MONEY IN The real es­tate sec­tor’s black money prob­lem stems from a politi­cian-re­al­tor nexus, du­bi­ous land deals and am­bigu­ous land con­ver­sion pro­cesses

HT Estates - - FRONT PAGE - Jee­van Prakash Sharma

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

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