The recent suicide of a prominent real estate developer in Thane, near Mumbai, has brought to the fore the issue of corruption that prevails in local bodies. More so, in the richest municipalities such as Mumbai and Thane.
Mumbai municipality, popularly known as Brihanmumbai Mahanagar Palika (BMC), generates more revenue than many of the state governments such as Kerala and Jammu & Kashmir. Such municipalities have the wherewithal to support many of the modern amenities and bring quick resolution to problems that ordinary local bodies would take years to meet. But the flip side of the argument is that such riches also come with endemic opaque practices, lack of accountability and brazen corruption.
Now that the issue of corruption has come to a head, the BMC and the Thane Municipal Corporation (TMC) – controlled by major political parties like Nationalist Congress Party (NCP) and the Shiv Sena – have a lot to answer for. Developers in Mumbai and Thane, which are considered as the twin capital cities of country’s real estate, are known to take corruption in the municipal bodies in their stride. These real estate developers openly suggest that they pay up to Rs 230 per square feet of development solely for various project approvals from local bodies. But this rate is for far-flung areas near Mumbai like Vasai and Virar.
The situation in Mumbai is much worse as explained by developers. In Mumbai the going rate of project approvals stands at: Taluka inspector for land records: Rs 20 per sq feet; Surveyor of civic body + Preparation of the first report + Files to move to junior engineer, executive engineer and town development officer + Files to move further to assistant director, town planning and other senior officials + Commencement certificate for the project + nod for plinth work: Rs 300 per sq feet; Donations to politicians and political parties: Rs 350 per sq feet and Electricity and fire NOC: Rs 350 per sq feet.
Corruption in the municipalities and local bodies have become so rampant that recently there was a lively debate at the Maharashtra Housing Societies’ Welfare Association meeting where members were stating that there is no department in BMC which is not corrupt, and for everything, there has to be a ‘paper weight’.
Even if land acquisition for commercial and industrial use is still an arduous task because of the idiocy of the Congress party at the Centre, real estate developers emphatically state that nothing is as difficult as getting project approvals, especially for projects where the developer is new to the system and/or is averse to using corrupt ways to get approvals.
In an interview with this reporter, Brotin Banerjee, CEO, Tata Housing Development Company, said that for listed real estate companies there is no level playing field because such companies have to adopt transparent business practices. Privately-held real estate companies can manage to get all the project approvals (there are over 60 approvals needed for a housing project) using corrupt means because the municipality is quite pliable for monetary considerations. But decision-makers in publicly-held companies are held fully accountable for their actions. This implies that large real estate companies which raise finance from the stock markets face inordinate project delays due to corruption in BMC which tells hugely on their bottom lines. Needless to say, BMC and TMC do not give any special consideration to public-listed companies because of their inability to pay under the table.
Even urban planning expert Chandrashekhar Prabhu, who was responsible for changing the face of Thane as a municipal commissioner and bringing in much-needed transparency in the working of TMC two decades ago, agrees with the plight of businessmen in Thane and Mumbai.
Corruption in Mumbai and Thane municipalities is an open secret.