Circle rates in Delhi to go up by 35%? Work on to redraw proposal, ET RealEstate

August 27, 2023

NEW DELHI: The Delhi government’s plan to revise circle rates of residential and commercial areas in the capital is back on the drawing board.

Officials said the previous plan prepared by the revenue department proposing the creation of sub-categories in A to H categories of residential areas with multiple slabs of circle rates was returned by the finance department with certain objections and suggestions. “We have decided to carefully study the suggestions and rework our proposal,” said a senior revenue department official.

“Since there is a big gap in the existing circle rates and the market rate at which the sale and purchase of properties take place, we will propose a hike of up to 35%. But based on the feedback received from the stakeholders, we will also consider downgrading or upgrading the categories of certain colonies based on their location, facilities and existing market rates,” the official said.

Circle rates, or minimum rates for valuation of land and immovable property in the national capital, were last hiked for residential areas in all existing categories in 2014. The government, however, increased the circle rate on farming land earlier this month from just 53 lakh per acre fixed in 2008 to Rs 2 crore to Rs 5 crore depending on the location.

The Delhi government formed an empowered committee in 2016 and set up four working groups in 2021 to give recommendations to revise the rates, but no final decision could be taken. Former deputy CM Manish Sisodia had in March 2022 emphasised that revising circle rates as per the market rates had become a must to increase the government revenue in sectors other than GST and LG VK Saxena too had asked the revenue department in September last year to give a presentation on the proposal it had finalised, a perfect draft could not be readied.

According to officials, the proposal prepared by the revenue department failed to give proper reasoning for the creation of sub-categories. “Also, instead of considering the year of construction to calculate the building cost and depreciation on it, the proposal sent by us recommended that it should be computed on the current cost,” said an official.

Another senior official said the revenue department would have a relook if the sub-categorisation was actually required since it might lead to a very complex circle rate structure.

“The circle rates in Delhi were fixed as per the report submitted by the Dharmarajan Committee in 2004 dividing the city in eight categories. People have complained that the formula was faulty as several affluent colonies were in lower categories and their circle rates were less while some colonies were in A and B categories, which are not that posh. That’s why the sub-categorisation was suggested, taking the total number of categories from eight to 24,” the official said.

  • Published On Aug 27, 2023 at 02:00 PM IST

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