Bail us out, Mr CM: Builders

In a desperate move, the Maharashtra Chamber of Housing Industry turns to Chief Minister Ashok Chavan for help. But, cheaper homes are still a long way off

Bail us out, Mr CM: Builders

In a desperate move, the Maharashtra Chamber of Housing Industry turns to Chief Minister Ashok Chavan for help. But, cheaper homes are still a long way off

Builders are losing sleep because of the slump in the realty market. Despite offering a number of incentives, they've failed to attract buyers. The ongoing economic slowdown has made matters worse.

Seeing no other alternative to boost their dwindling fortunes, the builders have written to Chief Minister Ashok Chavan and asked him to bail them out of the crisis.
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However, for people desperate to buy a roof, waiting for prices to slide,u00a0 the wait will be longer, as builders are not ready to reduce prices and now, hoping for an answer from the government.

The Maharashtra Chambers of Housing Industry (MCHI) sent a letter (a copy of which is with MiD DAY) to Chavan on February 5. The letter asks him to consider 15 suggestions that may result in brisk business for the real estate industry.

Sunil Mantri, president-elect, MCHI, confirmed that a letter with the subject 'Stimulus package for the real estate sector' has been sent to Chavan. The letter states that the real estate industry is passing through its "worst time in history".

Some Suggestions:

Slash exorbitant property taxes

Remove VAT with immediate effect

0.33 FSI rates to be slashed by 50% for Mumbai since TDR has come down so heavily

Stamp duty for houses below 1,250 sq ft to be reduced by 50%

Sanction of building permission plan from BMC should be based on carpet area

"The real estate sector needs incentives. The market situation is very bad. If the government sanctions our suggestions, not only will it benefit the real estate sector, it will also be of immense help to other associated sectors," said Mantri.

The letter states that several projects are stalled and development on projects have been stopped. It mentions that buyers are not coming forward due to heavy transaction costs such as VAT, service tax and stamp duty registration.

It has urged the state government for the immediate removal of VAT, discounts on municipal taxes, development charges, reduction in stamp duty and that the processing and sanction fees as levied by the BMC be brought down by 50 per cent.

The builders say that these costs have affected construction labourers. They claim that 15 lakh workers may lose their jobs since there is no work. The MCHI has requested the chief minister to intervene quickly and prevent such a situation.

But when Mantri was asked why builders aren't reducing prices further to attract buyers, he defended saying, "The rates have been substantially reduced."

However, a market insider said, "Builders have all the money to party in Macau and hold extravagant exhibitions. They don't want to let go of their money and are seeking the government's help to improve their business.

All problems related to the real estate sector will come to an end if the builders reduce their prices." Chavan is out of the city and could not be reached for comment.