Circle rates to be hiked by 20-30 per cent after 16 May
22 April 2014 5:44 AM IST
Citizens of Delhi will witness a 20-30 per cent hike in circle rates across various categories of properties after results for Lok Sabha elections are declared on 16 May. Revenue lost by the government from the sale of properties in the national capital has amounted to Rs 800 crore in 2013-14.
Delhi government’s Revenue Department had constituted a committee for the revision on circle-rates, which submitted its final report at the end of February, 2014. The committee had recommended a revision of rates up to 20 to 30 per cent hike for lower categories and a steeper hike of 40 to 50 percent for A and B categories, sources said. However, since elections were declared on 5 March and the model code of conduct was enforced, the decision was put on hold.
Delhi Divisional Commissioner (revenue) admitted that property rates in Delhi are much higher as compared to its adjoining areas such Faridabad, Sonipat, Ghaziabad, Gurgaon and Noida etc. Besides, there is a slump in the real estate market. The middle-class is facing issues of basic survival in Delhi and had made a beeline to own property in peripheral areas.
The purchase of property by Delhi’s urban middle-class has faced a steep decline during the past year, which has lead to a severe crunch in revenue generation by Delhi government’s Revenue Department. This has impacted the revenue collection in a significant manner.
After Lok Sabha polls in Delhi were over on 10 April, Lieutenant Governor Najeeb Jung was not interested in raising the circle-rate, in view of the model code of conduct that will remain in force till 16 May. Meanwhile, the department has been pushing for Jung’s approval of the requisite proposal. It is clear that there is an attempt to push for an early revision of rates.
In financial year 2013-14 that ended on 31 March, the department had a revenue target of Rs 3,800 crore. However, it could collect only Rs 3,000 crore. Circle-rates are the minimum area-wise property prices set by the government.
Registration fees and stamp duties are not usually paid because a major part of such transactions are often done via cash or black money. As a result the government often loses money. The last circle rate revision happened in 2012 when the minimum rate for valuation of land and immovable properties were increased substantially.
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