefit the most from the move. The tony island city of Mumbai has 1,298 leases in all. These include land allotments to housing societies of elected representatives, judges, civil servants, celebrities and state government officials. Besides this, around 3,000 housing societies in Mumbai (suburbs included) stand on lands granted on occupancy rights. The suburbs also have 395 lease lands, including some hosting bungalows of eminent personalities.

Lands granted for bungalows, agricultural, and commercial purposes, meanwhile, would also have to pay just 50 per cent of the RR values. But in cases where such tenures have been granted for more than 99 years, the premiums applicable have been lowered to 37.5 per cent of the RR. The government panel had recommended collecting at least 75 per cent of the RR values for their conversion to freehold. CM Fadnavis, when contacted, however, indicated that the concessional premiums will be applicable for conversions made during the next three years. “We plan to raise the premium levy to 75 per cent of RR thereafter,” he said.

For grants on lease or occupancy rights, restrictions exist over the transfer of apartments, transfer of land or change of us since their ownership vests in the government. The state’s revenue department is also able to collect regular revenue for permitting such transfers. Converting such grants on ownership basis will permanently lift these curbs and transfer full rights on the holders.

Amid opposition from some land activists, the Fadnavis government had taken the first step towards the decontrol in March, 2016, when it made an “enabling provision” in the Maharashtra Land Revenue Code (1966) to allow conversion of land tenures allotted on occupancy rights to ownership. The Srivastav panel was later set up to devise the methodology and the formula for such conversions.

Back in 2012, the then Congress, Nationalist Congress Party government in the state had invited public flak for permitting conversion of lease lands to occupancy rights on concessional basis. While the BJP government had said in 2016 that the concerns expressed by the activists and the general public would be factored in while devising the formula for such transfers, the government’s latest proposal is to award ownership rights to such land holders at far less than the ready reckoner values. But the government has argued that the decontrol measure will rev up the economy, while opening the door for the redevelopment of housing societies existing on such lands. Interestingly, the move will also clear the decks for regularisation of unauthorised use or transfer of such lands.

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