State losing crores due to stagnant circle rates

Despite a significant increase in land prices in Palampur and surrounding areas over the past five years, the state government has not revised collectorate rates proportionately. These rates, which are set by the collector based on recommendations from Sub-Divisional Magistrates (SDMs), remain far below market prices. This has resulted in substantial revenue losses for the cash-strapped state government in the form of stamp duty and registration fees, amounting to crores annually.

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Currently, the market rate of land within the Palampur Municipal Corporation jurisdiction ranges from Rs 85 lakh to Rs 90 lakh per kanal. However, the circle rates continue to be between Rs 10 lakh and Rs 35 lakh per kanal. In certain areas, land prices have soared to Rs 1.20 crore per kanal. This disparity leads to significant revenue shortfalls for the state.

In wards I and II of the Palampur Municipal Corporation, circle rates vary between Rs 90 lakh and Rs 1.25 crore per kanal. However, just half a kilometer away, the circle rate drops to Rs 20 lakh to Rs 30 lakh per kanal, while the market rate exceeds Rs 70 lakh per kanal. Land prices have skyrocketed since Palampur became a municipal corporation in 2021, but the government has failed to adjust the circle rates accordingly.

This gap between collectorate rates and market prices has encouraged underhand transactions, generating large amounts of black money. For example, a recent land deal on the outskirts of Palampur valued at Rs 6 crore was officially registered for only Rs 2.5 crore, adhering to outdated collectorate rates.

A senior revenue department official explained that collectorate rates are revised annually based on SDM recommendations, which consider the average land cost. However, the government’s 7.5% cap on annual increases in circle rates significantly hinders efforts to align these rates with market trends. This limitation restricts any increase or decrease in circle rates to just 7.5% of the existing rates.

Despite media attention and repeated recommendations from multiple Deputy Commissioners for an immediate revision of circle rates, no action has been taken. Chief Minister Sukhvinder Singh Sukhu, after being approached by the media over a year ago, assured an inquiry into the issue. However, the situation remains unchanged.

The stagnant circle rates not only deprive the state of critical revenue but also perpetuate black money generation, calling for urgent intervention by the government.