The Confederation of Real Estate Developers Associations of India (CREDAI), Ahmedabad, has voiced strong concerns over the Gujarat government’s proposed hike in jantri rates, a move that could lead to a staggering 30%-40% increase in property prices. These government-determined rates, last revised in April 2023, play a pivotal role in determining land and property costs, influencing stamp duty, land premiums, and the overall market dynamics. CREDAI has urgently called for the government to extend the deadline for objections from December 2024 to March 2025, allowing for detailed stakeholder deliberation.
The proposed jantri revision indicates a substantial jump, with floor space index (FSI) rates expected to rise dramatically. Under the new rates, FSI charges may escalate from the current ₹1,200-₹10,000 per square metre to ₹6,000-₹30,000, potentially adding an average of ₹800 per square foot to project costs. Developers argue that such an increase, ranging from 200% to 2000%, demands a phased implementation supported by scientific methodologies. CREDAI has also recommended de-linking non-agricultural land premiums, paid FSI, and property taxes from jantri rates to ensure affordability.
This hike also brings to the forefront broader civic concerns. While increased revenues could strengthen Gujarat’s urban infrastructure, the surge in property prices may exacerbate housing affordability challenges. The rising costs could deter middle-income buyers, reshaping urban housing accessibility. Developers are seeking reduced stamp duty and registration fees to balance affordability amidst escalating costs.
From a sustainability perspective, the implications of higher development costs merit attention. Increased FSI rates could lead to denser urban projects, intensifying demands on existing civic infrastructure. CREDAI has underscored the importance of adopting green construction practices and efficient urban planning to mitigate environmental impact. By addressing these challenges, Gujarat can align its growth trajectory with the principles of sustainable urbanisation, ensuring equitable development in its real estate sector.
