South Delhi civic body plans to levy compensatory regulatory charges for building plans

NEW DELHI: After introducing garbage user charges, approving professional tax, hiking licensing fee and increasing commercial property tax rates, the cash-strapped South Delhi Municipal Corporation is planning to introduce ‘compensatory regulatory charges’. The civic body proposes to levy this new charge when building plans are sanctioned and it is likely to vary on the basis of area categorisation and prevailing circle rates.

The proposal of SDMC’s executive wing states that the new charge will be calculated at the rate of 0.2% of circle rates for houses of more than 50 square metre area and 0.1% of circle rates for plots smaller than that. The circle rates in Delhi vary according to the category of the location and range from Rs 7.7 lakh for A category colonies to Rs 23,000 for H category.

According to the proposal that has to be approved by SDMC’s standing committee, while the new compensation/regulatory charge is expected to be Rs1,548 for A category colonies, Rs 491 for B category and Rs319 for C category colonies, the impact will be double for industrial units and three times for consumers who apply for sanction of building plans for commercial units. The maximum impact will relate to agricultural land and low-density residential areas, for which 2% of the circle rate will be charged,

The municipal commissioner argues that such a development charge is already being levied in cities like Mumbai, Kolkata, Nagpur and Pune, where it is called development cess, FSI charges, even drainage development charges. Explaining the rationale behind the proposal, a corporation official said that SDMC is financially in dire straits allegedly because Delhi government hasn’t releasing grants due to it and new sources of revenues have to be identified to undertake the development works needed in many areas to bring them at par with grade A cities.

The official said, “At the time of sanctioning the building plan, various charges, such as additional FAR charges and betterment levy, are received, but the civic body has to also take care of unauthorised colonies, special areas, villages, etc, where services are being provided by the corporation without much revenues coming from there.”

The proposal submits that after the introduction of Master Plan Delhi 2021, the densification of areas increased and the notifiying of 2,500 streets as commercial- and mixed-land-use areas plus the multi-fold increase in dwelling units across the city led to increase in the demand for services from these areas. “Where there used to be one dwelling unit, 4-5 or more have come up,” the official said. “Redevelopment of old buildings was also carried out, necessitating more services from the municipal corporations. So, funds for maintenance and upkeep are required.”

An SDMC official said that the additional fee will have to be paid when applying for a new building plan or when approval is needed for plans to carry out modifications in the existing structure.