The Ahmedabad Urban Development Authority (Auda) has decided to hike the development charges by 20 times more than the existing rates.
According to experts, this, coupled with increased jantri rates, will result in a hefty rise in belongings prices in Auda areas around Ahmedabad city in the coming months.
Auda’s proposal to increase development charges for land and construction will be sent to the state government soon.
According to real estate experts, Ahmedabad Urban Development Authority or Ahmedabad Municipal Coproration’s development charges are levied based on the area of land and the size of construction when a construction plan is approved.
If the development charge is increased, it will have a direct impact on the project cost of the builders, and it will result in properties becoming more expensive.
Sources said Auda had suggested a rise in development charges to the state government five years ago. However, the state government did not take any decision on this proposal.
In its board meeting on Friday, Auda approved the proposal to cancel the old proposal and prepare a new one to be sent to the government. The new rates will likely be less than Rs 100 per sq m.
The Section 99 of the Gujarat Town Planning and Urban Development Act 1976 empowers the local authorities to levy development charges on land and construction within their jurisdiction.
According to Section 100 of this act, there is a provision to fix the maximum development charge.
According to the provision, the state government used to charge Rs 50,000 per hectare or Rs 5 per sq m of land and Rs 15 per sq m of construction.
Auda currently charges Rs 2 to Rs 5 for land and Rs 5 to Rs15 for construction, and the development fee varies according to the purpose of construction.
On July 28, 2017, the state government amended the law and allowed authorities to increase the development charge to a maximum of Rs 100 per sq m or Rs 10 lakh per hectare.
After this, Auda proposed new rates of development charges and sent a proposal to the state government on March 8, 2018.
The development charges rates were doubled in that proposal. However, the state government did not take any decision for five years.
Auda CEO D P Desai said, “Before deciding on the new development charge, a proposal will be sent to the government to withdraw our old proposal. The new development charge proposal will be placed in the next board meeting.”
According to sources, Auda, in its proposal, has stated it has collected an amount of Rs 30.55 crore as development charges in the last decade.
The authority has also alleged that according to rules, Ahmedabad Municipal Corporation must deposit development charges that it collects with Auda. However, AMC has not been doing so.