State loses out on crores in rent on prime plots: CAG | mumbai | Hindustan Times
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State loses out on crores in rent on prime plots: CAG

While you struggle to balance your budget, cutting down on visits to your favourite restaurant and thinking twice before you take the family shopping, the Maharashtra state government — which raised sales tax and stamp duty this year — is sitting on prime property worth hundreds of crores, which could have helped reduce your tax burden. Ketaki Ghoge reports.

mumbai Updated: Apr 08, 2012 01:23 IST
Ketaki Ghoge

While you struggle to balance your budget, cutting down on visits to your favourite restaurant and thinking twice before you take the family shopping, the Maharashtra state government — which raised sales tax and stamp duty this year — is sitting on prime property worth hundreds of crores, which could have helped reduce your tax burden.

In a city where rent rates are among the highest in the world, prime Mumbai plots that were leased out between 20 years and 99 years ago are still being used by private companies, who pay the state government rent that remains frozen, in some cases, at less than a paisa per square metre.

Worse still, some of these plots are now being redeveloped by these companies, with plush residential towers taking the place of mills and warehouses, earning the lessees hundreds of crores in profits.

This mismanagement of leasehold plots, some of them in premium locations such as Mahalaxmi and Worli, has emerged in a yet-to-be-tabled Comptroller and Auditor General (CAG) report.

“We are working on a separate policy for the city’s lease hold plots,” state revenue minister Balasaheb Thorat told HT. “It will decide renewal policy as well as policy to grant development rights to the old leases. It will ensure that the state gets its due.”