Surcharge, hike in RR to hit realty market, say builders

It has been a gloomy week for the real estate sector, after the Brihanmumbai Municipal Corporation (BMC) in its budget this week proposed a surcharge of 1% to fund its infrastructure project, while the state government increased the ready reckoner (RR) rates by 3.95%.

The sector had been facing massive recession, with the drastic drop in the sales over the last few months post the currency ban.

While the sector had slowly begun recuperating, the state’s moves have made things dismal again, said builders.

Bhavesh Sanghrajka, chairman and managing director, Shraddha Lifescapes, said that such taxes are burdening the realty market.

“The real estate market already is going through a challenging period. It is unfortunate that we are being saddled with additional taxes,” said Sanghrajka.

According to Samantak Das, chief economist and national director, research, Knight Frank India, a real estate consultancy firm, the hikes are unwarranted.

“These hikes have the potential to play spoilsport especially when there are some signs of recovery in the realty market. Home buyers have been returning, but if these hikes are implemented, it will only have a negative impact on the market,” warned Das.

Both the BMC and the state government have defended the hike, saying they need the money to carry out development related work.

“The RR hike has been minimal at 3.95 %. The collection of the stamp duty and registration was about Rs3,500 crore below our target in 2016-17, and even the current year is expected to be bleak,” said a state government official, who did not wish to be named.

“Keeping this in mind, we have tried to keep the hike as low as possible. The entire realty market was surveyed and transactions were studied in detail in the last one year, and hence a moderate figure was arrived at,” added the state official.

Housing activists warned that the ultimate sufferer is the buyer.

“The builder puts the entire burden on the buyer, who has to shell out the entire cost. The affordability is lost in the process,” said Ramesh Prabhu, chairman, Maharashtra Societies Welfare Association.

The Opposition has dared the Shiv Sena to join the Sangharsh Yatra, the statewide week-long march that began last week, demanding a complete loan waiver for farmers. It has also asked the party to clear its stand on the entire issue and why it backed out after teaming up with them on the issue initially.

The seven opposition parties in the state have joined hands to take on the BJP on the issue of loan waiver. They started a 1,500-km protest rally by boycotting the ongoing state Assembly and are interacting with farmers. The rally started from Chandrapur in eastern Maharashtra on March 29, and will culminate in Panvel, near Mumbai on April 4. The Opposition claimed that it has been receiving good response from the villagers.

“The Shiv Sena has been claiming to be in favour of the loan waiver. Party’s legislators had joined hands with us in the legislature in the first two weeks of the budget session, but now they have changed their stand. Shiv Sena leaders had been saying that their resignations are ready and will be submitted if the loan waiver was not given. My question to the Sena, is what are they waiting for? If the Sena still is firm on the demand, party chief Uddhav Thackeray should join our Sangharsh Yatra immediately,” said Radhakrishna Vikhe Patil, leader of opposition in the state assembly.

Ashok Chavan, Congress state unit chief, called the Bjpled government worse than the Nizam rule. While addressing a public meeting in Osmanabad and Latur, Chavan said, “The failed policies of the government have destroyed farmers and forced them to go on strike for the first time in history.”

The call over Opposition’s boycott in the lower house dur ing the ongoing budget session will be taken on Wednesday morning.

The Opposition has boy cotted the proceedings after 19 MLAS were suspended on March 22 for their unruly behaviour during the budge presentation.

Though the suspension o nine of them has been with drawn on Saturday, the Opposi tion is likely to continue boy cotting for the remaining period of the session.