Real estate stimulus: Govt sweetens pot for Mumbai builders

The rush to avail the benefit of concessional premiums announced by the state government may see a sharp rise in approvals sought for building projects in Mumbai in the first eight months of 2021.

This is because the government on Thursday further sweetened the pot for the city’s construction industry.

The state urban development (UD) department, while issuing orders regarding the implementation of the real estate stimulus approved by the government, made it clear that concessions extended by the previous regime in premiums till August 2021 for Mumbai will remain applicable.

This would mean that Mumbai builders will be entitled to pay premiums for additional floor space index (FSI) and compensatory fungible FSI at just 17.5 per cent of applicable ready reckoner (RR) rates for residential projects till August 19, 2021. For commercial projects, the premiums payable will be at 20 per cent of RR rates.

In a move that will significantly bring down construction costs, the Uddhav Thackeray government had recently announced the slashing of applicable construction premiums by 50 per cent for all ongoing and new projects across Maharashtra till December 31, 2021.

Premiums for those opting for the concession will be counted at prevalent RR values or 2019-20 rates, whichever is higher.

The special fiscal incentive package, handed out in the backdrop of the Covid-19 pandemic, was rolled out on Thursday, with the UD department issuing a notification in this regard.

In August 2019, then Devendra Fadnavis government, with an eye on the Assembly polls, had lowered premiums charges for additional and fungible FSI in Mumbai for two years until August 19, 2021. As per the 2019 decision, builders have been paying premiums at 35 per cent of the prevalent RR values for residential properties, and 40 per cent for commercial ones.

According to the department’s order on Thursday, the old concession will continue to remain applicable. In other words, between now and August 19, construction projects in Mumbai will be eligible for higher concessional rates than the rest of the state.

Meanwhile, the government also clarified that builders opting for the special scheme across the state will have to the bear the stamp duty and registration fee for all flats sold in the beneficiary component.

No free FSI for sale component in SRA

In another order issued on Thursday, the UD department clarified that for slum rehabilitation projects outside Mumbai and some other special planning areas, which have been excluded from the newly announced uniform development control rules, the new provision of counting areas previously included in the “free-of-FSI” component in the payable “ancillary FSI” component will be applicable. In other words, builders can avail 60 per cent additional FSI over and above the regular FSI but on payment of premium.

Approvals go offline

For areas now governed by the uniform development control rules, the state has permitted offline submissions till March 31, 2021. Officials said this is being done as most civic bodies are still updating their softwares.

Uddhav reviews infra projects

CHIEF MINISTER Uddhav Thackeray on Thursday held a meeting of the Cabinet infrastructure committee to review various infrastructure projects in the state. The meeting was also attended by Deputy Chief Minister Ajit Pawar, PWD Minister Ashok Chavan and others.

An official said MSRDC officers made a presentation on Konkan coastal road project connecting Sindhudurg and Mumbai, a connector in Nashik for Samruddhi Corridor, Pune Ring Road project, Versova-Virar coastal road project among others. Instructions were given to place proposals for the cabinet for the approval of DPR with other processes, the official added. The CM, in another meeting on Thursday, asked officials to place the Pune-Nashik semi high-speed railway project proposal before the state cabinet. Instructions were given to officials after MRIDC made a presentation.

Connecting the two districts, which lead in agriculture and industrial sectors, by a direct rail line will help fast-track economic development in, said the official.

With Inputs From ENS