DNA Edit | Fighting black property: Aadhaar for real-estate registrations a right step

In a move that can bring about a drastic fall in the registration of benami properties, the central government is planning on making Aadhaar authentication mandatory before registering property documents like agreement of sale, wills, power of attorney and other documents.

This move is also expected to help Centre clamp down on the unimpeded flow of black money. The demonetization exercise which, in one stroke, sucked out 86 per cent of the currency in the economy dealt only a marginal blow to black money. This is because only 6 per cent of black money, as per various estimates, is held in cash.

A lot of the black money circulating in the economy before November 8 last year was channelled into benami land deals, besides foreign currencies and bullion transactions. Benami properties are registered in the name of someone who does not have the wherewithal to purchase the said property.

The common practice is to channel illegally stashed money into these shady deals. With the Aadhaar linking being made compulsory, many avenues will open up for agencies, when it comes to verifying the authenticity of the land purchase.

For instance, if a land deal looks suspicious, the Aadhaar database can be used to mine the coordinates of the individual, in whose name the land has been purchased. Consequently, other investigative agencies can pick up the thread and determine if the buyer can indeed account for the purchase.

There still is a long way to go for the government. Before the linking gets underway, the government will have to amend section 32 and 32A of the Registrations Act, 1908. Reportedly, a draft of the amendment will soon be sent to the Union Cabinet, and once it is approved, it will be placed before Parliament. Meanwhile, the Department of Land Resources under the aegis of the Ministry of Rural Development has asked states to notify rules giving effect to the requirement of Aadhaar before registration of property documents.

For this initiative to succeed, it is necessary that the states not only come on board but also lend requisite infrastructural support. Without a robust implementation by the states, this move will come to a naught. What’s more, the monolith of the black economy in India will remain undented. As per one estimate, the size of the black economy in India is between 7 to 40 per cent of the GDP. The cumulative loss to the Indian government in terms of tax revenue is humongous because of benami land deals, and this move will definitely help bring down the loss in revenue to the government coffers.