GMDA proposes 1% cess on property transfers to fund ₹845 crore SPR project

Gurugram Metropolitan Development Authority (GMDA) has proposed imposing a 1% user charge in the form of duty on property transfers in sectors along the Southern Peripheral Road (SPR) to fund the project. The SPR project has been delayed due to funding issues, but GMDA said that the entire tendering process has been completed and the high-powered committee chaired by the chief minister will allot the contract soon. The cost of the project is INR8.45bn ($115m) and different modes of funding will be used. The authority said that 37 developing sectors are along the SPR and an estimated INR3.25bn can be collected in three years.

Gurugram: In a bid to mobilise funds for the Southern Peripheral Road project, whose work is likely to be allotted soon by a high-powered committee headed by chief minister Manohar Lal Khattar, the Gurugram Metropolitan Development Authority (GMDA) has proposed to impose 1% user charge in the form of duty on property transfers in sectors falling along the road for a period of three years.

Gurugram, India-April 02, 2023: GMDA will soon built the SPR road from Vatika chowk to National Highway-48, in Gurugram, India, on Sunday, 02 April 2023. (Photo by Parveen Kumar/Hindustan Times)(Pic to go with Abhishek's story)

As per the authority, there are 37 developing sectors along the SPR, and by imposing 1% user charge on property transfers, an estimated amount of ₹325 crore can be collected in three years, the authority said.

GMDA said that approval for different modes of funding for the detailed project report was granted by the chief minister on March 5, wherein arrangement of funds by the revenue department has also been outlined, a letter by the authority said.

The SPR project involves the construction of eight flyovers and expansion of the road from Ghata up to Kherki Daula at a cost of ₹845 crore, officials said.

The SPR redevelopment project has been delayed due to issues of funding, which the authority is now trying to fix by using different modes to finance the project.

According to the proposed upgradation plan of the SPR, the 12-km road will have a six-laned main carriageway. It will have three-metre-wide footpaths, a cycle track, and a green area. Drainage will also be upgraded to ensure that there is no waterlogging on the entire stretch.

The GMDA proposal said, “Funds to the tune of ₹389.32 crore from the total amount of ₹845.54 crore are proposed to be arranged by levying a duty on the transfer of immovable properties situated within the limits of the notified area in addition to the duty imposed under the Indian Stamp Act, 1899 (Central Act 2 of 1899). Such a charge is proposed to be imposed on sectors most benefitted by developing the SPR (i.e., all sectors falling between Sector 55 to 80 including sectors 48, 49 and 50 as per the Gurgaon-Manesar Urban Complex (GMUC)-2031”.

It further said that the bids for the work have already been invited and funds would be required urgently for the timely start of work and smooth implementation of the project. “Keeping in view of the matter, the proposal approved by the Haryana chief minister of imposing 1% user charge in form of duty on the transfer of immovable properties on sectors falling along the SPR for a period of three years from date of implementation of notification is submitted for perusal and forwarded to the revenue department”.

The authority further said that a mechanism will be devised to arrange funds amounting to ₹285 crore in coordination with the department of town and country planning (DTCP). “The authority will also utilise transfer of development charges, monetise land assets and other means to generate funds for the SPR project,” the senior official of the GMDA said.

As per section 43 of the GMDA Act, the authority may, for the purposes of recovering wholly or in part, any expenditure on any infrastructure development work or urban amenity provided or maintained by it, directly or indirectly under its authorisation, levy and collect a charge from the users of such infrastructure development work or urban amenity. “The chief executive officer may authorise or assign any person, company, board or any other agency, the collection of the user charge on such terms and conditions, as the CEO may, with the prior approval of the authority, determine.”

Hemant Chander Sharma, former president of Tulip Ivory residents’ welfare association (RWA), which is located close to the SPR said that residents have already paid the infrastructure development charges (IDC). “When the residents have already paid development charges, additional cess should not be imposed on them. No doubt the SPR project will greatly help the residents, but the financial burden on them is not fair,” he said.