Thiruvananthapuram: The revenue from land transactions met a sharp decline in the ongoing financial year, while a substantial amount of income continues to reach the treasury from all other departments and sources.
The decline indicates that the 20 per cent increase in the fair value of land, which was declared in the last State budget, along with the steep rise in the permit fee for building construction, has significantly impacted the real estate sector.
The Registration Department portfolio, after being given up by the CPM, is now under the office of Ramachandran Kadannappally who is from a coalition partner of the LDF. The department has initiated efforts to send demand notices to those people who are suspected to have undervalued their property during the registration process. Many individuals have already received demand notices, stating that they must pay arrears amounting to thousands of rupees.
Usually during land transactions, the government collects 8 per cent of the fair value as stamp duty and 2 per cent as registration fee. The government collected a record amount of revenue under this head in the previous year. Although the government could collect 77.32 per cent of the targeted amount till November 2022, it was able to collect only 57.97 per cent till November this year, leaving a revenue gap of 20 per cent.
The government increases the fair value of land by 10 per cent each year. However, in the last State budget, it doubled this rate to 20 per cent at once, in an attempt to collect Rs 6,112 crore in one year. While last year's collection till November reached Rs 3,624 crore against a target of Rs 4,687 crore, this year's collection stands at only Rs 3,542 crore.
The significant rise in the fair value of land and its inaccurate assessment have deterred people from engaging in land transactions. Despite the formation of a committee three years ago to rework the process of assessing the fair value, no tangible outcome has been achieved so far.
Additionally, the government has raised the application fee for building construction permits and permit fees, for 1,200 sq ft, from Rs 400 to Rs 6,500. This increase is Rs 8,000 in municipalities and Rs 11,000 in corporations.
Despite a rising trend of individuals leaving agriculture and the expanded availability of land, the heightened fees and expenses associated with land acquisition, transactions, and construction have deterred many, particularly the common folk. The financial year is approaching a closure and the current situation demands overtime work from the Registration department to boost their revenue collection.
