Tuesday, September 15, 2020

Ready Reckoner Rates & Dream of Owning a Home!






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“I can retain neither respect nor affection for government which has been moving from wrong to wrong in order to defend its immorality”... Mahatma Gandhi


“The government cannot give to anybody anything that the government does not first take from somebody else”... Adrian Rogers


No need to introduce author of the earlier quote i.e. “Bapu” & Adrian Rogers was an American Southern Baptist pastor and conservative author. He served three terms as president of the Southern Baptist Convention. Though his words may sound like politician but let me tell you if we think we are a country ruled by religious issues, well even the western & so called developed countries are also not free from religion & Christen Churches has big role in deciding fate of many candidates in the elections, there also. And that’s why a Pastor’s above words for the working of the govt does, has its weight! And after all what is religion but a flag to bring people under one cause & then what is a political party but some another flag & of both purposes keeps changing depending up on the flag holder, is what we have witnessed enough times, isn’t it!


Oh k, frustration is usually father (or mother) of philosophy & I (along with most of real estate) am no exception to it & the reason is news about increase in ready reckoner rates of properties mainly in & around Pune! Our govt does wonderful job especially when issues are related to real estate & more with Pune (read as PCMC/PMRDA in totality), may be the Smart City Tag makes us dearer to the gvot. And when its taxing or collecting money or any stringent policy implementation may it be lock-down or helmet compulsory (I am firmly with helmet personally), it’s always Pune which is trial ground. Unfortunately when its doing something positive or taking right decisions (means logical decisions) or infrastructure development like public transport (read as PMT) or MSEDCL net work & maintenance (MSEB) then we are most unpopular child (Dodka Mul in Marathi) for our Mai Baap Govt! And this fact repeatedly we have witnessed, so when last week the govt announced stamp duty reduction then also Pune has got minimum discount while Mumbai & other cities got maximum. At least Pune real estate got something positive but as usual the govt with its all indecisive confusions over polices, declared the news just a day before Pitru Pandharwada i.e. non-auspicious fifteen days which are followed in Hindu Mythology, so the effect of stamp duty reduction has been yet witnessed in sales or say account books of the builders! And in the mean time the govt fired salvo which took away the celebrations before the hangover even started, by increasing ready reckoner rates for Pune, mainly!


Well, for innocent (and ignorant) souls stamp duty is a service fee or processing fee charged in form of some percentage on every property (immovable) is by now most of us know. Ready Reckoner rates are minimum rate defined by the govt of every piece of land, build up properties of all uses such as residential, commercial etc in every city & town of the State. You can’t sale your property below this rate which is decided by the govt (even if you are in great distress) & is called as ready reckoner rate. Joke is you can sell your property as many times you feel (or can get) above this RR rate, thus making real estate as only commodity with Maximum Retail Price is MRP tag for having lower bar than having an upper selling bar like every other commodity!  No wonder, govt always looks at real estate as Golden Eggs laying hen & takes a cut at it every time to get more & result is neither there are golden eggs nor the hen seems to survive anymore is the scene! In nutshell if the flat holder was going to save by reduction in stamp duty over the deal amount, the govt increased the deal amount itself voiding the stamp duty reduction effect over cost saving! In simple words if you buy a flat in Baner (suburb in Pune) at say Rs 80 lakhs then you will have to pay stamp duty on this amount but what if you have been asked to pay stamp duty on Rs 85 lakhs, even if you are buying the flat at Rs 80 lakhs, just because govt says value of this flat is Rs 85 lakhs! That’s what has happened by increasing ready reckoner rates!


Indeed many people (read as common man) will say this is as usual crocodile’s tear (Marathi phrase) as have not the builders already has enough golden eggs, that’s why they are crying now just because they don’t get to make more money now days with such erratic policies of the govt which actually are in favour of common man to fulfil his or her dream of owning a home in this Smart City i.e. Pune! Keeping full respect to common man’s emotions & feeling about real-estate (builders), let me tell you the fact, the govt cares a hang for common man when it’s about his or her dream of owning a decent home in a decent location in a decent budget in a decent city! And increasing ready reckoner rates in this hardest phase of business is one clear example of govt’s turning blind eye towards real estate & the common man’s dream of owning a home! Just ask one single question to yourself (each of us) when every media & individual is screaming on top of voice that rates of homes are falling, there is no appreciation (well, I am always against speculative appreciation in real estate) then how can the ready reckoner rate govt increases as these rates are supposedly indication of market rates or scenario about real estate or say property deals. And joke is the very same govt has reduced the ready reckoner rates in Mumbai so who has decided that rates in Mumbai have decreased but in Pune are still increasing, at least I dint heard to any Aakashwani about it! Though one silver line in this read reckoner rate hike thing is, if the govt itself thinks property rates in Pune are increasing then it’s really a great news for the entire real estate as when all around the country every commodity’s (including real estate) prices are falling, its only Pune real estate which is shining bright with rates increasing, isn’t it great!


I do understand (read as assume) that there is a system by which govt works out or say verifies the rates of the properties & it’s the process going all around the year. Best way is check the deals getting registered & more better way is govt can actually send its people (staff) to speak with the builders or landlords & check what they quote & to what they negotiate & then only you can really freeze the rates. As real estate unlike any other product has many parameters for the actual dealings which includes surrounding locality, infrastructure & one very important aspect (when its land) i.e. need of the seller or say greed of the seller of the property! As for a builder bleeding with interest burden, salaries, over-heads & so many factors, he won’t hold ready reckoner rate as the bar but will negotiate as  much he can to break free from the cash crunch & which is the scene for a while now everywhere! At the same time when its land sale then it’s totally up to the landlord how much he can wait & he (or she) also need not have to hold ready reckoner rates as bar & can ask any ransom above it!


Agreed we can't change or fix the ready reckoner rates project to project but high time to make a logical & transparent system to fix the ready reckoner rates of the properties & then apply changes to the same instead going by strait hike or decrease on average level. As apart from need of the deal, projects in same locality can have different selling rates, depending upon the view or neighbourhood of the project. At the same time TDR loading norms & potential which also differs on plot size as well approach road width parameters makes impact of sale prices which might be different from project to project.
Another good news (for now) is Pune Municipal Corporation has allowed for paying premiums for plan passing of new proposals in instalments for the developers. This single step can tell the story about situation of cash crunch in real estate industry & cash is not I mean what our Hon PM is against about, its money available at our disposal, such is the grave scene around! Considering all these factors if the ready reckoner rates of properties are worked out & applied then I think life of many people will be more comfortable, off course if the govt wants that as outcome! 


But at present the way govt is behaving with real estate I remember a folk tale from Akbar Birbal Stories where; Badsha Akabr who was famous to test nerves of his ministers, once called them & gave them a goat & told them that it’s his favourite goat & as the Badsha is going out of town for one month they should take good care of him & when he will be back he wants the weight of the goat must not differ a single ounce from what it is today & Akbar left for his travel! Hearing the weird condition regarding the goat’s weight, the ministers were panic as how the hell weight can be same that too of a goat! As usual they all surrendered to Birbal who smiled after listening to their problem & told them Gurumantra i.e. solution! After one month Akbar was back in Delhi & summoned for the goat & when its weight was measured it was exactly the same what it was one month back. Akabar was stunned & he asked ministers what they did with the goat, to make its weight remain constant. On this the minister’s told they used to feed the goat normal but in the night used to tie him outside of a tiger’s cage! Akbar looked at Birbal who avoided his gaze & Akbar smiled, as he knew whose brain was this!  

Well, unfortunately when it’s the real estate named goat, the ministers seems to have not read the story keenly & seems to have tied the goat in the tiger’s cage instead tying it near the cage! Do I need to say anything more about govt & its attitude towards the real estate as whole as please do mind real estate doesn’t mean just builders, it’s something which is related to every segment of the society & owning a home is a right for everyone in the nature! Unfortunately we are heading towards a world where we have already denied this right to thousands of the species already by destructing their habitats & sad part is we are denying the right of owning homes to most of the humans also by our wrong policies, god bless the goat & the ministers!
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Sanjay Deshpande 
Sanjeevani Dev.

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