Covid-19: With revenues taking a hit, Rajasthan mulls selling, leasing property
Reeling under the Covid-19 lockdown, the Rajasthan government is exploring ways to generate revenue by disposing or selling unused properties, through leasing or by taking help of other financial tools.
The revenue collection in Rajasthan in the first month of the 2020-21 fiscal has fallen by 70%. There was a shortfall of Rs 18,000 in revenue in the last fiscal, 2019-20.
In a recent meeting chaired by the chief secretary, discussions were held on ways to generate revenue to support the state economy as it fights the coronavirus disease.
“It was discussed in the meeting, how revenue can be generated, there are ways such as disposing unused properties and land or giving them on lease. But there are new ways also such as InvITs and consol bonds. The government is exploring all ways,” said a senior official, who attended the meeting.
He said all department heads are asked to identify properties, which are lying unused and could be sold or given on lease. Every department has different rules and procedures, thus making it a time consuming exercise. To tide over it, they are looking to centralise the list of properties, land and buildings, and to create a special purpose vehicle (SPV) to look into it.
The SPV will chalk out rules and procedures to dispense properties and if required necessary changes will be made in Rajasthan Transparency and Public procurement act, he said.
“The market is not stable and chances of getting the right prices would be difficult. In view of which, leasing a property for 20-30 years could generate revenue for the state without selling any asset,” he said.
In addition to it, options such as InvITs and Consol bonds are also looked into. He said InvITs are designed to pool money from a number of investors to invest in a project or assets that give cash flow for a period of time. Part of this cash flow would be distributed as dividend back to investors.
Similarly, Consol bond, also known as perpetual bond, is a financial security issued by the government as a means of raising money. They are issued at a fixed price and bear a nominal fixed interest rate.
Facing financial crunch, the state government had deferred a part of salaries of legislators and its employees, including the all-India services officers, such as IAS and IPS, in March.
A finance department official had stated that the biggest drop in tax revenue was seen in stamps and registration and vehicle tax because there was virtually no sale of property and vehicles.
The target for stamps and registration for April 2020 was Rs 466 crore, the state got only Rs 6 crore. Similarly, for vehicle tax, the target was Rs 500 crore, and the state has managed to collect only Rs 8 crore, which is a little more than 1 per cent.