Property slump hits revenue, Delhi govt 'loses' Rs 800 crore

Property slump hits revenue, Delhi govt 'loses' Rs 800 crore

Buyers prefer satellite towns like Gurgaon

Neighbouring cities Noida, Greater Noida, Gurgaon and Faridabad are eating into Delhi’s property market and as a result, Delhi government’s revenue collection reportedly fell ‘short’  by a whopping Rs 800 crore till March 31.

The government had expected a revenue of Rs 3,800 crore.  But by the end of last financial year only Rs 3,000 crore has been earned.

“The rates of properties in Delhi are much higher as compared to the satellite cities like Faridabad, Sonepat, Ghaziabad, Gurgaon and Noida. City’s middle class migrants are buying properties in these cities. Apart from this, the real estate market has become stagnant from last couple of years. This has led to a steep decline in Delhi’s real estate market leaving a severe crunch of revenue,” said a senior revenue department officer.

Now the city’s revenue department is pushing for a hike in circle rates up to 50 per cent, hoping to fill the gap by the end of current financial year. The department had constituted a committee for review of the circle rates and recommended a hike of 20-30 per cent for lower categories and 40-50 per cent for category A and B.

However, the demand is still pending as the model code of conduct has been imposed in the city till May 16, the day of counting of votes for parliamentary elections.

“We have requested the Election Commission of India to allow revision of circle rates,” the officer added.

 Circle rate is the minimum area-wise property price set by the government.

“Registration fee and stamp duties are not being paid because a major part of transactions in real estate are being done in cash or black money. In many transactions, the actual rate of property is much higher than shown on the papers. The property dealers are practising such things to avoid property tax and income tax. A substantial hike in the circle rates will help the government to earn more revenue,” he added.