I want to start with a story of my friend Latesh, who is a software engineer in MNC. Few lines among the story of buying new house for his family, are as under,
"After securing a good job in a software firm, I also was in quest of searching a modest home in new Mumbai. So as a buyer, I have visited few builders offices enquiring about new projects and flats. I was astonished on the figures they were charging for mere a 240 to 520 sq feet build flat and charging for more than double are on same on the name of superbuilt up area 650 and 1050 sq feet for 1Bhk and 2 Bhk flat respectively. Also they want some portion in form of black money. The cost was excluding the amenities,parking space, light and other connections. Somehow I convince only few builders that all payment for basic cost will be made purely by cheque I.e. white money.
Then I approach to bank to have loan as I hardly have any money to pay the builder. After searching many banks I got on aggressive private sector bank who promise me to avail loan on home as well as stamp duty charges too but I have to made 15% advance payement to the builder. The deal got stuck because of non availability of those 15% and the dream of having home in mumbai was delayed as I began saving to have these 15% cost. Meanwhile the real estate prices have rise exponentially like never before.The prices uses to hike every week such that the figure of 15% was always became mere dream to turn into reality. Somehow after 5 years of accumulation I hardly manage to buy a small flat in tiler II city."
There are many Latesh in our country. The builders need to pay a junk of black money to buy land as land owners don't want to pay taxes. So they ask small portion of total price in cheque and balance part in cash. I am not Einstein to revelling this well known truth. However I want to point out that " why government is emphasising on higher stamp duties??"
When it is need of hour to increase the 'government prices of land and property' I.e. ready reckoned prices to match it market prices with reduction in stamp duty. This will cure many problems in one stroke. Suppose I have a piece of land having market cost 1 crore and ready reckoned price of 10 lakhs then I will prefer to sell it only for 10 lakh and balanced will take into cash which is totally unethical as well illegal. As in short term it saves the stamp duty on 90 lakh rupees which is about 4.5 lakh rupees in Maharashtra. This is the root cause of all fraudulent deals. Politicians have most of black money and they use this way to convert the money into assets. Now the government instead of acting on it put a service tax of 3.24% additionally. This will simply discourage the people to show the actual cost of transactions.
While there is a lot of chaos on issue of corruption I want to mentioned why do people do it.
The builders say for sanctions, approvals they need favour from beurocrats and politicians. For sealing the land deals they need to give a lot of black money. Now I asks beurocrats why do you require money they informed for postings they need to pay money to politicians. Now I went to politicians why do you people require moeney they informed that their voters ask for money during elections, hoarding , cut outs requires money. I understood the cycle of black money and it make me clear that the simple way to minimise it is by choosing the right person as our leader. It is the simplest way to end this.
Everyone wants a house,good transportations, security, good life, wants their children better education for which they require money. But we never taught that ethics are also important than the money.
Say every year around 1cr students have their 12th standard exam which is backbone if education system. However are there reputed colleges that will accomodate half of this populations for best education in world. The answer is simply no. So again the corruption in form of donations,contacts to secure admission in renowed colleges. When we are working to minimise the corruption, we also emphasis on these issues which are the root cause of corruptions. I will address many of them in forthcoming blogs with simple solutions."After securing a good job in a software firm, I also was in quest of searching a modest home in new Mumbai. So as a buyer, I have visited few builders offices enquiring about new projects and flats. I was astonished on the figures they were charging for mere a 240 to 520 sq feet build flat and charging for more than double are on same on the name of superbuilt up area 650 and 1050 sq feet for 1Bhk and 2 Bhk flat respectively. Also they want some portion in form of black money. The cost was excluding the amenities,parking space, light and other connections. Somehow I convince only few builders that all payment for basic cost will be made purely by cheque I.e. white money.
Then I approach to bank to have loan as I hardly have any money to pay the builder. After searching many banks I got on aggressive private sector bank who promise me to avail loan on home as well as stamp duty charges too but I have to made 15% advance payement to the builder. The deal got stuck because of non availability of those 15% and the dream of having home in mumbai was delayed as I began saving to have these 15% cost. Meanwhile the real estate prices have rise exponentially like never before.The prices uses to hike every week such that the figure of 15% was always became mere dream to turn into reality. Somehow after 5 years of accumulation I hardly manage to buy a small flat in tiler II city."
There are many Latesh in our country. The builders need to pay a junk of black money to buy land as land owners don't want to pay taxes. So they ask small portion of total price in cheque and balance part in cash. I am not Einstein to revelling this well known truth. However I want to point out that " why government is emphasising on higher stamp duties??"
When it is need of hour to increase the 'government prices of land and property' I.e. ready reckoned prices to match it market prices with reduction in stamp duty. This will cure many problems in one stroke. Suppose I have a piece of land having market cost 1 crore and ready reckoned price of 10 lakhs then I will prefer to sell it only for 10 lakh and balanced will take into cash which is totally unethical as well illegal. As in short term it saves the stamp duty on 90 lakh rupees which is about 4.5 lakh rupees in Maharashtra. This is the root cause of all fraudulent deals. Politicians have most of black money and they use this way to convert the money into assets. Now the government instead of acting on it put a service tax of 3.24% additionally. This will simply discourage the people to show the actual cost of transactions.
While there is a lot of chaos on issue of corruption I want to mentioned why do people do it.
The builders say for sanctions, approvals they need favour from beurocrats and politicians. For sealing the land deals they need to give a lot of black money. Now I asks beurocrats why do you require money they informed for postings they need to pay money to politicians. Now I went to politicians why do you people require moeney they informed that their voters ask for money during elections, hoarding , cut outs requires money. I understood the cycle of black money and it make me clear that the simple way to minimise it is by choosing the right person as our leader. It is the simplest way to end this.
Everyone wants a house,good transportations, security, good life, wants their children better education for which they require money. But we never taught that ethics are also important than the money.
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