The state cabinet on Tuesday approved the decision to increase the rent of the government properties leased to private parties. All of these properties were leased before Independence, and the government earned poor revenue from them. Now, the lease duration will not be more than 30 years, and rent will be revised every five years.
This was the fourth time that the state government has taken the decision to raise the rent of leased plots in Mumbai city and suburbs. The new annual rent would be based on the price of land as per ready reckoner value as on January 1, 2012. “The state is expecting to earn hundreds of crores of rupees by implementing the decision,” said chief minister Prithviraj Chavan.
As many as 1,282 major properties in the island city and 295 properties in the suburbs have been leased for 50, 99 or 999 years. Many of these lease terms have actually expired, but their values have not been reviewed. The state has identified 517 out of 1,282 such properties in the island city and 149 out of 295 in the suburbs whose lease periods have already expired.
“Some have expired in the 1970s and 90s and amount of rent needs to be re-looked when they come for renewal. While in the Colaba area, the government gets a mere `17.71 as rent for a 570 sq metre land, for a 3,070 sq metre land, the rent is only `74.49 annually. This is unacceptable,” Mr Chavan said.
Now, the rent will be calculated in accordance with the HC directives that 75 per cent of value of the land will be of the occupant, while the state’s share would be 25 per cent. As per the example citied by the CM, a property ad measuring 570 sq metres at Colaba that was rented for monthly rent of `17.71 will now be charged `3.04 lakh annual rent.
In the past, the state government had thrice tried to get the rents updated. However, the decision was reverted as per the HC orders. “Now, we have considered all the legal aspects. We believe that the decision will stand any legal litigation,” said the CM.