An initiative is underway that may rejuvenate Malabar Hill, the poshest locality in Mumbai, alongside Nariman Point and other regions in South Mumbai. The city collector is advocating for the release of government-owned parcels of land currently bound in lease agreements by offering them for sale at prevailing market rates.
Nonetheless, a faction within the state administration expresses caution, believing the conditions of the real estate market could undermine the government’s aspirations of generating potentially thousands of crores by disposing of these properties.
The Maharashtra government is in possession of extensive land holdings in one of India's priciest real estate markets. These properties often turn into a financial burden for the state, yielding minimal revenue. Most of these parcels of land are ensnared in long-standing lease agreements.
"Our revenue stands at roughly Rs 20 crore from 955 land leases situated in Cuffe Parade and Churchgate, as well as Rs 25 crore from properties in Backbay Reclamation and Nariman Point. The majority of these leases are up for renewal. Rather than extending them, we prefer the government to contemplate outright sales of these land parcels," commented Mumbai district collector IA Kundan.
Out of the 955 lease agreements across Cuffe Parade, Churchgate, and the Marine Drive, 458 have already lapsed. In Nariman Point's Backbay area, more than half of the 316 lease agreements have expired as well. Some of these contracts were initially penned for durations spanning 99 years. "The revenue the state government garners from these properties is absurdly low," stated Ms. Kundan, critically assessing the situation.
In 1999, the Maharashtra government attempted to extricate itself from these lease agreements; however, the initiative faced legal challenges. This matter has since been resolved, and the revenue ministry has tasked the city collector with formulating a formal plan for the sale of the leased properties. "In line with this, we have presented our strategy. This proposal will soon be discussed by the state cabinet," she elaborated.