BLACK MONEY HAVEN
MONEY IN The real estate sector’s black money problem stems from a politician-realtor nexus, dubious land deals and ambiguous land conversion processes
Do real estate developers accept back money? The recent video expose by an Indian news website of real estate developers expressing their willingness to accept black money for selling their apartments is proof that they do. The recent recovery of unaccounted-for cash, diamonds and gold from Noida’s suspended chief engineer Yadav Singh is also indicative of the money-generating potential of this sector. It is very obvious that black money flows out as easily from this sector (in the form of bribes and payoffs to different officials and authorities) as it flows in.
“As black money moves in and out of the market a certain percentage is converted to white and is declared by the developer as his profits. False declaration of expenditure by developers in excess of what they have actually spent also generates black money,” says a realtor who doesn’t want to be quoted.
Speaking to this correspondence on conditions of anonymity, a real estate developer in the NCR area claims that he has become a player in the realty sector to manage the money his brother, an IPS officer, has made. “This sector can absorb any amount of black money. I have launched two projects and in both cases I paid huge sums to bribe officials and senior functionaries of the state government to get land. At the same time, if I want to get approvals quickly, I pay money to concerned departments,” he says.
The scope for making maximum illegal gain is through land transaction and conversion, the developer adds. “I have been in this business for the last four years and have learnt that this is where politicians, bureaucrats, lawyers and many big businessmen park huge sums of illegal money. Highly placed government officials and politicians have often requested me to park their black money as investments in my projects. I feel this is also the reason why development authorities are not inclined to strictly enforce realty bye-laws and development acts,” he alleges.
However, it is not very difficult for the government to tackle the black money menace, say realtors, lawyers, brokers and other experts on urbanisation.
“Who should be blamed for non- implementation of the Apartment Act, 2010, in Uttar Pradesh? Who is stopping the development authorities from lodging FIRs against developers who violage rules? By demolishing properties of small time developers, the development authorities are trying to prove they are strictly implementing building bye-laws, but they continue to allow big developers to flout rules. Despite the provision in the UP Apartment Act that no FAR be given to any developer without the consent of existing allottees of an under-construction real estate project, development authorities are blatantly