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MVA Cabinet approves proposal to cut real estate premiums by 50% till Dec 31, 2021

05:57 PM Jan 06, 2021 | Sanjay Jog

Maha Vikas Aghadi government on Wednesday approved a proposal to cut real estate premiums by 50%.

The Urban Development department had proposed to lower all construction premiums by 50% till December 31, 2021 for all projects including ongoing and new.

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CM Uddhav Thackeray will roll out the package for the real estate sector despite objections raised by the Opposition.

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The proposal was debated in previous Cabinet meetings. It was reported that the NCP is in favour of the proposal but Congress has been upset for not being consulted regarding the proposal.

Also Read: Mumbai: In one of India’s costliest real estate deals, Daftary family buy two apartments in Carmichael Residences for whopping Rs 101 crore

Devendra Fadnavis last month wrote to CM Thackeray and alleged that the "government policies for helping real estate sector to mitigate COVID-19 effect are aimed at and are resulting into windfall gains to a few real estate developers".

He said that earlier a committee chaired by Deepak Parekh (co-founder of HDFC Ltd.) was formed to seek suggestions to revive the ailing real estate sector. However, he added that the recommendations suggested by the committee "are being implemented selectively without considering the real effect of the same".

"It seems that certain vested interests have colluded for the purpose of extending benefits to a few handful parties at the expense of State exchequer. I must state here that the actions of the State Government must be free from the vice of arbitrariness and must conform to Article 14 of the Constitution of India," Fadnavis wrote in the letter.

The former Chief Minister further said that steps like rationalisation of stamp duty rates, ready reckoner rates and Premiums were necessary. "However, under the garb of reduction for rationalisation, windfall gains cannot be allowed to a handful few," he said.

Also Read: Maharashtra govt has sought tax concession from Centre for slum rehabilitation programme: National Real Estate Development Council

Fadnavis also pointed out a "systematic method" devised to give windfall benefit to a few real estate developers by "fragmented and prejudiced reduction of ready reckoner of some of their self-owned and interest plots to the extent of 70% of the existing ready reckoners' rates". Calculating the total gains, the BJP leader said that a few developers would make a windfall gain of more than Rs 2000 crores.

Fadnavis said that he has many such cases in hand which he can submit to "appropriate authority". "I am sure that you (Uddhav) will take corrective action and won't allow the state resources to be exploited and squandered for private gains especially when day in and day out the government expresses its worry about its financial position," Fadnavis said in the letter.

Also Read: Devendra Fadnavis writes to Uddhav Thackeray, says 'govt policies for helping real estate sector resulting in gains to few developers'

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