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Rediff News  All News  » Business » Bengal: Realtors wait for new regime

Bengal: Realtors wait for new regime

June 07, 2010 09:44 IST

TMC and CPI-M symbolsWith the Left Front losing the mandate in the Kolkata Municipal Corporation elections, city real estate developers are keenly awaiting Mamata Banerjee's policies towards the development of city infrastructure.

Interestingly, KMC for the last five-six years, had been earning money by selling land to developers in prime locations through the bidding process.

According to sources, KMC still possess pieces of land in plush locations such as EM Bypass, by far the most expensive area in the city.

In fact, back in 2006-07, KMC had earned about Rs 629 crore (Rs 6.29 billion), just from three land deals.

DLF Hilton, Emmar MGF and LIC were the winners in land bidding process, with LIC setting a record by paying Rs 55.24 crore per acre for a 5-acre plot on the road.

"There are still land in possession of KMC on EM Bypass, and we hope that they start bidding process for the land in a more transparent and expeditious manner soon," said a realtor.

However, in the new KMC regime also, the developers are not clear if there will be more transparency in land dealings.

"No one can say that if the land deals will be more transparent," said a prominent city based developer.

"The new KMC regime is expected to form an advisory group for land dealings, though the group will not have any legal binding. The mayor is expected to listen to the recommendations of the group," said Santosh Rungta, President, Confederation of Real Estate Developers Association of India.

It was not only KMC that had been selling land at exorbitant prices, but the two other government agencies, the the Kolkata Metropolitan Development Authority and West Bengal Housing Board, had earned through land deals.

"We are quite positive about the new regime in the KMC, and have lots of expectations," said Pradeep Chopra of P S Group.

One of the impending issues before the KMC has been the adoption on unitary method of taxation.

While many state governments have replaced the old system, West Bengal has been lagging behind, although the KMC had appointed a consultant for bringing in the new system.

The new system of taxation was expected to come into effect by the financial year 2010-11.

"At present, 56 per cent of the total rental is paid to the municipality as tax. Out of the rest, 33 per cent is paid to the income tax department. About 10.50 per cent is service tax. This kind of taxation is there no where in the world," said Rungta.

"We expect the new tax system to come into effect soon, as the old system is an outdated one," said Chopra.

"The unitary system of tax collection will help the real estate industry to a great extent, as it will reduce complexities and increase revenue for the government as well.

"The old system is outdated and an inspector raj regime," said Pradeep Sureka of the Sureka Group.

This apart, realtors are looking opportunities in areas like slum development, and expect the problems of waterlogging to be a solved soon.

"We have great expectations from the new regime. I expect it to be proactive in reforming the whole KMC," said Rungta.

Namrata Acharya in Kolkata