Most Indians Believe Black Money Is Rampant In Real Estate Sector: Report

The prevalence of unaccounted money in the real estate market of India has been a recurrent problem escalated by the issue of ‘Benami’ (no name) properties. Nine out of ten Indians still believe that the issue of black money runs rampant in the real estate and construction sector to date, according to a survey report by Local Circles, a research agency.

The report notes that real estate continues to be the top sector where black money finds favour with many properties still falling under the Benami (no name) category despite the government’s efforts to address the issue.

The nexus between real estate and black money lies in ‘property transactions deals’ wherein many lands are bought and sold through Benami transactions which hide the ownership of property behind a nominee or intermediary (third-party) thereby concealing the real owner.

Towards Eliminating ‘Benami’ Deals

The Ministry of Rural Development (DoLR) launched various initiatives to tackle these issues such as the introduction of the Digital India Land Records Modernisation Programme (DILRMP). As of December 31, 2023, 95 per cent of the country’s villages (A total of 625,137 out of 657,397) have completed the computerisation of Record of Rights (RoR). 76 per cent of the digitisation of maps in the country had been completed by August last year, as per the official data.

Scaling up on curbing benami deals in the rural areas, the government has started assigning the ‘Bhu Aadhar’ or Unique Land Parcel Identification Number. Within a year of its launch, more than 9 crore land parcels across the country have been given a Bhu Aadhaar according to official data. Earlier, registration of documents for properties happened manually but now e-Registration facility is also available.

Why Govt Wants To Link Aadhar With Property Registration?

Linking Aadhar with property registration will help the government further digitise property deals and eliminate fraudulent land transactions, making it easier to track and verify ownership of the land.

By introducing biometric verification and keeping the land records, the real estate sector will benefit in three ways: First, it will curb fraudulent practices such as the benami deals and tax evasion practices thereby eliminating the black money in the realty sector. Second, the property rights will be easier to protect. And third, this is a step up for the authorities in streamlining property management processes for the owners.

For the urban areas, the authorities have started digitising land records with the help of GIS mapping - an IT-based system for property record administration. Under this system, the land records are digitally updated and a tax administration is being established to strengthen the process.

As per the report, GIS mapping has already been initiated in some states across the country such as in the states like Delhi and Kerala. The Delhi High Court in December 2023 asked the state government to take note of a petition to link immovable and movable property documents with their Aadhar numbers. This was to tackle the issue of corruption, black money prevalence, and ‘benami transactions’ happening within the national capital.

In Kerala, a similar linking of Aadhar numbers with land documents is underway. The Aadhaar number of the landowner will be linked to the software ReLI (Revenue Land Information System) of the Department of Revenue to ensure that the Aadhar-based unique revenue record of the property of landholders is kept in the state.

As of now, over 2 crores of revenue records (Thandeper) are estimated to be in Kerala (including invalid records).

Some states, such as Karnataka, are offering incentives including benefits under government schemes for those linking their property documents to Aadhar, the report states.

However, despite such efforts, the process of linking Aadhar with property records has not brought much change to the system. According to the survey report, 62 per cent of property owners are yet to link their Aadhar numbers to their property. Many respondents reported not receiving any request to date to link their Aadhaar to their property.

In the rural areas, the respondents claimed the process was being taken up in a rudimentary way with the Patwaris (government officials in rural areas who maintain land records and collect land tax) reaching out to land owners and farmers using pen and paper.

90 per cent of respondents who believed that black money is deployed in the real estate and construction sector stated that additional audits and checks are needed to ensure all products and services in the sector by builders and their subcontractors are being purchased with ‘GST receipts’.

The report based on 46,000 responses from citizens across 372 districts of India shows the gap between the government’s policy and its scope that still needs to be realised on both urban and rural levels.