The City and Industrial Development Corporation (CIDCO) this month decided that it will issue provisional No Objection Certificates (NOCs) to developers who apply for additional Floor Area Ratio (FAR) for constructing their real estate projects in Navi Mumbai. The FAR is the ratio of a building’s total floor area to the area of the plot on which it is being constructed. The floor area of a building is the sum of the area of all the floors of the building (FAR= Gross floor area of the building/Gross area of the plot). The FAR is alternatively referred to as the ‘Floor Space Index’ (FSI).
How can the CIDCO grant NOCs in Navi Mumbai?
CIDCO is the planning authority which leases all land parcels in Navi Mumbai; all land parcels in Navi Mumbai are owned by CIDCO. The authority developed Navi Mumbai as a planned city. The planning jurisdictions of Navi Mumbai, Panvel and Uran all fall under CIDCO. Consequently, it has the power to alter the restrictions imposed upon developers who are constructing real estate projects in Navi Mumbai on land they have leased from CIDCO. The ‘Unified Development Control and Promotion Regulations’ (UDCPR) of 2020 governs the use of additional FSI across Maharashtra.
Why did CIDCO take this decision?
According to news reports, the Vice-Chairman and Managing Director of CIDCO, Dr. Sanjay Mukherjee, this decision was taken to boost the real estate sector in the city. CIDCO will also charge a premium from the developers after granting them provisional NOCs for consuming additional FSI.
Between March and August, 2020, property registrations reduced by nearly 70 percent in the entire state of Maharashtra owing to the lockdown imposed in the wake of the Covid-19 pandemic. To combat this, the government of Maharashtra then imposed a uniform stamp duty of 2 percent on property transactions till December 2020, before increasing it again to 3 percent in January, 2021. Property registrations saw a rise of nearly 30 percent between September and November, 2020, reaching nearly an eight-year high in the month of November. This trend continued till March, 2021; 10,136 deals were completed in April which were largely a spillover effect from the properties registered in the previous months.
Owing to this uptick in the real estate market, the Maharashtra government chose not to extend the stamp duty waiver. However, with the second wave of Covid-19 hitting the state, the real estate sector again witnessed a slowdown from April, 2021. Consequently, the Maharashtra government again revised its decision and chose to implement a 5 percent stamp duty on property registrations in the state. The other decision it made to boost the real estate sector was to provide provisional NOCs to developers for using additional FSI while developing their projects.
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