Does India’s anti-‘benami’ law have teeth?
Does India’s anti-‘benami’ law have teeth?
It’s just ‘the beginning’
Prime Minister Narendra Modi has vowed anew to be relentless in his fight against corruption in India.
In his sights after the demonetisation drive: benami property or that acquired under an alias or someone else’s name.
“This is just the beginning. We have to win this battle and the question of feeling exhausted or stopping simply does not arise,” Modi said Sunday in his radio show “Mann Ki Baat.”
Violators face up to seven years in jail and real estate seizures under the Prohibition of Benami Property Transactions Act, which came into effect in November.
Implementing the law, let alone identifying benami properties, might prove to be thorny for tax authorities though. The land registry in India is notoriously tortuous, with records scattered in paper across various local offices.
More: Chinese mega developers to plough billions into Indian real estate
“We haven’t moved ahead with digitisation of land records,” governance expert Ashutosh Mishra told Straits Times. “How are you going to match everything?”
“The relentless pursuit of black money needs to be backed by solid execution,” Amit Maheshwari, partner at Ashok Maheshwary & Associates LLP, told The Economic Times. “Otherwise this will just remain on paper.”
The anti-benami legislation comes on the heels of the Union government’s surprise move last month to put high-value rupee bills out of circulation, quashing undeclared wealth and tax evasion across the corruption-ridden nation.
Over 30 percent of real estate deals are shifted in ill-gotten cash, Straits Times reported, citing data from Ambit Capital Research.
Some academics think the anti-benami law would ultimately have no incisive power. “They are only trying to scare the population so that maybe some people get scared and declare,” Arun Kumar, author of “The Black Economy In India,” told Straits Times. “Businessmen and black money people are hardened people. They know how to work around the system,” he said.
Read next: India’s Smart Cities Mission wants to transform urban areas into high-tech hubs
Source: Property Report