NEW DELHI: The recent move by the Maharashtra government to reduce premiums charged by the civic authorities by 50 per cent basis ready reckoner rates of 2019 or 2020, whichever is more, until December 31, 2021, is being widely welcomed by the industry.
Ficci’s Real Estate Committee on Friday said that the real estate sector desires a similar move to be implemented in other states as well. According to the committee, the move will not only trigger cost reduction but also enable the developers complete their projects on time with a major enhancement in developers operational capacity.
“This move will ensure that projects stuck for last mile funding, or that have no takers of unviable projects, are considered. Despite a hair cut in value by the developers and lately NBFC, it was not appealing to the PE.
The reduction in premiums will serve as a role model for other state governments to revive the real estate sector and bring back much needed employment and overall reduce the pain of the pandemic,” said Sanjay Dutt, joint chairman, Ficci Real Estate Committee & MD and CEO, Tata Realty & Infrastructure.
Premium refers to the number of charges that are levied by the state with respect to approvals for initiating, progressing and completing an area in a project. According to estimates, these charges constitute around 18 to 25 per cent of total project cost in Mumbai. The developers, who will be taking the benefit been asked to pay the stamp duty.