The Hindu : Tamil Nadu / Chennai News : Central valuation authority `will help set standards'

Online edition of India's National Newspaper
Monday, Oct 24, 2005

Tamil Nadu

Tamil Nadu - Chennai

Central valuation authority `will help set standards'

Staff Reporter

The move will lead to an overall improvement in land tax and administration and achieve economies of scale

CHENNAI: The setting up of a central valuation authority in the absence of a Valuers Act can hold several advantages ranging from the setting of valuation standards to achieving economies of scale on administrative costs, C.H. Gopinatha Rao, former national president, Institution of Valuers, said.

In his keynote address at a seminar organised by the Institution of Valuers, Chennai, on Friday, Mr. Rao said the authority could lead to an overall improvement in land tax and administration which had a three-tier system of governance. At present, valuation was being carried out by virtually anyone with no effort to improve the valuation services. Professional valuers played little role in property transactions at the State level or in property tax at the municipal level. Municipal staff and registering officers were not adequately equipped with valuation expertise. This called for State-wide parameters for valuation of land and buildings.

The Central and the State Governments could learn from the United Kingdom, where a valuation office functioned under a department. The standard could be determined by a valuation officer at the district or city level with the help of various Central and State organisations and professional institutions. It should also be made mandatory for the registrar's office to forward all sale transactions to the valuation office.

Sri Lanka, Hong Kong, Malaysia and Singapore had valuation organisations in the government sector and some form of legislation to support their valuation services. The development of valuation as a profession in these countries could be attributed to the establishment of graduate courses in universities. In India, any university that had faculties in Law, Economics and Engineering should be able to design a valuation course.

Mr. Rao said capital value may be superior to annual rental value as it will reflect the value of the property in alternate uses and can be calculated in terms of the cost of land and building. This value will be the baseline for assessment of all taxes. However, for this system to be successful the amendment of the Rent Control Act was necessary.

Licensing system

He called for a licensing system for real estate agents to maintain ethics in the profession and the enactment of a Valuers Act to instil discipline in the sector.

P.R. Seshadri, former chairman, Institution of Valuers, pointed to the widespread concept that residential land cost more than industrial land area-wise and that the unit rate for smaller residential plots was higher than larger plots. However, this was not always true, as the FSI specified by development authorities would directly influence the land value.

In his inaugural address, M. Ravindra, former Chairman of the Railway Board, said the Government faced problems whenever it attempted to recast the accounts of a service department such as the Railways or Telecommunication into the company format. .

P. Sivapprakasam, chairman, and A.A.V. Perumal, secretary, participated.

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