In a move that will bring down the cost of Maharashtra Housing and Area Development Authority (MHADA) houses, the state government has given an in-principle approval for pricing policy changes as recommended by the authority.
The pricing policy takes into account several parameters, including overhead costs such as establishment cost and unforeseen liability, apart from the profit ratio.
While most of the proposed changes were likely to benefit areas apart from Mumbai, the capital would see a four per cent reduction in cost of MHADA homes, said a senior MHADA official.
At present, the estimated cost of MHADA homes in Mumbai is around Rs 5,000 per sq ft. This is expected to reduce by Rs 300-400, said the official. MHADA has suggested that the establishment cost, which is on an average 7.5 per cent for Economically Weaker Section (EWS), Lower Income Group (LIG), Middle Income Group (MIG) and Higher Income Group (HIG), be brought down to four per cent in totality.
While establishment cost is expected to be lowered for MHADA homes in Mumbai, MHADA is planning to lower the unforeseen cost liability of five per cent to one per cent.