In a move that is set to send realty rates soaring further, Chief Minister Devendra Fadnavis will soon approve plans to increase the rates for fungible FSI paid by developers for their building projects.

According to CMO officials, the step has been taken with a view to increase the government’s depleting coffers.

The premium, that was until now charged as per cent of the 2008 ready reckoner (RR) rates, will now be linked to the 2015 RR rates.

According to developers, the move will lead to a doubling of the premium amount paid by them and the higher costs will have to be ultimately borne by home buyers.

Fungible FSI was introduced by former municipal commissioner Subodh Kumar in January 2012 with a view to capitalize on the extra FSI that projects were allowed to consume free-of-cost. These include areas such as balcony, flower-beds, terraces, niches and voids.

Accordingly, the BMC charges a premium at 60 per cent of the ready reckoner rates in exchange for allowing an additional 35 per cent FSI in residential projects. For industrial and commercial buildings, the rates are charged at 80 per cent and 100 per cent of the RR rates respectively with the fungible FSI allowed being 20 per cent. The BMC has, to date, collected Rs 6,000 crore as premium paid for fungible FSI.

“This decision will impact the balance sheets of developers drastically at a time when the liquidity situation is already so bad. The revision would increase the premium amount by 100 to 250 per cent. We will have no choice but to pass it on to buyers who will face the heat,” said Sunil Mantri, President of the industry body MCHI-CREDAI.

A recent notification issued by the CM-led Urban Development department, however, exempts all those projects that received an IOD-CC (initial building permissions) before the fungible FSI norms came into being.

Mantri, however, said that more than 80 per cent of the developers have converted their old projects under the fungible FSI regime, which means the new rates will affect almost all new projects in Mumbai.

mumbai.newsline@expressindia.com

📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines

For all the latest Mumbai News, download Indian Express App.