Mumbai: The Maharashtra government and the realty players are on a same page when it comes to the allocation and the utilisation of the Transfer of Development Rights (TDR) in Mumbai and its suburbs.
The BJP-led government has recently introduced a revised TDR policy whereby TDR will be charged at 60% of the prevailing ready-recknor (RR) rates and its utilisation will be universal in the Mumbai suburbs.
The government has said it will bring in transparency, sanity and curb cartelisation and stocking of TDR in the city's realty sector which expects speedy revival.
TDR is a vital instrument for builders because it allows them construction rights over and above the normal Floor Space Index (FSI) that is currently permitted when they construct or redevelop buildings in suburban Mumbai. TDR is generated when the developer/owner surrenders land to the government and agrees to re-house slum dwellers or project-affected persons free of cost.
A senior government official told Business Standard: "TDR was introduced in the Mumbai Development Regulating Rules for the ease of land acquisition. Further, for slum development and rehabilitation additional provisions with respect to promotional TDR, Floor Space Index (FSI) were accepted. In market, the TDR valuation depends on demand and supply. Considering the market trend, nearly TDR worth Rs 33,000 crore was given as on date by the state government.''
The official said while amending the provisions related to TDR, the financial repercussions will also be assessed.
''Any amendment in the Development Control Rule (DCR) regarding 'built-up area' or 'land use' should not lead to unusual and unwanted financial gains. A proper enforcement of government cess/duty may be useful in such situation,'' the official said.
Rahul Anand, Managing Director, Portman Holdings, India, said it's a positive move by the government to allow universal usage of TDR which will encourage the developers to undertake more slum rehabilitation (SRA) kind of projects in prime locations such as Bandra.
''This will contribute to a large extent in making Mumbai slum free. TDR is definitely a good source of revenue for the government. However, the prices should be rational to make development profitable as developers are also facing higher input & finance costs,'' he added.
Lalit Kumar Jain, CMD, Kumar Urban Development Ltd, said any mechanism which is transparent but doesn't add to the cost is welcome.
"The state government should understand that any revenue generated additionally from housing shall only affect home buyers. TDR should be utilised in a stipulated time, which will avoid stocking and speculation activity,'' he said.
Mantri Realty chairman Sunil Mantri had said previously that TDR was calculated on the basis of 10% to 30% charges of RR valuation while keeping a price cap which helped generate TDR from the government at the cheaper rate.
''The BJP government has amended the policy whereby TDR is now charged 60% of the RR price which will make TDR expensive. The government needs to give an option of purchase 75% of the TDR at 10 to 30% of 2015 RR valuation. This will result in generation of TDR at cheaper rate ,'' he said.
Builders Association of India spokesman Anand Gupta suggested that the government needs to open an escrow account so that the funds mobilised through the allocation of TDR can be used for the improvement of Mumbai's infrastructure.