Maharashtra government plans to reduce premiums, speed up approval for realty projects

To provide respite to the real estate sector which is currently taking a beating due to the Covid-19 lockdown, the state government has announced plans to reduce

To provide respite to the real estate sector which is currently taking a beating due to the Covid-19 lockdown, the state government has announced plans to reduce the tax and premiums on realty projects as well as speed up approval processes.

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State housing minister Jitendra Awhad on Tuesday said the state will take all steps to help the real estate sector. “The premiums will be reduced but how much will be decided later,” said Awhad, adding that the approval process needs to be expedited. “We are planning a system where all approvals are granted within one month. Even if there are some issues, provisional permission will be granted so that the work begins,” he added.

Builders had previously complained that the premiums charged by the local bodies, especially the Brihanmumbai Municipal Corporation (BMC), are too high and contribute to an increase in the final price of the apartment, which is ultimately borne by the homebuyer. Besides, it takes years to get approvals and these delays result in an exponential increase in the project cost. Successive governments have tried various methods to curtail the approval processing time but were unable to succeed much.

Builders and the housing activists have welcomed this latest move by the Maharashtra government.

Harish Jain, vice-president, BrihanMumbai Developers Association (BDA) said such measures are needed to lift the real estate sector which is currently in bad shape. “Such steps will help to kick-start the projects and also spur housing demand,” said Jain.

Housing activist Ramesh Prabhu, however, said that mere announcements will not be enough. “We need actual implementation and not mere slogans. The officials simply delay the process on flimsy grounds. Unless [decisive] steps are taken, the realty sector cannot be revived,” said Prabhu.

The real estate sector has been in a slowdown since the last few years. Builders raised their prices, forcing buyers to postpone purchase plans. Now, the Covid-19 lockdown has complicated matters further.

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A survey conducted by the Maharashtra Chambers of Housing Industry (MCHI-CREDAI) noted that 60% of builders expect business to get back to normal within nine to 12 months after the Covid-19 lockdown is lifted and 83% of respondents said they will continue with their real estate business. Around 45% said they are ready to acquire properties if the pricing is attractive.

The survey was based on responses of 500 builders who have projects in the Mumbai Metropolitan Region (MMR).