Housing, urban development generate least revenue for state

The state government’s revenue generation has taken a big hit in housing and urban development departments where the revenue figures are merely at around 1.9% and 3% respectively.

At a meeting convened by Chief Minister Devendra Fadnavis on Wednesday, measures such as redevelopment of BDD chawls and Bandra Government Colony were discussed as possible solutions to the problem.

“The housing department was expected to fetch revenue of Rs 1,067 crore. Their revenue till the end of August 2015 is only Rs19.86 crore. The urban development department was expected to bring over Rs 5,000 crore to the exchequer, where the revenue figures till the end of August were Rs 173 crore. Transport department too has achieved just around 50% of its target,” finance minister Sudhir Mungantiwar told FPJ.

This was primarily due to sluggish real estate markets, he said, adding that long pending redevelopment projects were discussed as a measure to achieve revenue targets. The government would also check whether buy-back is possible in case of Mumbai-Pune toll collection contract, he added.

“Sales tax is the government’s prime revenue earner, where the state could collect only around Rs 38,000 crore instead of targeted Rs 74,616 crore, in the first six months. Fall in global crude prices also swept the state government’s revenue by Rs 1800 crore in sales tax,” the minister said.

“The situation is not all that gloomy. We are confident we shall be able to overcome it. We have decided to meet every week to review the targets vis-a-vis achievements of the prime revenue earner departments,” Mungantiwar added.

The BDD chawls are 207 buildings over 93 acres of land across Worli, Naigaon, NM Joshi Marg and Sewri. Constructed during 1921 t0 1925, the buildings need urgent redevelopment. The Public Works Department had spent a whopping Rs 140 crore in past seven years to repair, maintain and clean up the buildings. But the residents are opposing the redevelopment project at the prime location that could add around Rs 2,500 crore to the state exchequer.

Similar is the case with Bandra Government Colony, where around 250 towers are expected to come up after redevelopment, the project is stuck over the choice of the development agency. During the previous UPA government, the project was to be entrusted with private builders, while now the MMRDA might be preferred.

The state intends to cut down expenditure and may announce amnesty schemes to increase tax revenues apart from vigorously following the central government for more funds, the finance minister said.