CREDAI-Pune Metro opposes hike in ready reckoner rates

Real estate developers say revision in rates has defeated purpose of extending stamp duty concession to home buyers

The Pune chapter of the Confederation of Real Estate Developers’ Associations of India (CREDAI) has protested the hike in ready reckoner (RR) rates announced by the Maharashtra government.

CREDAI-Pune Metro said it would create a negative impact on home buyers as the RR had allegedly nullified the impact of concession given in the stamp duty rates. At 3.91%, the revised RR rate for Pune is the highest among all districts in the State.

“The real estate sector has been a sluggish market for the last three to four years. This dire situation has been aggravated by the unprecedented COVID-19 pandemic. Even after five months, construction activities are still at a standstill,” said Suhas Merchant, president, CREDAI-Pune Metro.

Remarking that the real estate sector is a growth engine that contributed substantially to the country’s GDP by creating wealth and employment, he said that it required governmental support to survive and revive itself from the present economic slowdown.

‘Sector needs booster’

“Considering this fact, the State government has not revised the RR rates during the last two years. As there is no improvement in the situation, the sector needs a booster rather than this uncalled-for upward revision. The steep increase in the RR rates is ad hoc and has no scientific basis,” Mr. Merchant said.

The CREDAI-Pune Metro president further said that the government’s claim that the average increase in the RR rates was only 1.74 % was “utterly misleading” to the public. “The increase in upcoming areas of Pune has in fact been as high as 10%. This is because the land rates in residential places like Prabhat Road, Dhankawadi, Baner and Ghorpadi has been 8%. So the hike in RR rates has only shot up the prices further,” Mr. Merchant said.

With a number of peripheral areas, including 23 villages, recently merged into the Pune Municipal Corporation, rates of residential properties in the city had increased across the board in Pune’s developing areas, he pointed out.

‘No sale’

Mr. Ashwin Trimal, managing committee member, CREDAI-Pune Metro, observed that the rates in the old part of Pune city had remained unchanged because there was not much development, and hence no sale was happening in these areas.

“However, rates have shot up in areas where the Pradhan Mantri Awas Yojana initiative is being implemented, and flats are being purchased with subsidy from the government. Now, it will be more stressful for needy people to purchase such flats,” said Mr. Trimal.

He said the hike would affect flat buyers more because the RR rates had precisely soared in those areas where there was a possibility of flats being developed.

“This rise also appears illogical in certain cases as the land rates have not increased in proportion to the rates of flats. Hence, we can broadly conclude that the government is trying to nullify benefits given to home buyers by reducing the stamp duty with this increase in RR rates,” Mr. Trimal said, adding that the revision in rates had defeated the purpose of extending the stamp duty concession to home buyers.