BMC to earn crores from revising 'this' policy

The Brihanmumbai Municipal Corporation has revised its Vacant Plot Leasing (VLT) policy. As a result plots less than 125 square meters in size are now allowed to be converted into leases for 30 years. These lands are expected to increase municipal income and create more development opportunities for lessees.

There are many plots located in Mumbai, Dadar and Matunga as well as other parts of Mumbai and western suburbs. Out of these only 610 plots will be converted under the new VLT policy. 

The potential value of these 610 plots is considerable which is estimated to be more than INR 2,000 crore. The municipal budget document presented on February 4 also said that the municipal corporation aims to earn about INR 2,000 crore in the form of one-time premium over the next four years. Tenants of VLT plots currently pay nominal rent. Sometimes the rent is as low as INR 30 to INR 100 per month. As per the revised policy, the premium charged by the civic body will be based on the cost of the land.

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According to a municipal official in the municipal estates department, the BMC will charge a premium of 62.5% of the land value for conversion into leasehold. The VLT policy was formulated a few decades back to address vacant municipal plots. Historically, these plots were leased out to various individuals on a lease basis, with minimal maintenance and at very low rental rates. 

Over the years, some of those plots were encroached or developed without municipal permission. This created a complicated situation. The BMC currently receives a total of INR 3.5 lakh per annum from the rent paid by the lessees. But after this decision, the civic body will have more control over these lands and they can get more income from it.