AHMEDABAD: The Ahmedabad Municipal Corporation (AMC) has reported a loss of Rs 23 crore due to the temporary leasing of plots at a 50% discount based on new jantri rates.
The AMC leases reserved plots throughout the city to builders, traders, social organizations, and companies, applying new jantri rates for these plots. However, a 50% discount is factored into the total rent calculated.
On Friday, the AMC’s estate department proposed to increase the temporary plot rent from 50% to 65% of the new rate, but this proposal was rejected by the standing committee.
The state government announced on February 4, 2023, a doubling of the jantri (minimum land valuation) rates, but implementation was suspended until February 11. The new rates were subsequently set to take effect on April 15, 2023.
Despite the new jantri rates being implemented, the AMC did not apply these rates to temporarily leased plots for a year. During a standing committee meeting on March 14, 2024, the AMC decided to adopt the new rates for temporary leases while still offering a 50% rent reduction.
This decision effectively kept rent rates in line with the old jantri rates, resulting in an annual loss of Rs 10 crore to Rs 12 crore for the AMC from temporary leases.
An AMC official remarked, “The AMC’s policy allows for the temporary leasing of plots for commercial, religious, social, and parking purposes within its Town Planning schemes.” The duration of these leases can vary from a day to over a year, with rents calculated as a percentage of the current jantri rates.
In the past two years, the income from temporary leases was Rs 23 crore, although the estimated income was Rs 46 crore. The AMC provided the 50% relief based on concerns that higher rates could burden builders and traders.
Another AMC official noted, “Currently, the annual rent for a plot temporarily leased for commercial purposes is 7.5% of the jantri rate, though this amount has been calculated using the outdated jantri rates.” The official added, “With the new jantri rates now in effect, lease amounts should be adjusted accordingly, but a 50% relief will still apply.”
