The Urban Development Department announced cess relief for ongoing real estate projects in Mumbai.

By Abhay Shah, Realty Quarter

The concessions in development cess and premiums announced by the state government can not be used on real estate projects which are ongoing in the city.

On Wednesday, the Department of Urban Development published its notice of the relief under section 154 of the Maharashtra Regional Town Planning Act dated August 20. Coming into effect instantly, they will be in force for two years.

“Imagine my shock when my architect called me this morning’s from the building proposal office to tell me the concessions are not applicable to ongoing projects,” a developer from south Mumbai said.

He said that he had given Rs 1 crore of the Rs 4.5 crore that he owed to BMC and that because of of the credit crunch he could not manage to pay the remaining amount. “Rs 1.1 crore would have been saved from the concessions. Today my architect went to pay the balance, but the agent of the BMC denied,” he said.

A Maharashtra Chamber of Housing Industry (MCHI) representative — The Confederation of Real Estate Developers Association (Credai) said that they were quite categorical about seeking concessions for ongoing projects to give the builders much-needed relief. Ongoing projects are stuck due to high cesses and premiums. “MCHI-Credai is going to write a clarification to the municipal commissioner,” he said.

Municipal Commissioner Pravin Pardeshi stated: “We are going to review this.” A senior UDD officer said: “Is that part of the proposed MCGM? If it were, I’m sure; if not, I’m going to verify.

The city development department was squarely blamed for misunderstanding by a senior municipal official on condition of anonymity. “Our letter to the department mentions only what concessions can be granted for two years. We did not tell them who can and cannot be given the concessions. The Department is present for all the conferences and knows what the Real Estate Department is demanding,” he said.

One architect and member of the Association of Practice Engineers, Architects and Town Planners Association (Peata) said: “We are so used to the casual approach of the urban development department over the last 3 years that we do not expect any correct governmental resolution. A simple comma changes the entire meaning of many regulations but the department is very casual about it,” he said.