Kerala - Kochi

Dip in land registration revenue likely

KOCHI: The revenue collection from land registration is going to be much lower this financial year (2008-09) than what the government had expected due to the dampening effect of the steps taken to check real-estate speculation.

Based on the uptrend in the last several years, the government had expected to net in least one third more than last year’s registration revenue. But, the rate of growth of revenue has disappointed the Registration Department, which is a key source of funding for meeting government expenditures.

During the crucial April-October period, when the officials had hoped to garner over Rs.1,500 crore from real-estate registration, the realisation was just Rs.1194 crore. By the end of the financial year, the gap between revenue forecast and actual realisation is likely to be even wider.

A senior Registration official told The Hindu that the heavy fall in the rate of growth was due to the drastic reduction in speculation-driven land transactions in cities and major towns. This was particularly visible in Kochi, the epicentre of real estate boom in the State. He noted that in Ernakulam district, compared to April-October last year, there was a fall of 20,000 land registrations in the corresponding period this year.

The feverish speculation in land had skyrocketed real-estate prices in urban centres, chiefly in the five city corporation areas. Big companies and upcountry builders had bought up large chunks of land, fuelling the speculation. Billions of rupees were invested in the sector in the last few years. However, early this year, the government took a series of steps that helped rein in the trend. As a result, the number of transactions in the urban centres fell steeply.

But, the official pointed out, the number of registrations had in fact marginally increased - from 7,28,621 in April-October 2007 to 7,86,830 in the corresponding period this year. Only, the revenue realisation from these transactions had been low. Registration of small plots of land - five or ten cents - had not ebbed as the demand for home-builders was still up. The big-time players were now off the field. The global recession has not so far made a dent on real-estate transactions in Kerala. The impact is expected to be minimal as the decline in the value of the rupee against the dollar has encouraged non-resident Keralites to pump in more money, which is expected to make up for the impact of the global recession.

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