Mohandas Pai, chairman of Aarin Capital and former CFO of Infosys, has strongly urged the Karnataka government to reconsider its reported plan to increase the guidance value of properties in an attempt to address a revenue shortfall. Reacting to reports on the proposed move, Pai called it “very, very wrong to burden citizens.”
"Mismanagement by the government cannot become a tool to hit citizens,” Pai said, adding, “We are suffering from high taxes, declining quality of life, and high corruption. Please relook.”
The Times of India reported that a combination of factors, including the implementation of the e-khata system aimed at preventing fraudulent property transactions and the mid-December transfer of sub-registrars, has led to a significant slowdown in property registrations across the state.
In December 2024, only 1.5 lakh property documents were registered — the lowest monthly figure in the ongoing financial year. Over the first nine months of the financial year, more than 17 lakh documents were registered, but numbers have been falling since October, when 1.7 lakh documents were recorded. Registrations further dropped to 1.6 lakh in November and hit a new low in December.
This decline has resulted in a revenue shortfall of Rs 1,971 crore from stamp duty and registration fees, with the department collecting Rs 16,416 crore against a target of Rs 18,388 crore by the end of December 2024. To offset the revenue deficit, the state government is reportedly considering a second hike in the guidance value of properties this year. A previous increase of 15-30% was implemented in October.
Earlier, Pai labeled the Siddaramaiah-led government as the "most corrupt government" in Karnataka's history, alleging large-scale corruption and fiscal mismanagement. Speaking on the Bharatvaarta podcast, he accused the administration of prioritising populist measures over essential investments in education and skill development.
"Siddaramaiah has turned Karnataka's once-surplus revenue into a significant deficit," Pai said. “(Former CM Basavaraj) Bommai left us with about Rs 22,000-23,000 crore revenue surplus. Next year, Siddaramaiah made a Rs 4,000 crore revenue deficit. This year, he's got another Rs 27,000 crore deficit. That's a Rs 45,000-50,000 crore swing in expenditure. And where has the money gone? It's gone for freebies."
Pai further criticised the state government for borrowing funds to finance these giveaways. "You are borrowing money to give freebies,” he said, adding that such measures hurt the state’s financial stability.