State government turns focus on builders to raise revenue

With finances in doldrums but not keen to tax citizens more, the Maharashtra government has turned its attention on cash-rich builders for augmenting its resources. The state government is on the verge of tweaking an old scheme that the state believes have helped builders earn huge profits at the expense of the state.

The government is on the verge of okaying a proposal where builders in Mumbai would henceforth have to pay a premium for utilising the extra Floor Space Index (FSI) as per the ready reckoner rates of the year in which extra FSI is bought. Floor Space Index is the permissible built up area allowed in a plot. 

In simple terms, it means buyers who want to buy .33 extra FSI would now have to pay as per the RRR of 2015 and not as per 2008, which they have been paying till now for using the extra .33 FSI. With the latest Ready Reckoner Rates applicable, builders would have to pay a considerably higher amount of premium. A Housing department official said that the file has been sent to the office of Maharashtra Chief Minister Devendra Fadnavis and is expected to be cleared soon.

"The developers have been earning a huge profit as Ready Reckoner Rates of 2008 were being used by builders to get the extra FSI. Why should the builder pay a price as per the RRR of 2008 when he is selling the flat as per the market rates of 2015?" questioned a bureaucrat justifying the move. While the premium is paid to the BMC, the state has a stake because the BMC used to share the premium received on a 50-50 basis with the state government.

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MCHI-THANE has always been very clear that fine housing complexes and shopping malls cannot stand in isolation. A great City is the sum total of great buildings, great infrastructure and great people. MCHI has been committed to growth of the real estate sector and is credited with the harmonious growth and rise in quality and standards of construction in Thane City in the past decade.

Its aim as an Association of Developers has been to seek rational rules and regulations which are uniformly applied across the board as this will to a great extent result in speedy construction, cost reduction, fair pricing and a push for better quality standards at par with the developed world, with a high level of transparency.