Cutting premiums paid by builders will impact BMC's revenues: Iqbal Singh Chahal

As the Maharashtra government asks Brihanmumbai Municipal Corporation (BMC) whether it would be likely to reduce the premiums paid by developers, BMC Commissioner Iqbal Singh Chahal responded that the cut in premiums paid by builders to the civic body will impact its revenues. 

The state government had earlier asked the BMC if it would be workable to reduce premiums paid by builders by 50 per cent and collect the rest post-project completion, as recommended by the Deepak Parekh committee. The government also asked the civic body could issue Occupation Certificate (OC) with only half of the premium and charges. 

Replying to this, the BMC chief ‘concurred’ the proposal to reduce premiums paid by the developers to the civic body and sad that the same will be cut if the state government allows it. However, Chahal said that the decision will “adversely impact” BMC’s revenue. 

According to a report published in Mumbai Mirror, Chahal in his letter dated October 1 wrote if the reduction is accepted by the government, it will adversely impact the revenue of the BMC.  

“The BMC gives concurrence for reduction in all premiums/charges/levies/cess/premium for staircase, lift well and lobbies, open space deficiency by 50 per cent under the Development Control and Promotion Regulations (DCPR) 2034, which is payable to the BMC as well as the state government for a period of one year up to December 31, 2021. The reduction factor for all premium/charges levied will be made on receipt of directions from the state government,” the letter quoted by Mumbai Mirror read. 

The BMC Commissioner’s letter was addressed to Bhushan Gagrani, Principal Secretary, Urban Development (UD). The premium from builders is one of the major sources of revenue for the BMC. 

Shiv Sena leader Yashwant Jadhav, who is also the Standing Committee Chairperson in the BMC, sought clarifications from the BMC chief on the implications of cutting the premiums paid by developers and suggested that the reduction of premiums should be given to those builders who make affordable homes. 

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