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News & Views on Indian Real Estate

Monday, January 07, 2008

Black Money - The key driver

Day before yesterday I was searching on the rise in black money in Indian Economy From what I searched: One thing that’s common to most cases with the black market is the real estate sector. Huge amounts of black money has been pushed into Indian real estate. And now a lot of money/surplus has been an impetus for prices in the real estate sector to rise. Even though the price could be paid in cash as in the market value of the property, in order to avoid taxes on stamp paper or other govt levied taxes one would deal in black money, their by fuelling the demand for "hot" real estate properties.Increase in prices of real estate means more demand for sectors/products/services related to realty. Like steel,cement and credit. As quoted here "A lot of distortions exist in Indian economy due to tax evasion and black money, etc. Real estate is the safest and best place to park black money" Also my dumb reasoning: If there is huge amount of black money in the system it means that the govt. would initiate measures in order to sterilize black money. It may be in the form of :

1. Tax saving:

a. By reducing the taxes

b. Widening the areas through which one can save taxes

2. Expenditure: By inducing expenditure on services/goods that would induce more expenditure in related areas which would cater to the process of diverting money into sectors that would eventually generate returns through the trickle down theory.

3. Price Rationalization: Black market may induce people to relook at prices. If a product is supplied at a certain price through a controlled mechanism and if the product is available at a cheaper price in the black market, it may play a role in stabilizing the prices. If let say people evade octroi, and use black money or a bribe to get away, one may consider whether the amount of octroi incurred is reasonable or not…..

Just because of the black money being spread across the Indian real estate market its always advisable to consult a good and well renowned Real Estate consultant like Axiom Estates.A real estate agent will guide you to - and through - the most important decision of your life.Choosing a real estate agent falls into the same bracket as choosing a medical doctor or a lawyer.

Axiom Estates is the premier India Property Service Provider Internationally. We work closely with all category A developers in India to offer the most comprehensive range of Prime new property developments in Tier I or Tier II cities. AxiomEstates offers the largest range of New Property Developments across India in Mumbai, Delhi, Bangalore, Kolkata, Goa, Pune and more.

Unknown User said...

Be it Black, white or Green money...the crux is...real estate investment is still a distant dream for a common man

Realty Rider said...

The participation in acquiring the property in India is no longer game of the rich but now with options of easy loans and payments the middle class has also got the feel to buy property in India The only thing to be done is to be vigilant and smart enough to check the entire market properly and consult a good real estate consultant like Axiom Estates. - http://www.axiomestates.com

Architectse said...

I really like your blog it’s excellent…


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