Vision of Life; by Sanjay: PMC, Revenue, Responsibilities & Pune!

Revenue cures everything in the business world… Jon Taffer

With great power comes great responsibility… Spiderman… Stan Lee.

Jonathan Peter Taffer is an American entrepreneur and television personality. He is best known for hosting the reality series Bar Rescue on Paramount Network and Face the Truth on CBS & second quote’s writer (read as creator) is the man who changed millions of lives through his creations via Marvel Comics & wrote the all-time greatest quote about power & responsibility! Why I chose the above two quotes is because of one news article about PMC (Pune Municipal Corporation) which praised (rare thing) the organization for its record-breaking revenue it earned in the financial year 23-24. You will say what's special in it as that's the job of the PMC to earn revenue for the city & what it has to do in it, just grant permissions & so but then that's the speciality of Punekars, i.e. to criticize everything, so be it! For those who doesn’t understand the importance of this news & its impact (future) on the city lets first understand how PMC earns its revenue & how things like power & responsibility as well our future are related with this aspect & then will share my views about the revenue from building permissions, PMC is governing public body for Pune city & it earns revenue via various ways & just the way we pay tax to the govt & from that development works for the country are done, the city also works on similar basis. Though things like income tax or such taxes on earning are not there yet the major sources of the city revenue are Property Tax, Premiums as well Development Charges PMC charges for new construction (which are per sft area consumed) & GST collection share (which is receivable from State Govt). And then there are other revenue avenues such as Hoarding/ Banners (advertising) charges, road cutting & other charges as well whatever public buildings or properties are owned by PMC those rental but the major source remains property tax collected from the citizens for the services PMC provides to them & building permissions. And from all this revenue the infrastructure works in the city along with running costs such as salaries & other operating charges for the services PMC provides are taken care of.

Now, if you have understood the revenue model of PMC then let’s see the importance of increase in revenue via building permission charges, its reasons & impact on the future of the city. First of all, increase in revenue from building permission means “Achhe Din” for real estate (at least one side of it) as its possible because of more & more launches of new projects in PMC limit & the faster PMC will approve them the faster its kitty will fill & full marks to PMC administration for that as sanction process needs to be smooth & fast to achieve increase in revenue. I know many people will frown over this & can say “buttering” knowing my bread & butter depends on PMC also, but let me tell you one thing, to give credit to someone (even govt) for a good result is equally necessary if you want to slam the same system for its wrong doing, & take my praise with that mindset! And as I always say, speak up good things first if you want to improve the system & in this case if revenue is a power of PMC, then the responsibility will come in the form of infrastructure needs of the city which this revenue has or will generate! At the same time three to four years back even before Covid hit us the revenue of building permission was on a declining graph, so what has turned the tide? Answer is, UDPCR named “sim sim,” which means allowing more construction on the same piece of land which was a boon for redevelopment as well as the central part of the city which was already saturated! As well, post Covid demand for this city from all across Central India & other parts of the State was the reason for the need to fulfil this real estate space’s demand & which was completed by UDPCR!

Suddenly the central part or already developed part of the city once again came in demand as practically the FSI here got doubled & outcome is every alternate building which has been built in early 70’s to 90’s found themselves in race (rat race) of redevelopment. Because if on one side the buildings which don't have basic amenities like lift or attached toilet to the bedrooms or enough parking spaces are redeveloped for these amenities then many are being redeveloped for additional space the existing flat holders will be getting because of availability of FSI. As well suddenly the bungalows or vacant plots also are getting lured with the kind of remuneration which is too hard to resist & all of these resulted in more development proposals means more FSI consumption means more building permission revenue & thus this year building permission revenue figures for first time are more than property tax revenue, which is a good sign then I personally feel is not a healthy sign (read as warning sign) for the city! Because property tax is a permanent & perennial source of income which must be looked after & strengthened as building permission revenue is like waves of ocean which has high tide & low tide too! If you are confused then do know building permissions revenue is possible only when new real estate proposals are being submitted i.e. new projects are being launched & its one-time revenue, the reason why three to four years back the building permission dept’s revenue got decreased because most of the PMC limits lands has been developed & UDPCR was yet to come in force, naturally there was no scope for new development so less revenue, is the mathematics! But now as many new lands (read as potential) are coming for development the graph of building permission is on the rise but this will be on for next say ten or twenty years which includes lands in newly merged 33 villages (well, that’s another subject of sharing).

This is the entire revenue model thing so, let’s see the responsibilities which will (rather already has come) come along with building permissions’ revenue of which first & foremost is the huge, trust me huge is also insufficient word to describe the need of infrastructure which these new permissions are going to generate in the city! Water is the first need as it is very basic of which the city is already witnessing the burnts & then will come power, roads, parking spaces, drainage lines & many such along with the new permissions which are in a way new homes! And I am not even counting the other needs such as education, public health as fortunately the private sector is there to take care of them yet entertainment & recreation is there & we don’t have enough public spaces is a fact. At the same time all these new homes are not affordable to the common man means nearly sixty percent of the population of this city which is in serving the lucky forty percent who can afford a home in central part of Pune will still need a good liveable (and legal) home, who & how they will be build, is the question which PMC only has to answer as they are the ones giving permissions! And do mind the permission revenue graph will be going to decline after a decade & we don’t have new villages or UDPCR then, so we will have to build the infrastructure right now from this revenue in the right way! And most important make building policies which will have space for trees (and assurance for their survival) along with buildings, as by reducing green cover we are indirectly reducing our future revenue forever!

And to achieve this revenue figures, we will also need right policies from business angle also, as on one side along Metro corridor we are asking for more density of flats & making smaller flats (below 600 sft, fifty percent in TOD zone) but that’s making building planning miserable (read as impossible) as well there are not takes for such flats as in central area rates are already beyond capacity of normal families, instead open up the planning restrictions, let it be the way one wants to build as that’s possible only by the selling capacity of the builder & city will benefit in that way more on revenue as well infra front! At the same time make more TDR available & keep paid FSI options available & don’t make compulsory which should be used & in what proportion as all around the world markets are opening & that's the only way of survival, look what happened in China & learn! If we want the city to keep on high-tide of the revenue then we must make positive changes to sustain that high-tide & prepare ourselves for the low-tide which is the course of nature! And we will have to do that fast because the responsibilities come faster than the revenue; mind it, adios with this warning!

Sanjay Deshpande

smd156812@gmail.com

Sanjeevani Dev.

Please view my sharing about finding a Right Home/ Office in Pune, at YouTube link below & share if liked...

https://youtu.be/27j3I3rwGPQ?si=-ODYBxVI2Dl_C345

Please do visit my blog links below to read about real estate & home buying!

https://visonoflife.blogspot.com/2024/01/choosing-your-home-along-with-future-of.html

http://jivnachadrushtikon.blogspot.com/2023/02/blog-post.html

Creating Togetherness; team Sanjeevani Way (Click link below)

https://www.flickr.com/photos/65629150@N06/albums/72157627904681345

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