Mumbai's retail real estate market is slowly coming out of the shadow of demonetisation woes. If the government's income from tax on property transactions is an indication, buying and selling of apartments has picked up once again.
At the start of the financial year, the government had expected to net Rs 24,000 crore from stamps and registrations fee in 2018-19. According to the latest official estimates, more than 86 per cent of the targeted revenue or Rs 20,670 crore had been realised by December-end itself.
With the real estate already reeling from a general economic meltdown, buying and selling of properties in the Mumbai Metropolitan Region (MMR), which is India's biggest real estate market, had slowed down considerably after the demonetisation in 2016.
"The data suggests that some buoyancy may be returning to the real estate market, which is a good sign. We are expecting that the trend will continue. We may end up collecting more revenue (from tax on property transactions) than the target estimated in the budget," said a senior official.
Spurred on by the positive growth story in the real estate sector, Maharashtra's income from own tax sources is looking northwards. As per the latest income projections released by the Maharashtra's Accountant General (AG), the state government had already met 70 per cent of its targeted revenue – Rs 1.62 lakh crore out of Rs 2.32 lakh crore – from this income source by December-end. While the accounts for collections in the month of January are still being reconciled by the AG's office, finance department sources said the same trend had been witnessed last month as well.
Another sector where there has been a significant upward swing (compared to last year) in tax revenue is excise duty, said sources. According to sources, the government had already mopped Rs 11,500 crore out of the targeted Rs 15,343 crore (roughly 75 per cent) by January. Going by the AG's data, excise collection at the end December was Rs 10,545 crore. There has been a 14 per cent growth in excise revenue compared to last year. But sources said that restrictions on running bars and wine shops near state highways had impacted the state's revenue last year. The curbs have now been removed. There has also been an increase in excise duty levied on beer and Indian Made Foreign Liquor, sources said.
Maharashtra's biggest revenue earner – GST and sales tax revenue – had met 62 per cent of its target by December-end, reveals the AG's report. At the start of the year, the government had projected a total revenue collection of Rs 1.41 lakh crore from GST and sales tax revenue. Till December, more than Rs 87,463 crore had been amassed.
On the downside, the income from non-tax revenue has been performing below par. While the state had projected a collection of Rs 22,785 crore in 2018-19 at the start of the year, barely 38 per cent of this has so far been collected. "Some of the targets under the head were unrealistic. Income from land revenue has been far below than expected," an official said.
Overall, the AG's accounts show that the state government is on course to meet its revenue collection target of Rs 2.86 lakh crore in 2018-19. Till December-end, it had already collected Rs 1.90 lakh crore.
At a time when the revenue expenditure has continued to rise, the positive growth in revenue collections is expected to give some fiscal space to Devendra Fadnavis-led state government, which will present an interim budget for 2019-20 on February 27.