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.