Special fund for infra projects
The state is mulling over different ways to generate resources for the ring-fenced Mumbai Development Fund (MDF), first proposed by the Vision Mumbai document, drafted by global consultants McKinsey in 2003.mumbai Updated: Jul 02, 2010 00:51 IST
The city may finally get a dedicated fund to finance its grand infrastructure plans, but the money to create this fund will come from you.
The state is mulling over different ways to generate resources for the ring-fenced Mumbai Development Fund (MDF), first proposed by the Vision Mumbai document, drafted by global consultants McKinsey in 2003.
State officials have recommended levying a charge on mega construction projects beyond 10,000 sq meters besides charging a one-time ‘impact fee’ on areas benefited by key infrastructure projects.
If implemented, you will have to pay more to buy homes near mass transit corridors such as the Metro and big infrastructure projects. Developers will be charged 3 to 4 per cent of the building or plot value as a one-time fee.
“Deliberations are on whether a certain charge can be taxed on the first commercial transaction which takes place. The money can be utilised for development works meant for the public,” said Chief Minister Ashok Chavan.
This is not the first time that the state has proposed such charges. In 2008, the state government cleared a draft legislation to create a separate MDF.
This legislation however did not see light of day, since the finance department opposed the creation of a separate fund for Mumbai. Officials said this time Chavan is keen on establishing the MDF but there may be opposition over separate levies like impact fee and development charge since the civic elections are round the corner.
“The decision on levying an impact fee or construction levy will be taken by the cabinet. If okayed, the state will have to enact a separate legislation or amend existing laws,” said U. P. S. Madan, project director of the Mumbai Transformation Support Unit (MTSU). Madan added that the state will have to amend the MRTP Act and the MMRDA act to make way for the proposed levies.
The Builder Association of India (BAI) said taxes charged are not being used for specific motives related to the realty industry. “We have no objection paying for developing the corresponding infrastructure but the state and civic body have no such separate fund,” said Anand Gupta, secretary, BAI.
Lalit Kumar, chairman of Kumar Builders said some corresponding benefit should be given to the builders. “The state should offer incentives or else the consumer will have to bear the brunt of any such taxes,” he said.