Real estate slack affects Pune civic body’s coffers; revenue down by Rs133.84 cr in last four years
In the year 2015-16, the civic body generated a Rs 788.37 crore which has gone down to Rs 654.53 crore in 2018-19Updated: Nov 09, 2019 16:29 IST
The slowdown in the real estate sector has not only affected business for developers but, also the Pune Municipal Corporation’s (PMC) treasury.
A study of data from over five years from PMC’s building development department shows that in four years, starting from 2015-16 till 2018-19, revenue generated from building permits development has gone down by Rs 133.84 crore.
In the year 2015-16, the civic body generated a Rs 788.37 crore which has gone down to Rs 654.53 crore in 2018-19.
Data analysis of revenue generated from building permits in the past five years shows that in the year 2015-16 the civic body generated a Rs 788.37 crore which came down to Rs 532.97 crore the following year.
It started rising slightly the following year (Rs 579.34 crore) and in 2018-19 the civic body generated Rs 654.53 crore which is less by Rs 133.84 crore as compared to 2015-16.
As of the current financial year, the civic body has generated a revenue of Rs 402.01 from April 1, 2019, to October 31, 2019.
With a decrease in revenue within the city, the civic body is now looking at generating more sources of revenue like slashing discounts in property taxes and marking pay and park zones in the city.
Rubal Agrawal, PMC’s additional municipal commissioner, said, “The building permit charges are based on real estate sector. PMC is focusing on increasing revenue and will not take any steps which will lead to a loss of revenue for the civic body.”
A senior official from the building permit department on condition of anonymity said, “The number of applications coming to the civic body has also gone down in the past few years but, since this is dependent on the market, there is little that the civic body can do. However, it is also true that a major chunk of the civic body’s revenue comes from this department.”
Suhas Merchant, president, Confederation of Real Estate Developers Association of India (CREDAI), Pune Metro, is positive that the real estate sector will boom post this Diwali period.
He said, “Authorities should approve the building plan in a specific period. The relatively non-complicated projects like affordable housing should get a single-window clearance. Also, the developers should be able to receive the NA certificate from the district collector in stipulated time.”
“State government can help by lowering the premium charges applied to the developers- like development charges, fire premium among others. Also, the suitable instalment payment facility should be introduced to pay these charges. Mumbai Municipal Corporation has such a facility in place where developers pay the charges in stages. Given this support, the real estate sector will surely see more movement in the coming days,” he added.
The civic body is largely dependent on the revenue generated from the city since the abolition of local body tax (LBT), which are property tax charges which is imposed on the existing property for the services provided by the civic body and the building permits charges which is imposed by the PMC on new projects to ensure that construction within PMC limits meet all the laws and standards of the civic body.