No property tax hike for homes less than 500 sq ft in Mumbai: Hindustan Times

The property taxes of 16.89 lakh homes in the city will not be hiked for the next five years, with the state cabinet on Wednesday approving a proposal to protect owners of properties less than 500 sq ft from any increase. “These properties had been protected from an increase till April 2015, after which their taxes would have gone up manifold. Wednesday’s decision will ensure these smaller properties remain protected for the next five years,” chief minister Devendra Fadnavis said.

While the move comes as relief for small home owners, it is also being viewed as a political decision by the Fadnavis-led cabinet, with an eye on the BMC polls, as this order has overturned a decision taken by the Sena-controlled civic body in March.

The civic body’s standing committee, where the Sena has majority, had approved imposing the capital value-based property tax system on smaller residential properties, instead of the current system, where the tax is based on the properties’ rental values. The shift from the rental to capital value-based system would have increased the property tax by up to 40%.

While the BMC has not carried out a detailed study on the impact of such a decision, the property tax paid by smaller houses in the island city would have gone up, as their rents are paltry – dictated by the Maharashtra rent control act, 1999.

Wednesday’s decision, therefore, will be a big relief for such properties.

The announcement comes a day after a delegation of city Bharatiya Janata Party (BJP) leaders met Fadnavis to demand that the hike be called off.

However, some owners may not benefit from the cabinet’s decision. “There are many properties whose owners pay higher rents because the space is situated in prime localities. These properties would have paid lower taxes had the new system been introduced,” said an official, not wishing to be named.

The civic body too will be affected by the move. Sources in the BMC said they are looking at losses of Rs150 crore annually.

While introducing the new capital value-based system, the BMC had decided to tax all properties under the new system, but the then Congress-Nationalist Congress Party (NCP) government decided to exempt homes with less than 500 sqft carpet area for five years. This exemption had ended on March 31, 2015.

Muslim woman denied flat in Mumbai: Times of India

MUMBAI: A young Muslim woman says she was harassed and threatened by a Mumbai broker who attempted to prevent her from moving into a flat on grounds of religion. Her case has now been sent to the National Commission for Minorities. 

Misbah Qadri, a media professional from Gujarat currently working in Mumbai, was house-hunting a few weeks ago when she came across a post on social media of two girls seeking a flatmate. She got in touch with the girls and was all set to move into the flat. 

"A few hours before I was to move in, I received a call from the broker saying I could not live there as I was Muslim," says Qadri, who tried reasoning with him that this was unfair. Finally, she was told that she would have to sign a no-objection certificate saying that if she did move in, she would not hold the broker, owner or builder responsible for any harassment she may face. She asked him what sort of harassment she could possibly face for being Muslim. 

She ignored the broker's attempts at preventing her from moving into the flat, and did so nonetheless. However, she says the broker continued to harass her, and even threatened to throw her belongings out of the house if she did not vacate the premises. 

Eventually, both Qadri and her two Hindu flatmates were forced to leave the house.

Ease of doing biz? Software flaw in BMC hits building plans: Times of India

MUMBAI: As part of its 'ease of doing business' policy, the BMC early this month made it mandatory for the construction industry to submit building proposals online.

But glitches due to an outdated software supplied to the BMC by a private contractor have left builders and architects fuming. They complain the system does not work because the software is not user-friendly and not been updated to support changes made in the development control rules over the past two years. Even plans, which are prima facie wrong, are shown as approvable by the software, said architects.

Municipal commissioner Ajoy Mehta admitted the online system supports barely 15% of a building proposal. "More work needs to be done. Our aim now is to bring a certain level of predictability in building permissions," he told TOI on Wednesday. Mehta said proposals are, however, being approved manually.

The city's leading architects' association, PEATA, will meet Mehta to rectify the system. They alleged that unscrupulous ward level staff is using this as an excuse to delay permissions and knock out money from builders.

On May 16, the chief engineer of the civic development plan department issued an ultimatum to zonal offices to ensure all proposals are accepted only through a single window application online system. The directive said that from May 18, only those proposals processed through this system should be accepted. But architects said the automation envisaged by the BMC is not happening; on the contrary, proposals are getting delayed because the software is cumbersome. "None of the sub-engineers of the building proposal department are comfortable with it," they said.

Last April, TOI reported about the BMC's attempt to streamline its notorious building proposal department from mid-May by curtailing permissions a developer needs to obtain building approvals and commencement certificate.

A 21-page circular issued by the then civic chief Sitaram Kunte directed the development plan department to begin "auto scrutiny" and online single window application of building proposals.

"The main focus is to simplify the construction permit process and reduce the time by eliminating avoidable procedures. It envisages a reduction in procedures involved in interdepartmental clearances and stages by about 50% and reduction of time byabout 60%. It also envisages an IT-enabled system for a single window clearance as a long-term solution," said the circular.

The World Bank's 2014 report on 'Dealing with Construction Permits' ranks India 184th out of 189 countries. The report states it takes 27 steps and 162 days to obtain a construction permit in Greater Mumbai. It adds that the cost of construction permit in the city is 46.05% of the total cost of construction.

‘Don’t merely correct DP errors, make holistic plan’: Times of India

MUMBAI: A group of campaigners and experts met on Wednesday evening to discuss the issues that they wanted the revised draft Development Plan (DP) 2034 to address.

The public meeting conducted by the Urban Design Research Institute was held at the Chhatrapati Shivaji Maharaj Vastu Sangrahalay auditorium in Fort.

Pankaj Joshi, executive director of UDRI, pointed that there was active engagement by citizens in the draft DP 2034. "The BMC was open to suggestions, however, it did not reflect in the Proposed Land Use (PLU) plan. This disconnect cannot be understood. Besides the DP 2034 draft published in February spoke about how the authorities aimed at a competitive, sustainable and inclusive plan but this too did not reflect in the proposal," said Joshi. "Out of the total 450 sq km space of the city, almost three-fourths of it has been left out with the authorities claiming that it is out of their scope. This gave the impression that the authorities were preparing the DP 2034 only for a certain section of the city," he added. "The informal sectors of the city are completely missing. Besides there are roads being shown cutting from gaothons and people's buildings. A plan, as such, if it had gone through would have affected a large majority of people," said Joshi. The draft DP 2034 has not been scrapped by the government, the civic body has been tasked with revising it.

A civic activist present at the meeting said, "If the entire city is not considered it would only lead to litigation in the future."

Former civic body chief D M Sukhtankar, who was also present for the session, said that a presentation needs to be made to the authorities. "The planners need to be sensitized to the issues raised in this meeting," he said.

Govt to privatise 8 "sick" ITDC hotels, will retain Ashok: Times of India

NEW DELHI: Government will soon privatise eight loss-making hotels run by India Tourism Development Corporation (ITDC) as it plans to "offload" all the sick units, Tourism Minister Mahesh Sharma said. 

"We propose that all our sick units need to be offloaded. Out of 16 hotels, eight are in very bad shape and we propose to disinvest it in the very first phase. It is not wise to bear the burden of these loss-making units," Sharma said.

"The ball has started rolling," he said, adding that the formal process should begin within two months. 

However, he ruled out the possibility of selling off 'The Ashok', the flagship property of ITDC in the capital. 

"Ashok will not be on the block. We are trying to revamp it and this year we will make it a profitable venture," the Tourism Minister said. 

The Ashok alone incurred a loss of about Rs 13 crore in 2014-15, while other ITDC hotels together ran up losses of about Rs 15 crore. 

Currently ITDC, a PSU under the Tourism Ministry, runs 16 hotels including three in Delhi and the rest in Jammu, Ranchi, Bhubaneswar, Puri, Patna, Bhopal, Bharatpur, Jaipur, Guwahati, Pondicherry, Mysore and Itanagar. 

The eight hotels which are likely to go under the hammer include those at Jaipur, Bhubaneswar, Puri, Jammu, Guwahati, Ranchi, Pondicherry and the Lalitha Mahal hotel in Mysore, all of which are loss-making. 

The minister said whether the privatisation will be through joint venture or giving the operation and management to private players on a lease or any other modes was yet to be decided. 

To a question on how much money the government expected from the disinvestment of ITDC properties, Sharma said, "It is not possible to say now. A proposal will be sent to the Cabinet and the mode of disinvestment will be decided." 

During NDA's first stint in power between 1999 and 2004, the then Vajpayee government had divested 18 ITDC hotels, bringing down the number of state-run hotels from 34 to 16. 

Besides, the network of hotels, ITDC also runs 11 transport units, nine duty-free shops at airports and seaports.

State to simplify revamp of 3K buildings on collector's land: Hindustan Times

Mumbai, May 28 -- The state government has offered a glimmer of hope to residents of about 3,000 dilapidated buildings on land owned by the suburban collectorate.

Most of these buildings - allotted by the suburban collector in the '60s and '70s - have fallen into disrepair as it is virtually impossible to get a noobjection certificate (NoC) for their maintenance and repairs.

As a result, builders have long shied away from these buildings. Now, however, there may be some hope for their 10 lakh residents, many of whom l ive in fear of their homes crumbling at any time.

BJP MP Poonam Mahajan, who has been agitating on this issue for some time, met chief minister Devendra Fadnavis on Tuesday.

She said, "The chief minister has taken a posit...

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Mumbai's size will double in 23 years: Expert: DNA

The world is getting urbanised and it will not stop. Mumbai is growing by an annual rate of 3.09 per cent and in another 23 years, its size will double. This is what senior urban planner at the World Bank, Pedro B Ortiz, said at a recent conference on Sustainable Urbanisation and World Cities.

Similarly, Pune is increasing at a rate of 11 per cent and in another seven years its size will double.

As India and particularly Mumbai Metropolitan Region is in a transitional stage, Ortiz said the future development plan needs to be sectorial or in the form of sectors. "There should be plan of plans," said Ortiz.

The Brihanmumbai Municipal Corporation (BMC) is in the process of coming up with a revised Development Plan, whereas the Mumbai Metropolitan Region Development Authority (MMRDA) is working on third regional plan for the Mumbai Metropolitan Region.

Talking about the issues with implementation of projects, which is part of urbanisation, and budgetary allocations getting lapsed due to non-utilisation of funds, UPS Madan, Metropolitan Commissioner of MMRDA, said, "At the end of the year, not all the funds or budget is used due to wrong planning and other reasons, be it political or administrative. There are also factors during the course of implementation that delays any projects."

Instead of completing the project in three years, it takes longer and thereby budget allocated for a project not getting utilised by the end of the financial year. Therefore, at times the budgetary allocation exercise also is not proper enough.

RBI likely to cut policy rates by 0.25% on June 2: Citi: Business Standard

The Reserve Bank is likely to cut policy rates by 0.25 per cent in its upcoming policy review meet next week, a Citigroup report said today.

According to the global financial services major, there is a strong case for 25 basis points (bps) cut in interest rates, especially since macroeconomic data such as PMI and IIP, non-oil exports and credit growth has not been encouraging.

"Following status quo in the April meeting, we expect RBI to cut policy rates by 25 basis points in its upcoming June 2 meeting (from 7.5 per cent to 7.25 per cent)," Citigroup India Economist Anurag Jha said in a research note.

The report pointed out that since the April policy, lending rates have softened by 15-25 bps.

Despite unseasonal rains, the CPI inflation continued to undershoot RBI's projected trajectory and there has also been supply-side reforms.

"We expect RBI to resume its easing cycle in the June 2 policy with a 25 bps cut," Citigroup said, adding that given the ongoing trends of structural reforms coupled with cyclical easing of monetary policy and range-bound commodity prices, growth is likely to revive to 8 per cent in next fiscal.

The central bank has lowered its policy rate twice so far in 2015, but maintained a status quo in its last monetary policy review on April 7 on fears of unseasonal rains impacting food prices.

The next review meeting is scheduled on June 2, although the previous two cuts have taken place outside the scheduled policy reviews.

The report further noted that though this rate action is widely expected, the policy will be keenly watched for areas where there is not as much of a consensus like -- forward guidance and transmission.

RBI must revise sectorial exposure for easier funding for infrastructure: Business Standard

After a prolonged period of price volatility, the prevailing political stability combined with a strong governance has ushered in a price stability both at Wholesale Price Index (WPI) and Consumer Price Index (CPI) levels.

Owing to this, monetary policy controlled market price stability, may not be a necessity in the near term. At the same time the country has capacities idling in majority of the manufacturing sector varying between 15 per cent and 50 per cent of their installed base. Perking up the consumption rate is the only way to accelerate capacity utilisation, which would eventually necessitate further capacity creation. We have to work on the assumption that the growing population in India, almost at the rate of 20 million per year, and the rapid urbanisation underway will need multiplication of the existing capacity in every commodity, consumable, durable and infrastructure. This will also fulfil the dire need of our nation to provide gainful employment to the largest emerging workforce of the world.

The Reserve Bank of India (RBI) being the pivotal fulcrum of the financial nervous system of the country's governance process has a prime responsibility to lay down and articulate the policy guidelines that clarifies the direction in which the Indian economy will be guided to advance.

Making capital available at globally competitive rates and ensuring currency stability to attract foreign investments are the minimum expectations we have from the policy guidelines that are going to be announced by the Governor in the coming week. We are certainly with him in setting stronger guidelines and stipulations to protect the bank lending from turning into non-performing assets.

But a revision in the sectorial allocation will be a necessity to make capital available for segments like power, oil & gas, cement, steel, roads and other infrastructure to turn the economy around. I am confident that we have at the helm of RBI an elevated thinker who take cognisance of this in making India march forward.

The author is managing director and chief executive officer at Thermax. The views expressed are personal.

Realtors wary of service tax rate hike, say move will make properties costlier: The Economic Times

NEW DELHI: Real estate developers said the increase in service tax rate to 14 per cent from 12.36 per cent being enforced from June 1 does not bode well for the industry which is struggling to revive amid lukewarm demand and oversupply.

"The Indian economy has not done well in the last three-four years. The saving and income levels of potential homebuyers are already at the lowest level. The government should have waited till the economy recovered," said Navin Raheja, chairman, National Real Estate Development Council (NAREDCO) and managing director of Raheja Developers.

From next month, the effective service tax rate on real estate will increase to 3.5 per cent from 3.09 per cent at present on properties costing up to Rs 1 crore while it will go up to 4.20 per cent from 3.71 per cent on properties costing more than that. As a result, for a Rs 25 lakh home, the buyer will have to pay Rs 10,250 more while those buying a Rs 2-crore home will have to pay an additional Rs 98,000.

The government should have given the industry more time to recover before rushing to impose the new service tax rate, developers said. Raheja said the biggest problem faced by the industry is the multiple tax regime, which is expected to become history when the Goods and Service Tax (GST) is implemented.

"When the GST is expected to be passed soon, why was the government in a hurry to enhance service tax? It should have waited till the GST bill is passed and implemented," he said.

Home sales have slowed in the past two years, especially in Delhi-National Capital Region, and inventory levels have risen to the highest level ever in the country.

With the increase in service tax, some builders will have no option to offer some discounts to woo buyers and suffer losses in the process, said Deepak Kapoor, president of Confederation of Real Estate Developers' Associations of India (CREDAI) Western UP chapter. "This is despite the fact that the service tax hike will push up prices of raw material for construction," he said.

Vikas Bhasin, managing director of Saya Homes, said under-construction projects will see an increase in prices. "From June onwards, the demand will surely get negatively affected as it will be hard for customers to bear the extra burden," he said. Although the increase in tax rate applies to all services, the real estate industry will be specially affected, said Prithvi Raj Kasana, managing director of Morpheus Group. This is because real estate calls for big-ticket investment commitment from the buyers.

Rupesh Gupta, director, JM Housing said the impact of higher service tax will not only be on the basic selling price of a property but on other aspects as well such as PLC, club membership, legal fees, insurance and others.

"This incremental value will increase the overall price of the unit which will be borne by the customer only," he said.