Ahead of Assembly polls, the Maharashtra government has unveiled a Rs 2,200-crore fiscal package for Mumbai’s real estate industry, offering significant cuts in premiums that builders pay for availing additional buildable area or floor space index (FSI) for their projects.
Scrambling to stem the slowdown in the construction sector, leading industry bodies — including Maharashtra Chamber of Housing Industry and National Real Estate Development Council and Practising Engineers Architects and Town Planners Association — had last month approached the state government and the Centre, seeking lowering of the construction premiums. The state government has now slashed premiums across segments.
But while the move will significantly reduce construction cost of projects, public exchequer will take a big hit. According to Mumbai municipality’s initial estimate, the dole will cost them Rs 1,260 crore. The state’s exchequer will take a hit of Rs 800 crore.
With premiums also slashed for redevelopment of buildings in Maharashtra Housing and Area Development Authority colonies, the government stands to lose another Rs 140 crore in estimated revenue.