Ready reckoner shocker: Rates up by 1,000% in select suburbs

 As the ready reckoner (RR) for 2013 came into effect from Tuesday, it transpired that the average rate increase for Mumbai is 14%, down from last year's average of 18%. On the surface this may look good, but digging deep reveals some ugly facts. At some places in the western suburbs, the increase is as much as 1,000%. This is in particular true of residential buildings in Poisar village in Borivli division. 

    Experts are questioning the logic behind the magnitude of increase in this village, which was 25% last year. Land rates here have jumped to Rs 1.31 lakh per sq ft (psf) from Rs 11,840 psf in 2012. The figures for Akruli village, which includes Thakur Complex, are similar. At Borasepada, 
Mhada Colony and M G Road in Kandivli (West), the rates have increased by 950% over last year. The average is Rs 41,370 psf now, compared to Rs 3,940 psf in 2012. The average increase in all three sub-zones of Poisar is 225% for residential properties; the rates have gone up from an average of Rs 4,760 psf to Rs 20,680 psf; a typical area is that around Raghuleela Mall, Kandivli (West), where developers like Hiranandani and Kalpataru have projects. 
    Property experts are stunned. A stamp duty and registration consultant said, "The town planning department seems to have approved the hike without any application of mind. In this scenario, no individual will ever be able to buy a flat in the areas concerned. By increasing RR rates in the extended suburbs, the government has only provided a readymade excuse for developers not to reduce rates." 
    Inspector general of registration (IGR) S Chockalingam, who approved the 2013 RR, said, "I think it could have been a typographical error. The rates cannot increase so much. I will have them verified again." The RR is an annual statement of rates, based on which the stamps and registration department collects duty from property buyers. Going by zones, the range of increase is 5-30% for all save one. The exception is the zone that includes the area between Goregaon (East) station and the Western Express Highway, where the increase is 40%. RR rate rises used to be nominal till 2005. Things changed radically in 2007, when the government introduced increases in the range of 36-45%.