LPCurry's Blog: Black in realty to dip as circle rates doubled

NEW DELHI: The white money component of property deals is set to rise with the Delhi cabinet on Tuesday doubling circle rates across all eight categories of colonies. The rates now range between Rs 86,000 per square metre in category A, including Greater Kailash and New Friends Colony, and Rs 13,800 per sq m in the rural villages.

The new rates will come into effect once the notification is issued and the revenue department expects a surge of registrations in that window, in order to bypass the hike.

In her post-cabinet briefing, chief minister Sheila Dikshit said the decision was aimed at reducing the circulation of black money and to ensure that the government did not lose out on revenue, given the rampant undervaluation of properties. This is the first increase in circle rates since its introduction in 2007.

With the 100% hike, the complicated and time-consuming exercise undertaken by the revenue department to assign individual circle rates for all 2,480 colonies has been put on the backburner, thanks largely to revenue minister Rajkumar Chauhan's insistence that his colony, Behra Enclave, be rated no less than adjacent Guru Hari Kishen Nagar and Meera Bagh which, he argued, were low on infrastructure.

In the list drawn up by the department, Behra Enclave was categorized at Rs 43,000 per sq m, while the other two were tagged at Rs 86,000 per sq m.

Chauhan's opposition forced a revision of the entire list, even after the cabinet had given its approval on June 14. By conservative estimates, that exercise cost the exchequer Rs 120 crore in the four months that the proposal hung fire.

The cabinet meeting on Tuesday morning was the third in 24 hours to decide on the issue, which till the last minute saw both the revenue department and the minister pushing for individual rates for the colonies, sources said.

The cabinet was initially amenable to the idea and had, in fact, decided to invite public comments to preclude other complaints of discrimination. The delay in setting about that process, however, forced the government to change its mind. ''The chief minister had been pushing for a hike and it was largely at her instance that the separate rate chart was not adopted. We wil look at it again when the time for another revision comes," said a source.