Mumbai Devpt Fund

Ref: TOI Dt:02/07/2010

Twin levies will help garner Rs 1,000 cr annually: State

Debate Rages Over Special Charges Planned By Govt

Mumbai: The state government’s proposal to levy a betterment charge and impact fee is aimed at garnering a minimum of Rs 1,000 crore annually for transforming Mumbai into a world-class city, say officials. 
    On Wednesday, a team of senior bureaucrats, led by urban development secretary Manukumar Shrivastava, made a presentation before chief minister Ashok Chavan, explaining the logic behind the levies. “Our funds are limited. If Mumbaikars need better infrastructure, they should contribute for it. The money collected will be used exclusively for making the metropolis a better place to live in. It will be called the Mumbai development fund,’’ a senior official said. 
Betterment Charge 
    According to the official, if the administration provides state-of-the-art infrastructure in an area, it will have a direct bearing on realty rates. “Then if the owner sells his property, he gets more than the expected price. So we want the property owner to share a part of his profit or income for the development of infrastructure.’’ The official said rules would be formulated on how the authorities would go about collecting the charge. “If an infrastructure project is planned in a particular area, an ad will be published in the local newspapers. We will declare our intention to levy betterment charge and invite suggestions and objections. Only then, will we levy the charge. It will be less than 50% of the profit made by the seller. Betterment charge will be levied exclusively on transactions,’’ the official added. 
Impact fee 
    “In big cities, huge construction projects have been planned. However, no thought has been spared on the pressure on civic amenities. Impact fee will take care of it,’’ the official said. When a developer or builder submits his proposal for the construction of a tower to the civic authorities, he will be told to pay an impact fee. “For new constructions, the developer has to obtain a no-objection certificate from the ministry of environment and forests. On the same lines, we have proposed that for construction on 1 lakh-sq-ft and more areas, the developer will have to pay impact fee to the civic administration,’’ he said. The official made it clear that no timeframe had been fixed for implementing the proposal. “It will require an amendment to the Maharashtra Regional Town Planning Act, BMC Act and MMRDA Act. Once the proposal is approved by the chief minister, we will place it before the cabinet and later before the legislature for amending the laws,’’ he said. 
FOR ORDINARY MUMBAIKARS Betterment Charge | It will be less than 50% of the profit made by the seller and will be levied exclusively on transactions 
FOR DEVELOPERS Impact fee | For construction on 1 lakhsq-ft and more area, the developer will have to pay impact fee to the civic administration 
    No timeframe had been fixed for implementing the proposal