Consider these building basics:
• Out of around 8.5 million sq ft of commercial area taken up by IT, ITES and BPO companies in the entire country, Calcutta accounts for two per cent
• The share of commercial properties in the city’s total developed space is not even five per cent, as opposed to more than 60 per cent in Bangalore
• No less than a million sq ft of built commercial space in Calcutta Municipal Corporation (CMC) areas is lying idle, thanks to rentals that can’t compete with other cities.
The patience of the city developers’ fraternity is wearing thin, as “inordinate procedural delays” and “irrational taxation” continue to stymie growth and scare away potential investors reluctant to brave the red tape.
Concerned at the civic body’s sloth in addressing existing realty roadblocks, Credai (Confederation of Real Estate Developers Association of India)-Bengal has shot off a strong petition to mayor Subrata Mukherjee, urging him to act now, or run the risk of “missing the bus”.
“It is high time we took drastic rectification measures, otherwise Calcutta will be deprived of its rightful share in the booming IT, ITES and BPO business sweeping the country,” states the act-or- repent missive to the mayor.
“We have made numerous presentations in the past to the CMC, as well as the urban development department, on the problems plaguing the sector. All we have got is a sympathetic hearing. But on the ground, there hasn’t been a single concrete move to inspire confidence,” laments Jugal Khetawat, president, Credai-Bengal.
The prohibitive rentals are fuelled by the “inexplicably high” incidence of municipal taxes (60 per cent on commercial properties, as opposed to 10 per cent in Mumbai and five to 10 per cent in Bangalore), and equally irrational sanction fees (Rs 125 per sq ft, against Rs 5-10 elsewhere).
“Our problems are compounded by the inordinate delay in getting a plan sanctioned by the CMC. It takes almost six months here for a commercial complex, as opposed to just 24 hours in Pune and 30-45 days in most other fast-track cities like Bangalore, Hyderabad, Gurgaon, Chennai or Mumbai,” observes Pradip Kumar Chopra, honorary secretary of the confederation.
Nobody gains from such slow-go, stresses the forum. A case in point — the South City project, which paid a record sanction fee of Rs 22.5 crore to the CMC coffers recently.
“We suffered a cost overrun of nearly Rs 10 crore because of procedural delays,” says Sushil Mohta, a director of the mega project on Prince Anwar Shah Road and vice-president of Credai-Bengal.
The cascading effect of such time-lag means the civic body, as well as the state, lose a sizeable sum in turn, by way of interest accrued and taxes collected.
The developers’ forum has also flayed the CMC move to slap an additional levy of Rs 150 per sq ft as security deposit on promoters before sanctioning a municipal plan.
“This is ridiculous. On the one hand, they say IT is the future and on the other, they are doing everything possible to make it non-viable for us to offer competitive rentals,” says Khetawat.