It is already starved of funds. And the Brihanmumbai Municipal Corporation (BMC) is worried it may now have to refund to builders at least Rs 160 crore that it had raked in as premium on additional Floor Space Index (FSI) of .33.
BMC had received five to six applications for refund from panicky builders even before the court verdict. The amount of refund in one case was as high as Rs 29 crore.
The Bombay High Court’s verdict striking down additional the FSI that the state had proposed means the BMC will have to let go of additional income that the amendment was expected to bring.
“We’ll have to start refunding the money as soon as applications for it start coming in,” said Chief Accountant (Finance) Ram Dhas. “We haven’t received any applications so far.”
The state and the BMC were to share revenue from the premium on additional FSI equally.
The corporation had received 326 applications for additional FSI from the eastern and western suburbs. This earned the state and the BMC Rs 348 crore. Of this, the state handed over Rs 158 crore to the BMC.
According to civic officials, builders who have already built structures after approvals were granted under the 0.33 FSI notification are likely to demand a refund.
“These builders will now have to go back and buy TDR from the open market so that their structures are regularised,” an official said requesting anonymity.
An officer in the Development Plan department said the BMC was hoping to use the revenue from sale of additional FSI to implement the recommendations of the revised
The BMC had asked for the state’s nod to raise an internal loan to tide over the fiscal deficit because it could not meet its revenue targets.
“Had we got that additional revenue, we could’ve raised lesser internal loan, which would have reduced the burden on the BMC,” Dhas said.
The BMC had put off new projects because of a lack of funds.
“The addition of almost Rs 500 crore to the kitty annually would have helped us tide over the crisis and take up new projects such as the much-needed redevelopment of markets and hospitals,” a civic official said requesting anonymity.