Why The Current System Fails Essay
1. Lack of transparency: The transaction price and registry pass the eyes of a few bureaucrats and clerks & bribes are common. This increases officials’ discretion, reduces transparency and accountability.
2. New Amendments and existing institutional structure are not effective and/or used: Digitization of land record and linkage to UID, establishment of base price across all districts etc. provides government ample power to monitor black money transmission. However, usage has been limited so far.
3. Low risk of punishment: Traditionally, the cases regarding tax evasion were tried in civil courts and the progress of trials were really slow. The 2015 Real Estate (Regulation and Development) Act established an Appellate tribunal. However, there still are chances that cases be dragged on by offenders for years and there’s no guarantee that tribunal would necessarily be better that civil courts. In other words, the threat to punishment is low.
Solution Based on our analysis, we came up with a three pronged approaches to resolving this issue:
1. Strengthen the monitoring system: India should leverage the online database system on real estate transaction and make it publicly available (the present digitization efforts have been picked up by only a few states). This will help strengthen the monitoring on real estate…