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The Ahmedabad Urban Development Authority (AUDA) has decided to increase the development charges by 20 times more than the existing rates. This decision has been taken to increase the revenue and promote the development of the city. The new rates will likely be less than Rs 100 per square meter.
Development charges are levied based on the area of land and the size of construction when a construction plan is approved. If the development charge is increased, it will have a direct impact on the project cost of the builders, and it will result in properties becoming more expensive.
Real estate experts have opined that this increase in development charges, coupled with the increased jantri rates, will result in a hefty rise in property prices in AUDA areas around Ahmedabad city in the coming months. This can affect the affordability of properties for middle and low-income groups and make it difficult for them to purchase homes.
It is essential to note that the Gujarat Town Planning and Urban Development Act 1976 empowers local authorities to levy development charges on land and construction within their jurisdiction. The act also provides for fixing the maximum development charge. Earlier, the state government used to charge Rs 50,000 per hectare or Rs 5 per square meter of land and Rs 15 per square meter of construction.
Sources said AUDA had suggested a rise in development charges to the state government five years ago. However, the state government did not take any decision on this proposal. In its board meeting last week, AUDA approved the proposal to cancel the old proposal and prepare a new one to be sent to the government. The increase in development charges can have a positive impact on the revenue of AUDA, which can then be utilized for infrastructure development, improving the quality of life of citizens, and providing better amenities.
In conclusion, the decision to increase development charges by AUDA can have both positive and negative impacts. While it can increase revenue for the development authority, it can also lead to a rise in property prices and make it difficult for middle and low-income groups to purchase homes. Therefore, it is essential to strike a balance between revenue generation and affordability while making such decisions.
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