India's uphill battle against 'black money' in real estate

Ulwe, a village of dusty, uneven streets on the outskirts of Mumbai, lacks basic amenities like water supply and electricity, but a two-bedroom, 1,000 sq ft house costs about Rs 50 lakhs, beyond the reach of many middle-class Indians.

Ulwe, a village of dusty, uneven streets on the outskirts of Mumbai, lacks basic amenities like water supply and electricity, but a two-bedroom, 1,000 sq ft house costs about Rs 50 lakhs, beyond the reach of many middle-class Indians.

According to prospective buyers, many developers will demand up to 30 percent of that price in cash, a small slice of the ubiquitous, unaccounted "black money" that costs India's straitened exchequer billions of dollars in lost taxable income.

Legislation that would bring more transparency to the industry will be considered during the winter session of India's parliament, which starts on Thursday.

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However, investors, tax officials and bankers Reuters spoke with were sceptical the law would stamp out illegal practices they say are closely entwined with politics.

"Four out of 10 developers were ready to do it in full white and six were asking for a black component," said 35-year-old Umesh Kolhapure, who was looking for a three-bedroom house around Ulwe, near the proposed site of a new international airport serving the country's financial capital.

Recent high-profile scandals in the coal and telecoms sectors involving large corporate houses and politicians have rattled investors in Asia's third-largest economy, where undeclared wealth has long been rampant.

Real estate accounts for a large share of illicit transactions, thanks to lax regulation and the numerous approvals needed for projects, making many ordinary people party to corruption and pricing some of the emerging middle class out of the market.

That has prompted the newly-appointed housing minister, Ajay Maken, to push a real estate regulation bill.

Designed to bring greater accountability, transparency and prevent fraud and delay, the bill proposes appointing the sector's first national regulator. However, it will not have control over land deals, which is where illicit activity is widely believed to be rampant.

Have we accepted corruption in public life? -- Prof. K. C. Mehta

Published: November 17, 2012 23:42 IST | Updated: November 18, 2012 00:01 IST

Have we accepted corruption in public life?

Professor K. C. Mehta

The Hindu Social activist Anna Hazare. File photo

Political corruption was there even during the time of Pandit Nehru. But later a rapid erosion in the selfless dedication of leaders led to the growth of corruption in the entire body politic. National interest became nobody’s business. Welfare schemes turned the biggest source for siphoning off public funds.

Scandals of free India

In the post-independence period, only six out of the 14 Prime Ministers had a term of five years or more: Nehru about 17 years, Indira Gandhi 16, Rajiv Gandhi five, Narasimha Rao five, Atal Behari Vajpayee six, Manmohan Singh over eight years to date.

Out of these six Prime Ministers who really matter, five were from the Congress, accounting for 51 years of Congress-led governments. Out of these 51 years, 38 years belonged to the Nehru dynasty. The article gives an overview of corruption during their tenure. All figures are converted to the 2011 price level to make them comparable. The Wholesale Price Index Numbers are used for the purpose.

Govt. of India should act now to stop illegal mining of Atomic Minerals

IAEA Estimates of thorium reserves in tonnes (2005)

Depletion of nation's mineral wealth in placer sands

The note calls attention to a serious issue of depletion of nation’s wealth by illegal mining of placer sands. The illegality is primarily related to avarice of certain individuals controlling corporate entities resulting in a monopoly situation, and failure of government agencies and operatives to enforce the laws of the land to ensure that public interest is served by controlled and regulated but sustainable use of resources of mother earth.

When the fence eats away the field, who is to save the crop for present and future generations? This is the crux of the issue of fighting corruption leading to depletion of nation’s wealth in many sectors. This note is about such depletion of nation’s wealth in minerals of national importance, including Atomic Minerals.

Immediate action is required from Govt. of India:

• To ban mining of Minerals of National Importance (MNIs) from placer sands
• To seize the mined quantities of such minerals from the miners and their associates
• To hand over control of the mining areas to a paramilitary force
• To levy fines on the parties involved in illegal mining activities
• To constitute a Mines Regulatory Authority for Minerals of National Importance
• To cancel and withdraw the illegal notification of DAE issued in Jan. 2006 which transferred ilmenite to Open General Licence treating it as a non-Atomic Mineral (issued in anticipation of Amendment of Act No. 67 of 1957, an amendment which was not approved by the Parliament) which violates the provisions of Act No. 67 of 1957 (List of Atomic Minerals detailed in Item B of First Schedule of the Act of 1957: Mines and Minerals (Regulation and Development Act)
• To constitute a Commission of Inquiry on Atomic Minerals and other Minerals of National Importance, on the lines of Justice Shah Commission inquiring into iron and manganese ore mining

Modus operandi of the Rs. 1 lakh crore loot