In three months, BMC receives Rs 800 crore in revenue from real estate premium payments

The Brihanmumbai Municipal Corporation (BMC) is receiving a steady stream of proposals for various development projects. This can be demonstrated by the revenue generated by premium payments from city builders. According to the municipal corporation, it has already made Rs 808 crore through premium charges in the last three months – April, May, and June – as of June 24th.

 

The BMC charges fees for providing building authorization of commencement certificates, IOD -Intimation of Disapproval (IOD) approval of civil plans containing improved Floor Space Index (FSI), transfer of development rights, and second staircases, and open space deficits, among other things.

 

P. Velrasu (IAS), Additional Municipal Commissioner (Projects), acknowledged the corporation's revenue thus far and stated that they are receiving a satisfactory response despite the suspension of the 50% concession on premium payments beginning this fiscal year.

 

Previously, in light of the Pandemic and its negative influence on the real estate sector, it gave a 50 percent premium payment discount to builders who will pay the entire stamp duty and not charge any stamp duty to homebuyers. Following the markdown, the BMC generated enough money to last until January 2022. According to the BMC, the income surged from the expected Rs 2,000 crore to a revised estimate of Rs 14,750 crore.

 

However, when asked if the concession will be offered again since real estate interests begged that it be extended, Velrasu said that no such decision had yet been made. "The concession was given due to the epidemic. It was a limited-time deal "he stated. Whereas developers claimed that approval costs in Mumbai are likely to be the highest in the world, as we developers end up spending 50-60% of input costs in premiums.

 

"We understand the government's constraint of having to fund the income deficit through such high premiums, but such a decision is not only detrimental to the overall development of the sector but also makes property prices in Mumbai excessively unreasonable for end-users. However, we are certain that the government will take note of it and that a favourable premium regime would be implemented shortly "Ajay Ashar, President-Elect of the Maharashtra Chamber of Housing Industry, stated