Govt plans to hike city land prices

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The government is planning to raise the prices of land in Dhaka and other metropolitan cities up to almost hundred percent in a bid to increase non-tax revenue in the national exchequer.

In addition, different government fees and train fares will also be hiked up as part of the plan, finance ministry sources said.

Different ministries have already been asked to draw up proposals on the possible fees and land prices, which would be implemented through the next budget.

Due to the big gap between the market prices and government prices for land in the capital and other metropolitan cities, the government loses huge revenue in the form of registration fees.

While per bigha (20 katha) land in Dhanmondi residential area costs Tk 80 lakh as per the government price fixed in 1993, the market price for per katha land in the area stands at Tk 2 crore, an astonishing contrast to the government price, a land ministry official said.

“In the Gulshan residential area, government price of per bigha land is Tk 2 crore, while the present market price of per katha land in the area is Tk 1 crore to Tk 1.5 crore,” he said.

Citing from the government’s 1993 price list, the official said that prices for per bigha land in Mohammadpur area was set at Tk 40 lakh, in Mirpur area at Tk 16 lakh, in Karwan Bazar and Motijheel at Tk 3 crore while in Chittagong city area, the price for per acre of land was set at Tk 1 crore.

“Fixed some 14 years back, these prices are way lower than the present market price,” he said.

Elaborating on the case of revenue loss due to the low government price of land, the official said that though the buyers pay as per the market price, registration of lands is done following the government price. Due to this, the government gets only a small amount in revenue whereas it should have received much more, he added.

The official, however, said that the government price for land would still be much lower than the market price even if it goes for 100 percent raise as per the latest plan.

During the immediate past BNP-Jamaat alliance government, a proposal was sent to the land ministry to raise the prices of land in metropolitan areas up to 100 percent of their existing government prices, sources said.

Later, a preliminary decision was taken to increase the land prices by 25 percent, but it was later cancelled due to pressures from government insiders, they said.

Finance ministry sources said apart from land price hike, the government plans to increase fees for NGO registration and renewal, import and export fees, fees for registration of insurance, joint venture companies and firms, passport fees, licence fees for narcotics, advertisement rates of Bangladesh Television (BTV) and Bangladesh Betar (radio), patent and design registration fees, environmental clearance fees and postage fees of post and telecommunication department.

The latest fees of these services were set in 2002, sources said.

“Living expenses as well as inflation have increased in the last few years, but the government fees were not raised,” a finance ministry official said.

About the increase in train fares, the official said that the last hike was in the end of 1980s.

“The government has recently planned to corporatise the railway sector and the increase in fare is part of the effort to make the railway a profitable venture,” he said.

The government earns about Tk 8,000 crore per year as non-taxable revenue which is 20 percent of the total revenue income, he noted. “In the government’s medium term budgetary framework, it has been stated that the non-tax revenue income will have to be increased to Tk 12,000 crore by FY09,” he said.

To meet the target, the government is now pondering over the ways to boost revenue income, the official said adding that the government needs more internal resources for the growing development expenditure following decline in foreign aid.

“The government thinks this is the right time to increase the non-tax revenue income as there is no political unrest now and chances of protest against the government plan are slim,” he said.

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