Stamp duty cut isn't helping in filling state's coffers

BANGALORE: Recession kicked almost one year ago and now the economy is said to be settling down. But several revenue-rich departments which contribute a major chunk to the state chest, show no signs of recovery.
One such is the stamps and registration department, the second highest revenue earner through realty transactions. Since the beginning of 2009, the department has probably recorded its worst-ever turnover.Officials are racking their brains to meet their target of Rs 3,500 cr in the next six months.
The figures tell a sorry tale. During 2006 to 2008, Bangalore alone used to sweep in more than Rs 1,500 cr in the January-August period via registration fees and stamp duties. But this year till now, the sum is only Rs 917.57 cr. Despite a few incentives given to nurse the realty sector back to its booming self, the impact hasn't been visible.
The state in general hasn't fared well either. The first eight months of 2006, 2007 and 2008, on an average had registered revenues of Rs 2,300 cr through registration fee and stamp duty. From January to August this year, it has been a dismal Rs 1,538 cr.
"The market is better over the last two months. But it will take not less than another year to stabilise. The incentive given in the form of reduction in stamp duty hasn't helped much. High-end apartments are lying vacant. It's the budget accommodation that is at least selling. Apartments priced between Rs 25 lakh and Rs 30 lakh are being looked at as a good investment venture. But again, job insecurity is pulling people back," sums up P Dayananda Pai of Century Builders.
In 2009-10 budget, B S Yeddyurappa had announced a cut in stamp duty from 7.5% to 6% to bring the smiles back. The move was to encourage buyers to register properties with reduced stamp duty.
"We thought reduction in stamp duty would help in a big way but it hasn't. Now we've even started reducing guidance value of apartments to entice buyers. The khata issue in the new BBMP areas has also slowed down transactions. It's difficult to reach the target," say revenue department officials.