Email
Print
ShareIt is said, and is backed by some research works in the recent past, that black money may constitute 5.1% to 20% of India's gross domestic product (GDP). A rough estimate in 1983 said about Rs36,780 crore of black money was floating in Indian markets. In 2005, a study conducted by Arvind Virmani, director of Indian Council for Research on International Economic Relations (ICRIER), put the figure at over Rs9,00,000 crore.
It is difficult to trace the exact share of Gujarat in the black money floating in the market, yet looking at the trend of real estate developers and businessman admitting unaccounted money before the income tax (I-T) sleuths, the amount must be enormous.
Sources said that in last 18 months, I-T raids on real state developers and others in Gujarat have yielded nearly Rs600 crore unaccounted wealth. What is surprising is the fact that realty developers were targets of I-T department in about 35% of around 50 search and seizure operations in the period. The remaining 65% includes businessman, doctors and industrialists. Real estate developers have admitted nearly Rs250 crore, which have been 40% of the unaccounted money seized in the last 18 months.
According to sources, the real estate is one sector where major investments take place and majority of that is unaccounted money. That may be one of the reasons the I-T's investigation cell keeping a watchful eye on the sector. Some of the well-known realtors whose houses and officers have been raided in recent times include Soumya Construction, Radhe Developers and Sheth Builders.
Sources, however, said the proportion of black money in real estate dealings has been witnessing a steady decline. There are some projects wherein the amount of black money has gone down - about 30%, much lower from 70% around five years back.
Says Manan Choksi, a noted chartered accountant in the city, "The land owners are charged heavily on capital gains and they want to avoid the same. So the builder has to compulsorily take black money. The construction industry, labourers, material suppliers and professionals also evade taxes by taking part of the consideration in black."
Choksi said the black money hurts the industry a lot. He pointed out that even today banks' home loans only finance 100% of white money component of the price of the unit. "Salaried people don't have black money. Fear of embezzlement for the entire chain and lack of accountability and transparency among others don't clear price of the property which hurts the resale of the property," he said.
