Circle rate paralysis: Himachal losing crores as land mafia blocks revision

Despite losing revenue worth crores of rupees every month due to the non-revision of circle rates, the Himachal Pradesh government has taken no concrete steps to address the issue. The matter has repeatedly been highlighted in the media, yet official inaction continues. In several districts, circle rates have not been revised for the past five years, even as land prices have skyrocketed across the state.

Circle rates — set by the Collector based on recommendations from Sub-Divisional Magistrates (SDMs) — remain far below prevailing market values. This gap has caused massive losses to the cash-strapped state exchequer through reduced stamp duty and registration fee.

For instance, in Palampur, Dharamsala and Kangra, market land prices range between Rs 95 lakh and Rs 1.20 crore per kanal, with some locations touching Rs 1.50 crore. However, official circle rates remain just Rs 25-35 lakh per kanal. In Palampur town’s Municipal Corporation Wards I and II, land prices range between Rs 95 lakh and Rs 1.50 crore per kanal, but within half a kilometre, circle rates plummet to Rs 20-30 lakh due to bureaucratic bottlenecks. Since Palampur’s elevation to municipal corporation status in 2021, land prices have surged, yet circle rates remain stagnant, resulting in huge revenue losses.

Information accessed by The Tribune suggests that an active land mafia has been pressuring the government to stall revisions. Despite repeated recommendations from multiple Deputy Commissioners for urgent revision, no action has been taken in over a year. A senior revenue department official noted that while circle rates are supposed to be revised annually, a government-imposed cap of 7.5 per cent on annual increases has prevented meaningful alignment with market prices. Interestingly, this cap was enforced without mandatory government approval.

This wide gap between market rates and official circle rates has fueled large-scale underhand transactions and black money circulation. For example, a recent Kangra land deal worth Rs 10 crore was officially registered at just Rs 3.5 crore under outdated collectorate rates. Experts point out that revising circle rates could help stabilise land prices and reduce black money circulation, as seen previously in Haryana and Delhi.