Proposed reduction in premium for real estate projects by BMC

The BrihanMumbai Municipal Corporation (BMC) has proposed reduction in premiums, which will make several stalled and delayed real estate projects viable. The industry as also stakeholders in Mumbai’s real estate welcome the move, and hope the state cabinet gives due permission for the same.”

Mumbai Municipal Commissioner I S Chahal said all the eight political party group leaders in the BMC expressed support for a 50 per cent reduction in premiums, cess and levies for real estate. “It is a move expected to meet the urgent need for economic activity and generating employment,”

The move follows the report by the Deepak Parekh committee, which said premiums and charges in Mumbai are significantly higher than other comparable cities. “This results in deep inefficiencies and increased working capital requirements in a market where lenders are risk-averse and reluctant to fund real estate development,” he pointed out, adding that estimates place these costs (premiums, cess, levies etc) as comprising 30 per cent of project cost, which impacts project viability.