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Evicting shops - Metro Style....

Black market vs Market rate

Generally, people buy and sell property for X rate and register it at an abysmally low level in order to generate black money and escape stamp duty. This is why there is a clash between the authorities and the owners at CMH Road and MKK Road and indeed elsewhere around the state.

For example, one knows that if one wants to purchase prime commericial property in Mahakavi Kuvempu Road (MKK Road) in Rajajinagar, one has to shell out the 'black market' rate, i.e about Rs. 8000 - Rs. 12,000 per sq ft.

But after one pays that much and register's it, one does it at a very low value, often called Guidance Value, i.e at about Rs. 4000 per sq ft. Only this value will the Department of Stamps and Registrations recognise at the true "market value".

If at all people were honestly registering at the rates of Rs. 8000 or Rs. 10,000 a sq ft then the Government would have paid that amount. One cannot expect the Government to be honest when one is dishonest.  

If at all the state is going to acquire your property, it would be obliged to do so only by paying the "market value" and not the "black market value". The Supreme Court of India has also clarified that right to property is only a *legal right* and not a fundamental right like right to freedom of thought and conscience for example. 

tsubba's picture

exactly.

i read that, the owner had already been paid. and the tenants were asked to vacate by yesterday. precisely cadambi. case of things coming a full circle and biting back in the a***. but it is not a question of govt being honest when others are not. as much as we choose not to believe it, there are internal checks and balances in the system. handing out random amount of compensation will raise all sorts of flags within the system. for example, next year some auditor in VS would raise a flag. property was registered at X. current guidance is 2X. why did you give 8X? plus how will the government know how much we actually for that property? :) perhaps there should be a new saying, doctor hatra, lawyer hatra government hatra suLL haeLa baardu. rofl.
silkboard's picture

The enjoyment of 'saving'

Its one of those things - we all know it, most of us do it as well. "Show" the transaction at market value X, but do the deal for 3X or whatever. 2X stays black and gets in the system via mutual funds in the name of that relative living in a remote halli, or some other 'creative' ways. But its so commonplace, that even the TV news channels dont bother stinging this thing.

Illegal transactions between buyer and seller flourish whenever its possible to keep the government in dark. Go to medical stores, and see. Want a bill, x% extra. Try a service provider (say birthday party organizer) - pay in cash, amount is X, or else, 12% extra. Fine for traffic cop - fifty fifty. Rs 50 for the cop, You keep Rs 50. Or else, pay the fine of Rs 100.

Its like we all enjoy 'saving' money that would otherwise be lost in govt coffers. What mistrust, and how rampant.

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