With prices of commodities skyrocketing and uncertainties engulfing the global economy, it is critical for rising enterprises to have a clear strategy in place for managing the next round of cost price hikes. But have you ever wondered what is causing the price increase?
Increasing transportation costs as a result of worldwide oil market volatility:
India relies on imports for 85 percent of its oil needs, and retail prices fluctuate in response to global fluctuations. Petrol and diesel prices were raised by 80 pence per litre today, the fourth increase in five days, as oil companies passed on the increase in raw material costs to customers.
Construction prices have risen significantly connected with raw material prices:
According to industry analysts, raw material producers are raising costs by creating an artificial scarcity, which is bad for the real estate sector. Even the realtors’ apex body Credai previously expressed concern about rising costs, predicting that property prices might climb by 10-15% if building raw material prices are not controlled.
Rise in ready reckoner rates:
Aside from the influence of location, production specifics, and property classification into commercial, residential, or mapping categories, the ready reckoner rate is an important factor in deciding the final cost of any construction project. The state government collects money by charging specific stamp duty and registration charges on each transaction between a homebuyer and a developer in the real estate market. When the ready reckoner rate rises the stamp duty and construction charges rise with it. In some ways, the ready reckoner rate is required to preserve financial balance in the real estate market and to provide prospective homebuyers with an indication of how much money is needed to purchase property in a certain place.
Metro CessTax to be levied:
According to a Free Press Journal, revenue from metro cess in Mumbai is estimated to be Rs 1000 crore in 2022-23. The Maharashtra government anticipates receiving Rs 900 in metro cess from the remaining cities. From April 1, 2022, stamp duty on sale, mortgage, and gift deed details in Mumbai, Thane, Navi Mumbai, Pune, Nagpur, and Nashik will be subject to a 1% metro cess. These are locations in Maharashtra where metro projects are either active or under construction. Homeowners who register their properties before March 31, 2022, will not have to pay the 1% metro cess because the state government has waived it for two years (April 1, 2020 – March 31, 2022).
