After demonetisation, benami properties to be next target says PM Modi

The government will crack down on benami properties, says Prime Minister Narendra Modi. That’s the right thing to do to fight black money. But the government must ensure that the crackdown does not lead to undue harassment by officers empowered under the law to unearth and confiscate benami properties. Benami properties are registered in the name of third parties, fictitious or otherwise, by the owner who remains anonymous, making these properties obvious instruments to generate and hide wealth. Rightly, now that an amended law known as the Benami Transactions (Prohibition) Amendment Act is in force, the government wants to act to step up its campaign against black money.

However, glitches must be removed. The law says whenever a benami property is confiscated, all the rights and titles will vest with the Centre. Safeguards must make sure that this expropriatory power is used with extreme care. The law only exempts benamidaars such as a member of a Hindu Undivided Family or a trustee, and that too only if the property is funded from known sources of income. Adjudicating authorities and an appellate tribunal will deal with benami transactions. Every suit or proceeding with respect to a benami transaction pending in any court — other than a high court — or tribunal or before any forum will be transferred to the adjudicating authority or the appellate tribunal. An efficient functioning of the judicial system is a must to lower disputes and cut needless delays in confiscation of benami properties.

Real estate is a sink for black money, facilitated by unclear titles. This must change. The government must also ensure guaranteed ownership to property holders. The way ahead is for India to adopt the Torrens system wherein land ownership is directly registered by the state. Clear government-guaranteed titles will curb fraudulent realty deals. We also need institutional reform to reduce the artificial scarcity of urban land and stop off-thebook funding of political parties. Benami property deals will cease when every penny is accounted for.