Maharashtra move to cut construction premiums to lower project costs by 17%

However, developers peg the benefit at 6 to 7 per cent after passing on stamp duty costs to buyers

The Maharashtra government’s decision on Wednesday to reduce construction premiums and levies by 50 per cent till December 31 could result in savings of 12-17 per cent in project costs, said analysts.

At present, the various floor space index (FSI) premiums/fungible FSI and payments for other concessions account for 25-33 per cent of the overall project cost (including land). The waiver may result in a 12-17 per cent saving on this, said Adhidev Chattopadhyay, an analyst with ICICI Securities.

FSI defines the extent of construction permitted on a plot of land. “We await the fine print on the exact nature and terms