SURAT: Growth in the city’s realty sector is continuing this year too, with the Surat Municipal Corporation (SMC) earning Rs 829 crore from paid floor space index (FSI) in nine months. By the end of the financial year, the total amount is likely to cross Rs 1,100 crore, according to SMC officials. The yearly earnings are almost double of the revenue three years ago.
Post-Covid, the realty sector is growing steadily, and with the expansion in city limits, the growth is likely to speed up in the next few years. Paid FSI is dan important tool to measure growth in the realty sector as it shows that there is demand for property. Users and developers are both ready to pay for the additional space.
In 2021-2022, paid FSI earnings were Rs 513.34 crore, and in 2022-23, the earnings were Rs 625.32 crore. It further grew to Rs 1,019.60 crore in 2023-24.
“The paid FSI earnings show that the sector is continuing to grow at a steady pace. The earnings by the end of the financial year are likely to go above Rs 1,100 crore,” said an SMC official.
Meanwhile, payment of around Rs 625 crore for paid FSI was due from various developers in the city since 2017. The cheques deposited against the FSI were returned by banks. “Initiating the process against the developers, we recovered Rs 400 crore, while for the remaining amount, the process is continuing. The developers have to pay a heavy penalty for the delayed payment,” said an official.
“The paid FSI rates shot up in 2023 due to revised jantri rates, which were doubled. The paid FSI earnings reflect growth. There can be faster growth if the paid FSI rates are reduced,” said a developer.
CREDAI city chapter has raised concerns over the proposed 18% GST on paid FSI. CREDAI is opposing the proposal nationally. CREDAI officials claim that the property cost will rise by around 10% further. “The situation in the case of Gujarat cities is further tricky. With the proposed rise in jantri rates and GST on paid FSI, the property costs will shoot up, and this will keep the buyers away from the market,” said a CREDAI official. CREDAI has raised concerns over the impact of the GST on ongoing projects.
Further, it will become challenging for the middle class, which constitutes around 70% of the total buyers, to buy property.
Source Homevior.in
