January 6, 2021 1:36:49 am
The Maharashtra Cabinet is likely to announce on Wednesday a decision on the much-debated fiscal stimulus for the real estate sector.
Offering a special one-time payment window for construction projects across Maharashtra, the Shiv Sena-led urban development department has proposed lowering of all construction premiums by 50 per cent till December 31, 2021 for all ongoing and new projects.
Despite objections raised by the BJP and reservations of ally Congress, sources said that Chief Minister Uddhav Thackeray is set to roll out the special package.
Contending that the lockdown had worsened the slow down and the liquidity crisis in the construction industry, the department’s proposal is to charge all ongoing and new projects – sanctioned before the December 31, 2021 – discounted premiums of 50 per cent for all payments paid on or before the December-end cut off.
The proposal, in the works for some time, had witnessed a heated debate in the previous Cabinet meeting. While NCP is in favour of the proposal and is believed to have initiated it, the Congress, which was upset at not being “consulted” on the proposal, had forced a deferment by seeking more time to “study the proposal”.
Later, Leader of Opposition in the Assembly, Devendra Fadnavis had targetted the ruling coalition for formulating the proposal in a manner that unduly favoured a select coterie of developers. With the proposal expected to significantly cut down input costs for a project, the real estate lobby has been “actively” pushing for the stimulus.
According to sources, Thackeray had managed to get the Congress camp on board. In the backdrop of allegations raised by the BJP, the government may, however, tweak the proposal while approving it.
Builders opting for the concession may be asked to make premium payments on the basis of ready reckoner (RR) values of 2019 instead of the 2020 rates.
Fadnavis had earlier alleged that RR values of certain land parcels owned by influential builders were lowered unfairly in 2020.
“The Cabinet will take a final call on whether the base year for premium payments under the sop should be 2019 or 2020,” a source said.
In order to ensure that the benefits of the sop are passed on to the flat buyers to a certain extent, the government has already proposed to make it mandatory for builders availing the sop to pay the stamp and registration fee for sold flats during the concession period. Earlier a committee, led by HDFC Chairman Deepak Parekh, had recommended slashing of construction premiums as a measure to revive growth in the sector.
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