MUMBAI: With the generation of revenue being a major task before it, the cash-strapped Mahayuti government is likely to increase ready reckoner (RR) rates by around 10% in the state. While expecting โน55,000 crore this year from stamp duty collection, it hopes to mop up another โน15,000 crore from increased RR rates. The move, however, could adversely impact the real estate sector, as property will become more expensive.
The revenue department, which deals with stamp duty and registration, proposed the raise during its recent presentation to the finance department after it was asked about possible options to increase state revenue. Stamp duty and registration are the third-highest generators of revenue after GST and sales tax.
โRR rates are generally revised every year and come into effect from April 1,โ said a revenue department official. โThe state government has not revised the rates for three years for various reasons, including the two elections last year. The hike is now overdue, as the government is in dire need of revenue after the burden of populist schemes like Ladki Bahin.โ
According to the officer, the quantum of hike is determined by various factors. โApart from registrations in a year, changes and infrastructure development of different areas are also taken into consideration,โ he said. โThe unit in the rural areas is a village, while in the urban areas the units are smaller. In cities like Mumbai, there could be multiple units in one suburb. All this information has been collected by the town planning directorate, and the proposal will be finalised in February.โ
An officer from the urban development department said that the difference between the RR rates and the actual sale price had widened on account of RR rates remaining the same for the last three years. RR rates are determined by the government, and properties cannot be registered below these rates.
The government expects a whopping rise in revenue collection with the hike. โRevenue has exceeded the target we set for the last three years, as there was tremendous growth in the real estate market after the Covid-19 slump,โ said another officer. โIf RR rates are hiked from April 1, they could bring in at least โน15,000 crore. It is true that the hike in stamp duty could lead to an initial slowdown in registration of properties, but it will stabilise after a few months.โ
Vinod Sampat, president of the Registration Fee and Stamp Duty Payersโ Association, said, โThe RR rate hike will lead to a spiralling in flat prices and piling up of unsold flats. The accommodation industry is one of the highest employment generators and contributors to the GDP. Instead of hiking RR rates, the government should plug sources of corruption to increase its revenue.โ
