Karnataka Stamps dept stares at revenue deficit

Karnataka Stamps dept stares at revenue deficit

A trust deficit from consumers besides the challenges faced due to “reforms such as demonetisation, GST and RERA” have impacted the real estate market.

The Department of Stamps and Registrations is staring at a temporary slump in revenue. Indications are that the department will miss its revenue targets for the second time since 2016-17 (demonetisation year), due to a slump in apartment sales and other factors.

This comes on the back of a sharp decline in revenues that the Transport Department suffered earlier this financial year. The poor show by two of the four major revenue earning departments is expected to pile woes on the state’s finances, already affected by the massive cost of rehabilitation of flood-hit regions of the state.

Industry experts, who acknowledge the slump, say that the department’s revenues will improve when real estate firms and buyer sentiments recovers due to recent reforms of the government.

Shveta Jain, managing director, Residential Services, Savills India told DH that a trust deficit from consumers besides the challenges faced due to “reforms such as demonetisation, GST and RERA” have impacted the real estate market.

“In 2019, new launches were impacted as non-banking financial companies stopped funding real estate firms,” she said. In order to address the crisis, she said the sector was concentrating on mid and affordable housing units to ensure stable supply and demand.

Sources in the department said indications are that revenues of the department will be hit and it might miss the annual revenue target set for the second time since 2016-17. “Reports by several real estate analysis firms have pointed at a 20% decline in sale of apartment units. Registration of other properties might be affected similarly,” sources said.

According to data, of the Rs 11,828 crore targeted for 2019-20, the department had collected Rs 8,247 crore in the first three quarters of the year. In order to meet the target, it will have to collect Rs 3,581 crore in the last quarter. Revenue during the first 15 days of the quarter is expected to be low as it is considered inauspicious according to the Hindu calendar.

When contacted, K V Thrilokchandra, Inspector General of Registration and Commissioner of Stamps said that department was confident of meeting the targets set by the government.

“Though the department is marginally behind in revenue collection, we have collected Rs 500 crore more compared to the same date last year,” he said.

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