Cut taxes on business, make PSUs pay for development: Lodha

Bharatiya Janta Party MLA from Malabar Hill and among the city’s most prominent developers, Mangal Prabhat Lodha has made a slew of pro-industry demands to the state government.

They range from reducing stamp duty and road taxes, to getting public sector undertakings (PSUs) selling their land in the city to contribute a portion of their earnings towards Mumbai’s growth.

The letter addressed to the chief minister, a copy of which is with DNA, states: “The government has imposed 50% job reservation for locals on industries. However, it also needs to protect industries from the growing unionism. The expenses that Mumbai-based businesses bear in taxes are much higher than in cities like Bengaluru and Hyderabad. Therefore, we must cut property taxes, stamp duty charges, as well as road taxes,” says the letter. Lodha adds that the government should concentrate on lesser-developed areas like Panvel, Dahanu and Belapur.

Lodha has also demanded a cut from PSUs like the railways and the National Textile Corporation (NTC), which have made huge profits by selling their properties in Mumbai. “The government should make these PSUs contribute to the growing infrastructure needs of the city. They should part with at least 50% of the revenue earned from their land sale to agencies such as the Mumbai Metropolitan Region Development Authority (MMRDA), who are implementing big-ticket infrastructure projects,” says the letter.

Reacting to Lodha’s letter, veteran urban planner VK Pathak said that though some of the demands are not reasonable, some are quite valid. “That PSUs should contribute to development is a legitimate demand, but sans the proposed percentage. Moreover, why should only the PSUs contribute? Even private developers who have huge land banks in the city should be charged,” opined Pathak.

He, however, did not agree with the lowering of taxes. “Under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), stamp duty has already being reworked and reduced, and the property tax structure is also under reconsideration,” Pathak said.
Lodha told DNA that due to the high operating and maintenance costs, businesses are dumping the city in hoards. “If they find Bengaluru and Hyderabad cheaper, why will they choose Mumbai?” questioned Lodha. When asked about taxes, he said that even business houses in the information technology sector are concerned about the high property tax structure in the city, and his demand should be seen only in that context.

He added: “Though it is a fact that I am a businessman, my letter should not be considered with that reference.”