The latest decision of the Y S Jagan Mohan Reddy government in Andhra Pradesh to increase the land value and registration charges across the state is learnt to have come as a big shock to the real estate sector, which is already suffering from non-availability of sand and other material.
According to the real estate experts, the stoppage of works on Amaravati, the new capital region and also various other infrastructure works by the Jagan government, has already dampened the sector with thousands of workers involved in the construction works have left the state due to lack of employment.
Now with the government increasing the land rates by five percent in urban areas and 10 per cent in semi-urban and rural areas has come as a rude shock.
The investors in real estate sector are now said to be hesitating to put in money due to increase in land value and registration charges, a real estate promoter said.
Already, the land sales have come down due to the policy change of the government. And lack of availability of sand and cement led to several projects coming to a halt.
But, Jagan government, which is facing severe financial crunch, has thought the hike in land prices and registration charges will fill the coffers.
The officials expected that the hike will bring Rs 6,600 crore revenue through by the Stamps and Registration Department.
But if the sales are down and construction activity comes to a halt, the government will miserably falls short of target, say real estate sources.