NCP leader Chhagan Bhujbal was arrested in money laundering case.
After the arrest of senior Nationalist Congress Party (NCP) leader Chhagan Bhujbal in the money laundering case, scared politicians across the party lines seem to be dithering from investing their unaccounted money in real estate. This has spelled trouble for the property industry and those developers who are close to politicians.
"Politicians cannot invest their money directly, so they use developers as their front. Time and again, politicians have channelled their unaccounted money, earned in way of kickbacks, through real estate projects. Now, the fear of probe and possible arrest has put them in a fix," said a property observer.
Another property agent in south Mumbai said that a few months ago, a senior BJP leader bought a sea-facing apartment in Worli for Rs 8 crore. "After Bhujbal's arrest, the BJP leader was too scared to buy the same property.. Now, he wants his Rs30 lakh back that he had given as an advance. Earlier, most newly elected representatives were interested in buying properties at Nariman Point and Worli. Now the situation is not encouraging and no one wants to invest. They are scared and cautious. It has badly affected my business. Politicians are my main clients for high-end properties. The entire business circle has come to a standstill," he said, requesting anonymity.
"Politicians also help in buying land. Usually, developers cannot buy plots under litigation. Besides, we have to seek a lot of approvals. Once the politicians are in, most of the technical, legal and local goon issues are resolved. This is unfortunate, but it is the ground reality," said a developer from Thane, requesting anonymity. He added that majority of the land holdings in Maharashtra was with the politicians only.
Property researchers and experts, however, have a different take. Pankaj Kapoor, MD at property research firm Liases Foras, said this was a temporary phenomenon and the unhealthy and corrupt body of economy has been de-toxified.
"Shedding extra fat on a treadmill may cause pain initially, but later the entire body is healthy. We cannot promote black money in any sort of the market. The real issue with the property market, however, is the sale. The sale is not happening, and so the entire industry is in trouble. The market should be driven by end-users," he said.
Kapoor admitted that the politicians were shying away from investing, which definitely impacted the flow of money in the market. "There is a huge cash crunch in the market. Black money was equally important for developers, who say black and white money are two wheels of their vehicle. Even if one wheel gets affected, it is difficult to survive the market. Illegality, however, cannot be the answer. The issues have to be resolved within the legal framework only. How long will you make your body addicted?" asked Kapoor.
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