The land registrations and stamp duty revenue is severely hit due to Covid scare in Telangana, resulting the cashless possibilities and cut in state revenues, imposing new and additional taxes.
Even if the state government extends the lockdown for another seven to 10 days after May 30, it is likely to allow the Stamps and Registration Department to resume its functioning from June 10 according to sources.
The real estate was one sector that started looking up after last year’s first wave of the pandemic and it reflected in the revenues of Stamps and Registration Department from December 2020 onwards, since when the department has earned on an average Rs.900 crore a month.
Prior to that, the department’s revenue took a hit as online transactions, including registrations, were put on hold due to difficulties encountered in uploading data on the Dharani portal. However, from December onwards, the revenue of the Stamps and Registration department started going up with people actively looking for investments in agricultural lands, plots and apartments. This triggered a boom of sorts in the real estate sector.
Tired of lockdown-induced lifestyle changes, including the ‘Work from Home’ (WFH) culture, many in IT and MNC sectors preferred to move to the outskirts of the city and invest in independent houses as distance did not matter anymore with WFH becoming the new norm.
People also started appreciating the concept of farm houses for week-end stays after the monotony of lockdown. The restricted movement in the wake of lockdown forced many to curtail travel.
However, the boom in real estate transactions was short-lived due to the devastating impact of the second wave of Covid-19 raging since April in the State and elsewhere across the country.
Sources in the Stamps and Registration said that though they would not expect to see a good number of transactions immediately upon resumption of work, keeping the Sub Registrar’s Offices closed would have legal implications for those who, having finalized the transactions before lockdown, are waiting for registrations of their properties.
There are other necessities like registration of documents for public for various purposes. The department earned Rs.720 crore for the month of April. A target to earn revenues totaling Rs.15,000 crore from the Stamps and Registration Department was set for the current financial year 2021-22. But now it appears that it would be difficult to realize the target.
The department netted around Rs.200 crore for the month of May as of May 12, when lockdown was imposed in the first instance.
For the real estate sector to do well, public sentiment should improve first. The second wave of the pandemic has impacted a large number of people in every city and town. The savings of middle classes and common people in respect of families with Covid patients have been largely wiped out due to huge hospitalization bills. There have been instances of entire families being hospitalized. People not only liquidated the bulk of their savings, but also had to borrow huge sums. Many families lost earing members.
Those who had health insurance too did not get much benefit in Covid treatment as major percentage of the Covid treatment expenses had to be borne by the individuals.
Under these circumstances, common and middle class people are no longer considering investments in real estate. “There is huge liquidity crunch in the market as people are judicious in their spending only on essentials and health. With the talk of third wave, people would keep whatever money they have for health emergencies,” said a real estate company representative.
Another worrying factor for many in the salaried class is job security and income security. Barring government and big private companies, employees in many private organisations have either seen job losses or wage cuts since the first wave. Before the situation could improve for many of them, the second wave has dealt a severe blow by eroding their savings further. Some were forced to mortgage their jewellery and properties.
Small real estate companies have slowed down their activities. Big real estate development companies have made arrangements; learning from last year’s pandemic, they have retained a majority of their workforce to keep the work going on in their projects, sources said.
The next three to four months will be tough with people’s focus on keeping money aside for emergencies. “Though the budgetary target is Rs.15,000 crore revenue from the Stamps and Registration Department, if it earns about Rs.8,500 crore, it should be considered good revenue under the present circumstances,” sources said. #KhabarLive #hydnews