NEW DELHI: Top bureaucrats and senior politicians in power are trying to ensure that they get ample time to “dispose” of their ill-gotten property. The Central government on Wednesday told a bench of the Delhi High Court that it “needed more time” to respond to a petition that wanted to make mandatory the linking of Aadhaar with property. The High Court is hearing the petition. This is not for the first time that the Central government has demanded “more time” in the case. When the case was first listed in the High Court on 16 July 2019, the counsel of Government of India sought “more time” to respond. When the case came up for hearing again on 15 October on the completion of “more time”, the government again sought “more time” to respond, after which the court gave a new date of 20 November. On 20 November, this Wednesday, the Central government again sought “more time” to respond. The case will now be heard on 18 February 2020.
The efforts to delay the linking of Aadhaar with property may prove problematic for Prime Minister Narendra Modi’s dream to ensure that all Indians have their own houses by 2022. Experts say that unless and until benami properties are identified and such transactions stopped, it will be impossible for taxpayers to afford a house, as right now, the value of property is highly inflated since many properties were bought at high prices to “park” black money.
The petition was filed by Bharatiya Janata Party leader and lawyer Ashwini Upadhyay on 16 July 2019 in the Delhi High Court, seeking direction to the Union of India and Delhi government to link movable and immovable property documents of citizens with their Aadhaar.
Delhi’s AAP government, while responding to a notice issued to it by the High Court in the same case, said that linking Aadhaar was an optional requirement and that there was no provision in law to make it mandatory.
A study done by the National Institute of Public Finance and Policy (NIPFP), an autonomous research institute under the Ministry of Finance, at the instance of the United Progressive Alliance (UPA) government in 2012, had conservatively estimated black money generation in the transfer of real estate properties at Rs 5.7 lakh crore.
However, officials believe that this figure is much more now.
A senior government official said: “We receive multiple documents every day, addressed to the PM, detailing benami properties or properties held by politicians in their relatives’ names and that have not been declared. The number is huge. Last week, we got documents that showed how a councillor in West Bengal owned at least 27 properties under his name and the name of his relatives. Most of them though are benami. You can just imagine the magnitude of black money that is parked in real estate. It is the single biggest inheritor of black money. Unless and until this is addressed, corruption can never be tackled.”
Last week, state-run construction major NBCC, which is working to complete stalled projects of Jaypee group, revealed that it had encountered at least 2,500-3,000 instances of “ghost buyers”, as despite more than two years, no one has come to claim these flats.
“Even if we put a conservative price of Rs 50 lakh per flat for these 3,000 flats, you can calculate the amount of black money that we are looking at. And this is just for a single real estate company,” the senior government official quoted above added.
According to a Central government lawyer, the ruse which some politicians were using to justify the non-linking of Aadhaar with property—that the Supreme Court has prohibited using Aadhaar to “provide services”—was “laughable”.
“It is all about intent. Politicians and bureaucrats are just using the Supreme Court’s order to save themselves. If they really want, they can pass a law tomorrow and make Aadhaar mandatory with regards to property; there is nothing that is stopping them,” he said.
Vikas Wadhawan, Group CFO, Elara Technologies, the country’s only full-stack real estate technology platform that owns PropTiger.com, Housing.com and Makaan.com, said: “It will be a progressive move to bring in further transparency in the real estate sector, which is evolving day by day in regulation. However, the Aadhaar number is indirectly linked with property purchases as every financial dealing—loans, registry etc—does require the PAN card, which is already linked to Aadhaar. That, in turn, means that Aadhaar details are automatically shared. Linking Aadhaar directly will also help the government crack down on benami properties, though I am not sure if the sector is ready for such a bold reform, considering that the sector is already going through tough times. The move, however, will also simplify the registry process by bringing transparency.”
BENEFITS OF LINKING AADHAAR WITH PROPERTY
- Linking property purchase with Aadhaar will make it difficult to use undisclosed wealth to invest into realty projects and land assets. Those who possess benami properties will be compelled to sell such properties to avoid getting caught by officials and this will lead to an increase in supply of used property in the market.
- 2. Proper documentation, which will automatically happen once property is linked with Aadhaar, will give confidence to buyers, especially those who are looking at the secondary market.
- It will result in the quick disposal of cases related to property. The linking of Aadhaar to immovable properties will allow owners to firmly establish their rights on their properties and, thereby, create transparency in ownership details.
- 4. It will help create a nationwide database, on the availability of housing stock in the country and make the job of the taxing authorities much easier.
- 5. Once the transaction is linked to Aadhaar, the actual seller and buyer can be identified for each transaction. It can be established how many properties are held in someone’s name or in his relatives’ names at the click of a mouse. It will become impossible to hide the identity of the actual owner if Aadhaar is linked to the acquisition of the property.
- It will lead to massive reduction in cash transactions, as unaccounted for money cannot be used in buying real estate.
- Tax evasion on property will cease to exist. The practice of buying immovable properties under benami names will stop.