Why is govt. losing money on 41% expired leases in Mumbai?
Mumbai: 41% of island city leases have long gone expired
Published: Wednesday, Feb 20, 2013, 7:00 IST
By Ashutosh Shukla | Place: Mumbai | Agency: DNA
Real estate prices have risen exponentially in the last decade, but the
state government has inexplicably extended its largesse to those occupying
prime plots of land in the island city where 40% of government leases have
expired, some as far back as the 1950s. Of the 1,282 plots leased, the lease
of 532 plots has expired and the government has not bothered to renew it.
Located in south Mumbai, the real estate is fetching the government a paltry
Rs48.82 crore annually from the 51.66 lakh sq mt of leased land. The data
was provided after former central information commissioner Shailesh Gandhi
filed an RTI query with the city collector.
Apart from the 40% of leases that have expired, there are48 plots where
there is neither a mention of when the lease deed was signed nor the number
of years for which it was leased out. In the case of 55 plots, the lease
period is not mentioned while three plots do not mention the date of signing
The Mumbai Port Trust is among the lessees whose lease period is not
mentioned for the 76,101 sq mt of land given in 1935. Adarsh Co-Operative
Housing Society is among those whose deed mentions neither the date of
signing nor the period of lease. However, the plot accounts for the largest
lease rent the state earns - Rs18.5 crore annually for about9,000 sq mt of
land. This is the only figure somewhere close to the market value of the
Mulaji Haridas, who holds 404.68 sq mt of land in Colaba, continues to pay
Rs0.06 per year. Its lease expired in 1954.
"There is a major problem with the government's approach. It is either
arbitrariness, carelessness or corruption on the part of government and in
either case it is bad for people. The state is losing out on revenue that
could be used for good purposes, especially for welfare projects," said
Pankaj Kapoor, MD of property consultancy Liases Foras, told DNA the
equivalent for outright purchase price in the island city, at a conservative
average estimate, would be Rs1,50,000 per square metre. By that calculation,
the government can extract Rs77,000 crore through long leases.
Collector Chadrashekhar Oak said a new land lease policy has been notified.
The new policy, announced in October 2012, ruffled a lot of feathers by
announcing a first-ever rejection of the centuries-old, British-era lease
rents. "In 1999, there was a policy for renewing them. Some people
challenged that in the high court.
The case was withdrawn in 2006. Now the government has come out with a new
policy and a GR for the same has been issued in December 2012. As per this,
first we will look to renew the leases as per Ready Reckoner rates," Oak
said. Those unwilling to pay market rates will have to surrender land, the
implementation of which will start between March and May 31, he added.