Post demonetisation blues? Finally, real estate starts bleeding

According to experts with polls around the corner most people are holding on to properties Representation picDemonetisation has impacted every sector of the economy so it is only fair that the stamp duty and registration office mdash one of the major revenue generators for the state exchequer mdash also finds itself in some dire straits Before the bombshell policy decision the whopping target set for this financial year was Rs 23548 crore as compared to last yearrsquos collection of Rs 21767 crore But with less than three months in hand the department is far from its goal as it has so far only collected Rs 14869 crore April to December 31 with Rs 8679 crore nowhere in sight Add to that the prospect of election in February and the goal is near impossibleEven more worrying however is that it is being observed that rather than finalizing deals people re choosing the option of wait and watch and hold on to properties Insiders say there may be no price hike in the ready reckoner ratesDigital departmentSpeaking to midday from Pune Inspector General of Stamps and Registration Ramaswamy N confirmed the target and the collection figures so far However striking an optimistic note he added ldquoWe have three more months to go so hopefully we should be able to reach somewhere closer to the set targetrdquoWhen asked if he would attribute the low collection to demonetisation Ramaswamy replied in negative and said ldquoOur department was the first to go digital in 2012 so we stopped dealing in cash All stamp duty and registration payments across Maharashtra area done through epayment echallans etcrdquoBreaking down the numbersBut could there be a corelation still Letrsquos look closer Demonetisation was announced on November 8 2016 and statistics show that between April 1 2016 and November 8 2016 around 7721 properties were registered Postdemonetisation between November 9 2016 and December 31 there is a dip of 27 percent ldquoOur average per day revenue collection prior to demonetisation was approximately Rs 5830 crore but postdemonetisation it fell to an average of Rs 42 crore per day We have to wait for the situation to come back to normalrdquo said the IGRExpert speakReal estate expert advocate Sanjay Chaturvedi is of the belief that if the real estate industry mdashespecially in areas like Kandivli and Mulund mdash see corrections in the rate the overall real estate industry could witness a correction of up to 20 per cent in the next few months He said ldquoDemonetisation may be one of the reasons for the fall in revenue collection The public is not expressing any interest in buying properties as they are finding it difficult to even arrange for the marginal white paymentrdquoMeanwhile advocate Vinod Sampat cited a different reason ldquoThere is hardly any construction activity within Mumbai limits since the high court stay order that sought clarity from the BMC on disposal of waste management No redevelopment projects are also taking off at present making the situation a bit grimrdquoMix responses to RR rate hikeHowever while there are rumblings that there may be no change in the ready reckoner rates this year due to the already slow moving economy others like Sampat are waiting to see what the update will be saying it could be close to a hike of 15 per cent According to him the RR rates are specified area wise but a large discrepancy is witnessed in the manner in which the market prices are calculated But Chaturvedi on the other hand is of the opinion a rise in ready reckoner rates at this time may hurt public sentiments and even lead to a revolt which the ruling government may not want to happenHowever IGR Ramaswamy has only this to say ldquoWe decide the rates on the basis of area wise property sales We are still going through the voluminous data from April 1 2016 and will decide on this yearrsquos rate only after that is donerdquo