Haryana relief for builders
Times of India, February 05, 2009, page 3
NEW DELHI: Amid reports of private developers backing out of residential and commercial projects in the NCR, a worried Haryana government has announced flexible schemes for payment of licence fee for builders. It has also extended the licence validity period from two to four years.
The recession relief measures follow two months after private developers approached the state government for a bailout package in the light of both residential and commercial projects coming to a standstill in Gurgaon, Faridabad, Sonipat and Rohtak. Licence fee is one of the biggest revenue earners for the state exchequer.
According to officials of the town and country planning department (DTCP), which grants licences to projects, the government has not come out with any financial package despite demands from developers. The present package, besides extending validity of the licence period, has also doubled the licence renewal period from one to two years. This means developers will now get more time to start construction work and at the same time, the renewal fee will come down drastically.
Private developers as well as government agencies will now need to pay only 25% of the licence fee while applying for a licence. The rest will have to be deposited when the licence is granted. Earlier, the full amount had to be paid while applying.
The present licence fee for one acre of residential and commercial property in Gurgaon is Rs 2.5 crore and Rs 1 crore respectively.
In another move, the government has extended the repayment period of external development charges (EDC) of such projects. Now the payment can be made in five years, against the earlier limit of four years. The government had increased the EDC in Gurgaon from Rs 35 lakh to Rs 52 lakh per acre when the real estate sector was booming. But with the economic slowdown, the list of defaulters has increased significantly. Now the government has reduced the interest rate on repayment of EDC from 15% to 12%. Similarly, as a relief for defaulters, interest rate has been reduced to 15% from 18%.
A department official said the package also includes a moratorium on payment of revised enhancement fee for projects based on 2021 master plans in Gurgaon, Sonipat and Rohtak till July 10, 2009. "The department issued licences for projects in areas which were earlier not in the development plan. But in case of Gurgaon, Sonipat and Rohtak, many such areas have been included in master plans 2021 and hence charges have been enhanced,'' said the official.
Responding to plea of developers finding it difficult to pay the enhancement fee at one go, the government has relaxed the norm to four equal instalments at 9% interest.
Times of India, February 05, 2009, page 3
NEW DELHI: Amid reports of private developers backing out of residential and commercial projects in the NCR, a worried Haryana government has announced flexible schemes for payment of licence fee for builders. It has also extended the licence validity period from two to four years.
The recession relief measures follow two months after private developers approached the state government for a bailout package in the light of both residential and commercial projects coming to a standstill in Gurgaon, Faridabad, Sonipat and Rohtak. Licence fee is one of the biggest revenue earners for the state exchequer.
According to officials of the town and country planning department (DTCP), which grants licences to projects, the government has not come out with any financial package despite demands from developers. The present package, besides extending validity of the licence period, has also doubled the licence renewal period from one to two years. This means developers will now get more time to start construction work and at the same time, the renewal fee will come down drastically.
Private developers as well as government agencies will now need to pay only 25% of the licence fee while applying for a licence. The rest will have to be deposited when the licence is granted. Earlier, the full amount had to be paid while applying.
The present licence fee for one acre of residential and commercial property in Gurgaon is Rs 2.5 crore and Rs 1 crore respectively.
In another move, the government has extended the repayment period of external development charges (EDC) of such projects. Now the payment can be made in five years, against the earlier limit of four years. The government had increased the EDC in Gurgaon from Rs 35 lakh to Rs 52 lakh per acre when the real estate sector was booming. But with the economic slowdown, the list of defaulters has increased significantly. Now the government has reduced the interest rate on repayment of EDC from 15% to 12%. Similarly, as a relief for defaulters, interest rate has been reduced to 15% from 18%.
A department official said the package also includes a moratorium on payment of revised enhancement fee for projects based on 2021 master plans in Gurgaon, Sonipat and Rohtak till July 10, 2009. "The department issued licences for projects in areas which were earlier not in the development plan. But in case of Gurgaon, Sonipat and Rohtak, many such areas have been included in master plans 2021 and hence charges have been enhanced,'' said the official.
Responding to plea of developers finding it difficult to pay the enhancement fee at one go, the government has relaxed the norm to four equal instalments at 9% interest.
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