THE burgeoning kitty of the Shiv Sena-run Brihanmumbai Municipal Corporation (BMC) is the latest battleground for the tug-of-war between allies BJP and the Shiv Sena. The latter has taken strong objection to the Devendra Fadnavis government’s plan to dip into the funds the civic body collected by way of premiums from developers for grant of additional built-up space.
With the public debt mounting on its own exchequer, the Maharashtra government on October 20 issued orders, staking right to one-third of such premium amounts collected from developers.
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Under town planning norms, BMC grants 35 per cent additional built-up space for residential and 20 per cent additional built-up space for commercial and industrial development in the form of compensatory or fungible FSI. FSI refers to the ratio of permissible built-up area to plot area.
The fungible FSI concept was first introduced in Mumbai in 2012 to incorporate areas such as balconies, terraces, flowerbeds, voids and niches in the overall floor space computations. These were earlier considered exempted from FSI computations. Accordingly, BMC charges a premium at 60 per cent of the ready reckoner (RR) rate against grant of fungible FSI for residential properties. In the case of commercial and industrial projects, the premium amount is calculated at 80 per cent and 100 per cent of the RR rates.
Presently, BMC retains the entire premium amount, which it is meant to invest in improving Mumbai’s infrastructure. Sources said BMC rakes in about Rs 2,000 crore a year from the premium payments. The government’s new plan, if implemented, would mean BMC will have to part with Rs 667 crore from this collection.
The move has not gone down well with the Shiv Sena. Party MP Rahul Shewale, a former chairman of BMC’s standing committee, said, “BMC has already planned the implementation of major projects in the pipeline by using funds it gets from the premium on fungible FSI. This will go for a toss. BMC depends on such sources for its revenue. Moreover, the state government should ideally support the corporation financially and not put its hands into BMC’s coffers.”
Senior Sena corporator Yashodhar Phanse, who currently heads the standing committe, said, “The concept of fungible FSI was to basically raise funds for Mumbai’s infrastructure improvement. How can the state ask for a share in it? We will oppose the government notification.”
The BJP is in no mood to back down either. Manoj Kotak, party’s group leader in BMC, said it is fair that the state gets a share in the corpus collected from fungible FSI premium as several big projects are worked on at the level of the state government. “If BMC leaders have any objections, they should resolve them through discussions. The main point is, the corporation has to use the funds for Mumbai’s infrastructure development. We need to question what the corporation has done to spend on infrastructure over the past five years?”
So far, BMC has collected more than Rs 6,000 crore in premiums paid for fungible FSI. Among other projects, it is planning to finance the ambitious Rs 12,000-crore coastal road proposed to connect South Mumbai with the Western Suburbs through a 35.6-km freeway from this fund.
An official from the state urban development department, who did not wish to be named, said, “The right to grant additional FSI is with the state government. However, until now all the rights to the premium collected through this fungible FSI were with BMC.”
The official said it is not just BMC that carries out infrastructure works in the city and that the state government has to pitch in too. “The state government also has to fund several projects implemented by agencies such as the Mumbai Metropolitan Region Development Authority and the Maharashtra State Road Development Corporation, and should be entitled to the funds from fungible FSI,” he added.
The BJP-led government’s first Budget had focused on a plan for higher public spending on roads, infrastructure and irrigation. However, the overall financial condition of the state has worsened with the fiscal year’s first six months witnessing a revenue shortfall and a deep agrarian crisis further pressuring the bleak finances, coercing the government to consider different measures to fill its coffers.