ITS NOTa news that finance ministers would like to hear in the midst of preparing budgets. Even as Sunil Tatkare, Maharashtra finance minister, gears up to present his maiden budget on March 25, he will have to be content with the states near-stagnant stamp duty collection, the second most important source of revenue after the sales tax.
    Maharashtras stamp duty collection for the current fiscal till February is only 3% higher as compared to the collection in 2007-08. The only respite for the state is that it has succeeded in achieving a positive growth in the stamp duty collection in 2009-2010 over the previous year as against the negative growth of 1.79% in 2008-09.
    But a closer look shows that the states total stamp duty revenue has stagnated at levels of two years ago. If the stamp duty revenue had grown at an average annual growth rate of 10% at which the states economy has been growing the revenue collection for 2009-10 should have been Rs 10,329 crore. But as against this, the state is likely to mop up just about Rs 8,900 crore in 2009-10 a shortfall of Rs 1,429 crore.
    With last years deficit of around Rs 700 crore and an additional non-plan expenditure (read: pre-election largesse), the numbers at the stamp duty office may not excite the state finance minister. The state also has to service a debt of Rs 1,85,000 crore.
    Stamp duty is one of the most important sources of revenue for Maharashtra. The state had collected Rs 8,537 crore in 2007-08. But the economic slowdown in the following year hit the states real estate sector badly. The reduction in property transactions reflected in the decline in stamp duty collection, which could mop up only Rs 8,384 crore in 2008-09.
    After witnessing a negative growth rate of 35% in the stamp duty revenue during the first two months of the current fiscal, the collections gradually improved from May 2009 onward.
    The highest increase in collections was registered in December 2009 when it jumped by 119% over December 2008, following the news that the ready reckoner rates the base rates for levying stamp duty on property transactions were to be increased. This saw a flurry of property transactions in the month.
    But contrary to expectations, the state government did not hike the ready reckoner rates in 2008-09 due to the slowdown in the real estate sector.

Source: The Economic Times