Mumbai Corporation supports 50% Slash in Real Estate Premiums
All the eight political party group leaders in the BMC have expressed support for the 50% reduction in premiums, cess and levies for the real estate industry, said municipal commissioner I S Chahal.
Civic administration is now awaiting the state cabinet nod to the Deepak Parekh commitiee’s recommendations even though it expects a shortfall of Rs 5,000-6000 crore in its revenue this fiscal. Between April and September, revenue from premiums/cess was a more Rs 220 crore as compared to its usual average of Rs 3500 crore.
Reduction in premiums will not harm our bottom line, rather projects will become viable and developers will come ahead to pay and start work. Five to six projects such as Godrej and we will meet our revenue targets, he said.
The Parekh committee in its report said premiums and charges in Mumbai are significantly higher than other comparable cities resulting in deep inefficiency and increased working capital requirements in a market where lenders are risk-averse and reluctant to fund developers. It is estimated these levies constitute one-third or more of the sale price if a project.