Circle rates not revised as per market value in Palampur, government loses revenue

Ravinder Sood

Palampur, July 31

The government decision to maintain a cap of 7.5 per cent as regards the revision of circle rates of various immovable properties is resulting in revenue loss to the state exchequer.

7.5% revision cap

• There is a 7.5% cap on the revision of circle rates of immovable properties in the state
• The circle rate of land in most of the areas continues to be between Rs 10 lakh and Rs 15 lakh per kanal, although the prevailing market rate is well above Rs 50 lakh per kanal

There has been a manifold increase in the market rates of immovable properties in Himachal, but the state government has not revised the circle rates proportionately.

At present, the market rate of land in most of the areas is above Rs 50 lakh per kanal, but the circle rate continues to be Rs 10 lakh to Rs 15 lakh per kanal. The state is thus losing revenue on the sale and purchase of land. In many areas, land prices have gone up to Rs 1 crore per kanal.

In wards I and II of the Palampur Municipal Corporation, the circle rate is between Rs 90 lakh and Rs 1 crore. However, if one moves one kilometre away, the circle rate falls to mere Rs 10 lakh per kanal.

In the absence of the revision of circle rates according to the prevailing market rates, cash transactions in the sale and purchase of such properties have touched a new high, thereby generating black money.

A senior revenue official says the circle rates of land are revised, as per the recommendations of the SDMs concerned by taking the average cost of land during the year.

The state government has, however, kept a cap of 7.5 per cent on the annual increase of circle rates. This means the circle rates of properties cannot be increased or decreased by more than 7.5 per cent of the prevailing rates. As per the government instructions, the prevailing market rate is no criterion for fixing the circle rate of land in the state, he says.