Registration of property-related documents falls by 40% in Maharashtra, Mumbai sees 20% slump in registrations
In an indication that demonetization of high-value currency notes has hurt the black money economy in the real-estate sector, registrations of property-related documents have fallen by about 40 per cent in Maharashtra. Mumbai has seen a 20 per cent slump in registrations with the fall in daily revenue collections at a significant 42 per cent.
"There is an impact on registrations; registration of documents has fallen by around 38.45 per cent compared to the regular figures," Dr Ramaswami N, Inspector General of Registration and Controller of Stamps, said.
Ramaswami added that the average registrations per day at 503 sub-registrar offices spread out across the state were 7,721, but the figures had reduced to 4,699 last week after the move — a decline of more than 39 per cent. However, they had marginally improved to a daily average of 4,752 in Mumbai in the past few days . Mumbai, which otherwise sees an average of 606 documents being registered daily, has seen this decrease to just around 484.
He said that the fall had been reflected since November 9, a day after Prime Minister Narendra Modi announced the decision to de-legalise the high-value currency and noted that it was almost the same for all documents.
Ramaswami said that the average daily revenue collections had fallen by about 17 per cent and stood at around Rs 48.39 crore, down from the earlier Rs 58.3 crore. He, however, added that Thane seemed to be relatively unaffected by the slump in registrations and revenues, with daily registrations and collections falling by just 15 per cent, and six per cent, respectively. Of the total documents registered in the state, those regarding sale and purchase number around 53 per cent. However, in Mumbai, it is at a lower 33 per cent. "The real-estate market seems to have been hit hard by the demonetization as transactions in the sector involve a strong cash component. Though stamp duty is paid online using the state government's GRAS system, people are finding it difficult to transact due to a liquidity crunch which impedes sale and purchase," noted a senior official from the department.
The declining property registrations and revenues may also bode ill for the already stressed finances of the state government. The department of registration and stamps, which is the second-highest revenue generator for the Maharashtra government after sales tax, has been able to meet just over 50 per cent of its Rs 23,548 crore target for the 2016-17 financial year with only about Rs 12,500 crore being collected so far.
"This year's targets are also high. The ready reckoner rates have been hiked by an average of six per cent, but the increase in collection targets far outstrips it at 12 per cent," an official explained.
"There is a slump," admitted a developer with projects in the eastern suburbs, adding that the "confusion and lack of clarity about what will happen in future" had led to people postponing or avoiding their investment decisions. However, he added that property transactions could pick up as things became clearer.
The department collected Rs 21,767 crore in financial year 2015-16, which was higher than the Rs 21,000-crore target set.
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