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Hard realty of modern towns

After hike in power tariff, government plans to raise external development charges, reports Sanjeev K Ahuja.

india Updated: Dec 07, 2006 05:04 IST

Potential property buyers in Gurgaon and other towns of Haryana, be prepared to pay more to developers.

The state government plans to hike “external development charge (EDC),” a new tax it began charging from developers recently. The new tax is over several other taxes, including service tax, they have been paying the government over the years.

Developers, in turn, plan to recover it from property buyers.Finance Commissioner and Secretary (Town and Country Planning) Shakuntala Jakhu confirmed her department was working on a revised “EDC” but did not say by how much.

On why it was being hiked, Jakhu said, “Development activities are set to gather pace in Gurgaon and in other towns of the state.”

“Earlier, the cost of building certain facilities, including fire stations, and importing expensive fire-fighting equipment like snorkels were not recovered from “EDC,” but now we plan to recover their cost from developers.”

Now, as “EDC” the Haryana Government collects from developers — in the name of providing infrastructure such as roads, sewerage system, storm water drains, water channels and other community and civic facilities — Rs 20 lakh per acre for residential projects and Rs 96 lakh per acre for commercial projects.

The “EDCs”, introduced early this year, and all developers were asked to pay from Rs 200 to Rs 400 per square yard under it for all the licenses acquired by them since 1997. The rates are uniform all over the state. Shalini Wadhawa, DLF spokesperson, said it would be good if the money were spent on improving infrastructure. "But our experience has been bad. Government departments are sitting on crores of rupees collected from us in the 1980s. We are still to have an effective sewerage and storm water drainage system and good roads in DLF City," she said. It took HUDA 22 years to locate a landfill site in Gurgaon, claimed another developer.

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First Published: Dec 07, 2006 05:04 IST