Modi declares war on benami property

PM thanks people for ‘enduring pain’ after demonetisation, says rules changed keeping feedback in mind

NEW DELHI: The next step in the war against corruption would be a crackdown on benami property, Prime Minister Narendra Modi said Sunday, as he again thanked people for enduring the “pain” caused by the scrapping of highvalue currency.

Modi, who has come in for criticism for scrapping `500 and `1,000 notes that triggered a cash crunch, said if curbing corruption required “even tougher steps, those would be taken”.

“You are possibly aware of a law about benami property in our country which came into being in 1988, but neither were its rules ever framed, nor was it notified. It just lay dormant,” Modi said during the year’s last edition of Mann ki Baat, his monthly radio programme.

“We have retrieved it and turned it into an incisive law against benami property. In the coming days, this law will also become operational,” he said.

One of the biggest criticisms of demonetisation is that cash accounts for only 6% of the black money, the bulk of which is parked in real estate, bullion or is stashed abroad.

The benami transactions (prohibition) amendment act, which came into effect from November 1, provides for seven years in jail and a hefty fine for offenders. The punishment is similar to that awarded for heinous crimes such as dowry death and robbery or dacoity. Ill-gotten properties can also be confiscated under the benami law. A property is benami if it is paid for by someone other than the owner and the source of income is not known. The property could be in the name of spouse or children.

To avoid paying taxes, many black-money holders prefer to buy property in the names of family, friends and even staff.

Modi’s push against such properties will not only expand his “battle against black money” but also blunt Opposition’s criticism, which has accused him of wrecking the country’s economy.

Sources, however, said the law should be tightened for it to be effective. Various options were being considered to deal with the benami-property holders and like the demonetisation drive, a “surprise move” could be announced, an official told HT.

“We have the required information and we are equipped to deal with it... once the act is implemented, we will start taking action against those who hold such benami properties,” a finance ministry official, who refused to be identified, told HT.

Defending frequent changes in rules after he announced demonetisation on November 8, Modi said the norms were changed to outsmart people who were exploring new ways to get round the guidelines.

The changes, at least 60 of them at last count, were signs that the government had blundered in remonetisation, the Opposition had said.

“When I have resolved to wage battle against them, they too come up with new tactics everyday to thwart our efforts. To counter them, we too have to devise appropriate new responses and antidotes,” Modi said.

The PM, often accused of being pro-business and anti-poor, invoked Jesus Christ, saying demonetisation would benefit the poor. “Jesus said the poor do not need our favours but our acceptance with affection,” he said on Christmas Day.

When I have resolved to wage battle against them (frauds), they too come up with new tactics... To counter them, we too have to devise... new responses. NARENDRA MODI, Prime Minister