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Lease rent on Mumbai lands hiked

Announcing the move, Chief Minister Prithviraj Chavan also said that unlike long leases in the past of 5, 99 and 999 years and even above, the lease duration henceforth would be only of 30 years at a time.

"Some of these leases expired in the 1970 and 1990s and the rent amounts need to be reviewed for their renewals," Chavan said, after the weekly cabinet meeting this evening.

The new policy would take effect from Jan 1, 2012 and shall apply to those whose leases have expired in the past 10 years or due to expire in the next 10 years.

Chief Minister Prithviraj Chavan
Maharashtra Chief Minister Prithviraj Chavan has announced that the lease rent on all government lands leased to private parties since the British-era will be hiked.

Even the hiked lease amounts would be now revised every five years as per prevailing market rates, Chavan said.

The lessees have also been granted the option of buying the government land (on which their residential, industrial or commercial or residential-cum-commercial buildings stand), on certain terms and conditions.

Presently, of the 1,282 government properties on lease in Mumbai, the leases of 571 have expired and of the 295 government properties leased in the suburbs, leases of 149 have expired.

Citing instances, Chavan said that in Colaba, one of the most prime areas of south Mumbai the government got an annual rent of merely Rs.17 for a 570 sq m plot, and only Rs.74 annually for a 3,070 sq m plot. "This cannot be accepted," Chavan declared, adding that these two parties would have to pay over Rs.3 lakh and Rs.33 lakh, respectively, after their leases are renewed.

The measures are expected to yield significant revenues for the cash-strapped government but may also adversely impact the prevailing market prices of different types of properties standing on government lands.

Chavan pointed out that in the past, the government had attempted to revise the lease rents thrice in 1978, 1986 and 1999 but it did not succeed due to litigations.

This time, he said that government had revisited its 1999 order (which had been withdrawn following litigation), whereby the hiked lease rent would be related to the market ready reckoner price of the year when the lease is being renewed.

He also expressed confidence that the move would not face legal challenges since the government had studied all the past decisions and high court and Supreme Court guidelines in the matter.

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