Maharashtra mulls 10% increase in ready reckoner for Greater Mumbai

Realty players fear it will further increase cost of homes and offices in already depressed market

Cash strapped Maharashtra government mulls 10% increase in ready recknor (RR) rates in Greater Mumbai and 14% in rest of the state.

The proposed revision will come into effect from April 1 as the government has discontinued the practice of changing RR rates from January 1 every year.

RR is an annual statement of rates based on which the stamps and registration department collects stamp duty from property buyers.

The present RR rates in Mumbai and the rest of Maharashtra range between 10% and 40% after they were revised on January 1, 2015.

The government's move to hike RR rates was confirmed by a team of officials from the state revenue department associated with the preparation of draft in this regard. Revenue department official told Business Standard, "A proposal has been prepared to hike RR rates in Greater Mumbai and rest of Maharashtra. The final decision will be taken after deliberations with the chief minister Devendra Fadnavis and the revenue minister Eknath Kahdse."

However, government's proposal evoked sharp reactions from the ruling and opposition parties and also from the realty sector.

BJP's ruling partner Shiv Sena said the government should not increase RR rates at this juncture especially when the realty sector is passing from difficult times. Sena legislator Anil Parab said, "The rise in RR rates will result in increase in prices of homes. In such a situation it will be difficult to implement Centre's policy of providing affordable housing to all by 2022," he noted.

Parab said his party will appeal to the state government not to increase RR rates from April 1.

The opposition Nationalist Congress Party spokesman Nawab Malik alleged that the government intention seems to be mobilization of revenue only. "RR rate revision should be market based prices. The proposed hike will increase prices of homes making it further dearer," he opined.

The Builders Association of India spokesperson Anand Gupta said any upward revision in the RR rates is not justified especially when there has not been any increase in the cost of land or constructed flats of offices.

"This apart, the Bombay HC order has recently banned all new construction activities in Greater Mumbai till the city civic body makes arrangement for sewage disposal. On top of it, realty players face various difficulties with regard to approvals and liquidity crisis. Artificially increase in the RR rates will further jeopardize the development of the realty sector," he added.