Maharashtra government hikes lease of Mumbai’s elite clubs, gymkhanas

Mumbai city news: It has also made it mandatory for them to share 25% of their revenue from commercial activities with the government

After finding the city’s gymkhana land being misused by management for commercial gains, the state government has decided to increase the lease rent. It has also made it mandatory for them to share 25% of their revenue from commercial activities with the government. What could turn controversial, however, is the decision of reserving 5% membership for government officials.

Mumbai has around 19 clubs and gymkhanas on government-allotted plots.(HT)

The state cabinet, on Tuesday, approved the renewed lease policy with higher rent for the gymkhanas. Mumbai has around 19 clubs and gymkhanas on government-allotted plots. Most of them were allotted during the British era and are paying nominal rates because the rates have never been revised. Of the 19, the lease agreement of around 12 of them has expired and is yet to be renewed. Gymkhanas along Marine Lines have been reportedly conducting commercial activities by giving them out on rent for wedding ceremonies.

The clubs and gymkhanas will now have to pay the rent linked with the ready recknor rates ranging between 0.01% to 0.0025% per annum. In other words, they will have to pay 0.25% to 1% of the base price, which is 10% of the applicable ready reckoner rate applicable in the area. Currently, they pay as low as Rs2 to Rs2.5 a square foot as the lease rent against the lakhs of rupees they earn from membership fees and charges for commercial activities. The clubs reportedly charge hefty annual membership fees.

The clubs and gymkhanas will now have to share 25% of their revenue from commercial profits with the government. The policy will come into effect from January next year. To ensure effective implementation, the government has also decided to appoint the city collector as ex-officio member on the managing committee of the gymkhanas.

The cash-strapped state government has also aimed at generating revenue from commercial activities by the gymkhanas by revising the lease rent policy.

In one year, the gymkhanas can use the facilities for commercial use for 45 days such as renting out the ground for a wedding ceremony or other such events, but have to share the 25% share of the total revenue, Manukumar Srivastava, principal secretary of the state revenue department said.

In 2003, the state government made an attempt to hike lease rents by formulating a policy, which was challenged and subsequently stayed by the Bombay high court. “The stay was lifted in 2008, but managements of the gymkhanas didn’t come to us to renew the lease agreement,” said a senior official from revenue department requesting anonymity.

In the policy formulated in 2003, the government has kept 15% of the ready reckoner rates as base price for charging lease rent, which was objected to by the managements and thus this time the government decided to lower the base price to 10% of the ready reckoner rates, the revenue minister said.

State revenue minister Chandrakant Patil said they have decided to classify these gymkhanas into three categories — A, B and C — and decided to make 10% of the ready reckoner rate as base price for determining the lease rent. “The gymkhanas with land admeasuring 20,000-square metres will come under ‘A’ category and will have to pay 1% of the base price, gymkhanas having land between10,000 to 20,000 square metres will under ‘B’ category have to pay 0.5% of the base price and gymkhanas having less than 10,000 square metres land will come under ‘C’ category and will have to pay 0.25% of the base price per year as lease rent,” Patil said.