Delhi govt proposes to revise circle rates

The circle rates of properties in Delhi fall under eight categories

The revenue department of the Delhi government has been working on a draft proposal to revise circle rates of properties across all the eight categories in the Capital, which, if approved, will add more funds to the state exchequer, officials aware of the matter said.

Circle rates are the minimum prices fixed by the government at which a property sale or transfer can be done. (FILE)

“The process for the revision of the circle rates is going on for the last one year. A draft report will be prepared proposing to revise the circle rate and it will be submitted to the minister (Atishi) for consideration. Nothing has been finalised yet, but the process is going on,” a revenue department official, who asked not to be named, said on Saturday.

Circle rates are the minimum prices fixed by the government at which a property sale or transfer can be done. These were last revised in the city in 2014.

The circle rates of properties in Delhi fall under eight categories, largely depending on the development of civic infrastructure, locality, and the types of houses constructed.

The Aam Aadmi Party (AAP)-led government, earlier this month, approved a district-wise, varied hike in the circle rates for agricultural land and those adjacent to the Yamuna barrage.

The proposal in the making will also not have uniform circle rates for all other properties across the Capital, a second official said.

“The proposed changes in circle rates cannot be revealed because the proposal is on the drawing board...the circle rate hike is likely to be up to 30%,” said the official.

A third department official said that the revision of circle rates is required to bridge the gap between market and government rates. “In the last nine years, the market rates of properties have gone up. Revision of circle rates is required to bridge the mismatch. It will increase the government revenue collection as well,” said the official.

Areas in the Capital are divided into eight categories — designated from A to H. Category A is for the most affluent, while Category H is for the economically weakest section of the society. Category A areas include Golf Links, Vasant Vihar, and Jor Bagh, among others, while areas such as Greater Kailash, Defence Colony and Safdarjung Enclave fall under category B. Under category C are areas such as Tagore Garden and Subhash Nagar, while areas under categories D and E are mostly middle-income colonies.

Last year, a revenue department committee suggested creating three subcategories for each of the eight categories, but the proposal was shelved as the exercise was “complex”, the first official said.

“Terming an area within A category as A1, A2 and A3 sub-categories would require reasons which should be agreeable to everyone. It turned out that the sub-categorisation was a complex exercise. The decision will, however, be reviewed when we prepare the fresh draft on revision of circle rates,” the official said.

The process of revising circle rates involves suggestions and review by multiple stakeholders, including residents, and the departments of finance and law. A final proposal is submitted to the elected government, which then sends it to the lieutenant governor (LG) for consideration and approval.

It is only after the LG’s approval that a notification is issued formalising the changes.

The Delhi government did not comment on the matter.

Meanwhile, experts said that a hike in circle rates will affect purchasing power, especially in the affordable housing segment. “Circle rates are a key driver of overall capital appreciation, which is one of the primary reasons why people invest in homes. Any decision to hike circle rates must therefore be taken with sufficient forethought and research on market impact... considering that reduced demand also affects revenue collections for the exchequer,” said Santhosh Kumar, vice-chairman, ANAROCK Group, a real estate services company.

On August 8, chief minister Arvind Kejriwal approved a hike in circle rates for agricultural land in Delhi and those adjacent to the Yamuna barrage. The rates will be finalised after LG VK Saxena’s approval. Officials in Saxena’s office said that he is yet to receive the file.