India, July 4 -- In a rare admission, Maharashtra Deputy Chief Minister Eknath Shinde has acknowledged that taxes and fees imposed by the state government and local bodies, especially the Brihanmumbai Municipal Corporation (BMC), are significant factors driving up Mumbai's soaring housing prices.

Shinde, who heads the Housing and Urban Development departments, said residential flat prices in Mumbai and other cities continue to rise partly due to these levies. He was responding in writing to a question about the nearly 30% gap between actual construction costs and the final sale price of housing units, which often results in hefty profits for builders.

Besides the increasing prices of construction materials like cement, steel, bricks, an...