Raise property circle rates

Circle rates should be revised as and when there is a need to do so. The circle rates should at least 90% of the prevailing property prices in the are. Stamp duty of property transfer to be reduced so that cost of buying and selling is reasonable.

Now lets look at why I am suggesting this action. Anybody who has black money or who generates black money has to put it somewhere or invest it somewhere. The only place you can hide crores of rupees is in property. Just ask yourself that if you had Rs. 10 crores of unaccounted money, what would you do with it? The answer is simple and logical “just buy property.” You can take any case where a government official or a politician is involved in a disproportionate asset case, you will find that he and his family owns a number of properties. Why? Because there is no other place (except Swiss banks) where you can hide large amounts of unaccounted cash.

In fact, my experience in trying to buy a property in Okhla, New Delhi suggests that property has become a “black money currency.” You park black money by buying a property and when you need black money, you sell the property.

This action does not require any new bill to be passed or any discussion to take place. Nobody will disagree that all transactions should be recorded at its correct value. It just requires that a group of government officials be authorized to regularly monitor the real estate prices and keep changing the circle rate at least once every month if required in a particular area. This action will just implement the current law of the land. The following will be the benefits of such an action:

(a) The real estate prices will become reasonable.
(b) People will be able to buy and sell properties without any fear of fraud. Property transactions will become transparent.
(c) Property tax and Income tax collections will go up.
(d) Safe haven of black money investment will not be available. Less incentive for people to generate black money.
(e) All corruption related to property matters will be reduced. For instance, corruption at Registrar’s office will be reduced.

Actually, I have been surprised that the earlier finance minister levied a tax on cash withdrawal because the money that is not in the banking system will not be withdrawn from banks. So the tax on cash withdrawal will not help as much as doing what I am proposing to do. I believe that even in Satyam’s case, real estate and politicians will figure prominently if the investigations are carried out properly.

Avinash Narula