State government turns focus on builders to raise revenue
The government is on the verge of okaying a proposal where builders in Mumbai would henceforth have to pay a premium for utilising the extra Floor Space Index (FSI) as per the ready reckoner rates of the year
Feb 03, 2015
Source : The Economic Times
Devendra Fadnavis, Maharashtra CM


MUMBAI: With finances in doldrums but not keen to tax citizens more, the Maharashtra government has turned its attention on cash-rich builders for augmenting its resources. The state government is on the verge of tweaking an old scheme that the state believes have helped builders earn huge profits at the expense of the state. 

The government is on the verge of okaying a proposal where builders in Mumbai would henceforth have to pay a premium for utilising the extra Floor Space Index (FSI) as per the ready reckoner rates of the year in which extra FSI is bought. Floor Space Index is the permissible built up area allowed in a plot. 

In simple terms, it means buyers who want to buy .33 extra FSI would now have to pay as per the RRR of 2015 and not as per 2008, which they have been paying till now for using the extra .33 FSI. With the latest Ready Reckoner Rates applicable, builders would have to pay a considerably higher amount of premium. 

Housing department official said that the file has been sent to the office of Maharashtra Chief Minister Devendra Fadnavis and is expected to be cleared soon. 

"The developers have been earning a huge profit as Ready Reckoner Rates of 2008 were being used by builders to get the extra FSI. 

Why should the builder pay a price as per the RRR of 2008 when he is selling the flat as per the market rates of 2015?" questioned a bureaucrat justifying the move. 

While the premium is paid to the BMC, the state has a stake because the BMC used to share the premium received on a 50-50 basis with the state government.

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