HYDERABAD: Officials expect a 20% to 30% fall in the number of applications for building permissions and registrations due to demonetisation of Rs 500 and Rs 1,000 currency notes. This in turn may affect the financial health of Greater Hyderabad Municipal Corporation (GHMC) and Hyderabad Metropolitan Development Authority (HMDA) as building permission fee and development charges are two major sources of revenue for the cash-strapped agencies.
“The demonetisation move will certainly affect construction activity in the metropolitan region. The exact impact cannot be assessed immediately but we are expecting it would be between 30% and 40% on overall permissions,” K Purushottam Reddy, director (planning) of HMDA, said. Municipal administration department officials said while GHMC grantsHMDA about 8,000 to 10,000 permissions for all categories of buildings a year, HMDA gives permissions for about 400 a year.
Since April this year, GHMC has granted 4,040 building permissions, including 32 for major multi-storey and commercial projects such as shopping malls. The HMDA has sanctioned another 120 permissions so far. HMDA gives permissions to ground plus 3 floors (G+3) and above height buildings in the metropolitan region other than GHMC areas.
In GHMC, about 630 people did not pay the building fees even after after inspections were completed and another 800 have not submitted their documents. Officials say that the applicants might not have sufficient liquid cash for starting construction.
“People who have already applied for permissions have not paid the requisite fee amounts and there is also a shortfall in the number of documents needed. There is a decline in the number of applications in all the circles,” said a GHMC city planner.
City president of Confederation of Real Estate Developers’ Association of India, S Ram Reddy, said demonetization will help the housing industry. “With banks flushed with deposits, they will disburse housing loans at cheaper interest rates. The CREDAI is planning to approach Telangana chief minister Chandrasekhar Rao to reduce stamp duty for property registrations apart from Income Tax from the Centre,” Reddy said.
Credits ET Realty