Emergic: Rajesh Jain's Blog

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Corruption Stories – Part 4

October 28th, 2010 · 5 Comments

We all groan about the high prices of real estate in India’s cities. Rates in South Mumbai have reached Rs 75-80,000 per sq ft ($1,800 per sq ft). Have we ever thought about why that is the case?

In urban areas, real estate is one of the biggest money generators for politicians. About 25-30% of the money needs to be made to politicians and the corporators, starting from the land, the construction contracts and then the various permissions. This is because some of the chief ministers also have to work on targets – sending money to their political masters in the capital.  (A few years ago, I had a story about how one CM candidate pipped the favourite by offering a higher minimum guarantee to Delhi.)

In resource-rich state, it is mining rights. In land-rich states, it is real estate cuts. And We, The People of India, pay the price everytime and everywhere.

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5 responses so far ↓

  • 1 Akshar // Oct 29, 2010 at 1:24 am

    In rural/semi-urban areas like Goa, most of the land is categorized as “agricultural land”. This land has little value as real estate unless it gets government’s NOC to get converted into non-agricultural land.

    A poor farmer who wants to sell it off either has to sell it at meager price to a builder who with his connections can get the NOC easily [The rates in Goa I am told are Rs. 150 per sq. m to the concerned minister exclusive of local MLA, Panchayat and other who have strong nuisance value.] OR he himself has to get the NA which almost certainly he wont get.

    When a farmer refuses to sell some high value land, like the one close to sea shore, it is encroached. If the man wants to move to court the advocates refuse to take up his case, the land record office tells him that he records are lost, the court refuses his plea on some technical grounds and so on.

    The family whose generations took care of the land gets nothing and some fat ass politician and builder gets ultra rich overnight.

    What kind of nation are we leaving behind for our kids ?

  • 2 vivek // Oct 29, 2010 at 8:23 am

    Everybody knows that rates are not justified, people who evades tax are buying flats on flats, and people who pays tax cant buy home as they dont have 40% black money to give to builders.
    Stop Black Money in Real estate : As this sector is not regulated, all the black money which comes from tax evasion comes into this sector, whether from businessman, politician, or underworld.
    Suppose a person buys flat of 30L and give 10L as cash, then the registration amount is only 20L ( govt loses income from that 10L).. then after one year he sells that property in 40L out of which he takes 20L as cash, so again the registration amount is 20L only and prices of the property increases by whooping 33%. IT dept thats why chasing real estate industry and share holder also not getting the correct benfit.

  • 3 vivek // Oct 29, 2010 at 8:24 am

    But do writing articles or comments only solve this problem ???? there are 40% people living bpl, who will take care of them…. I am feeling BIG social unrest in India in future..

  • 4 Taxi // Oct 30, 2010 at 5:40 pm

    Agree with Vivek, India is a country that needs attention. But India is not an unique case, this is happening all over the world.

  • 5 MP // Nov 1, 2010 at 4:13 am

    We all know corruption is there. From lower class to upper class, everyone pays. I will not be surprised to know that even politicians pay to someone. But well, then why it is there and how it could be solved.
    It is there, because it is easy. Anyone can be corrupt and live with it. It is now even socially acceptable to be corrupt. Even if you are caught, you only have to pay to be free. Right?! I think basic problem is that “WE” copied the law from different countries and did not made it flexible enough to change quickly. Law, Police, Court and whole system around it is so colonial. Only the person in-charge will get benefit. And, it is made sure that it can not be changed easily. So Simple!!
    We had law like TADA to counter terrorism. Do any one of us can think having such law against corruption? Why not?!

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