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| JK Govt under pressure to amend TP Act, imposing property tax | | | Mustansir
SRINAGAR, Sept 24: There is tremendous pressure on the State Government for implementation of the controversial Securitization and Reconstruction of Financial Assets and Enforcement of Security (SARFAESI) Act in the backdrop of an agreement reached between Jammu and Kashmir and New Delhi in 2009 to resolve their differences on protection of investments made by financial institutions in the state. Not only this pressure is also mounting on the Omar Abdullah government from the Centre to impose property tax in the state.
Pertinently the government constituted Property Tax Board on August 21, however, following stiff opposition from the stake holders, the government has deferred the move for the time being but authoritative sources told Early Times on Monday that there was tremendous pressure on the state government from centre to impose the property tax.
As regards to SARFAESI Act, central government enacted the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interests (SARFAESI) Act in 2002 which allows financial institutions across different states to auction properties in case borrowers fail to repay their loans. However, the Act was challenged in the State High Court on the grounds that New Delhi has no powers to make laws on immovable property given the special status of J&K under Article 370.
The issue triggered a massive debate when during his recent visit to the state, the RBI Governor raised the issue of State's commitment to amend the J&K Transfer of Property Act with Chief Minister Omar Abdullah to pave way for implementation of SARFAESI Act in the state.
However, sources on Monday disclosed the central government has again expressed its displeasure over the state government's 'go slow' approach on the twin issues and has started building pressure on the state to take appropriate action to impose property tax and SARFAESI Act in the state without any further delay.
"Following no action from the State Government, the Union government has again asserted for amending the Transfer of Property Act and imposition of property tax in the state" a senior official told Early Times.
The State government has maintained that the creation of State Property Tax Board is perquisite to access Central funds, however experts claim that the move has been taken without any groundwork..
The official said that the Centre has asked the state government to expedite the process of building consensus over the property tax bill and get it cleared by the Joint Select Committee.
Meanwhile noted social activist Shakeel Qalander told Early Times SARFAESI has nothing to do with the increase in Credit Deposit Ratio (CDR) but would "only dilute the special status of the State granted under Article 370.
Qalander said that SARFAESI is neither a necessary nor a sufficient condition for bank lending.
"At worst, inapplicability of SARFAESI should increase the risk of lending in J&K which, in turn, should have an impact on the pricing of loans and not the volume of lending. As such, the question that needs to be asked is how did the credit deposit ratio reach a level of 62.5% in 2008 and how did it plummet to 38% four years later?," said Qalander. |
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