Govt working on plan to turn seized benami properties into houses, offices
The government is working on a plan to turn seized benami property into offices or let them out for residential purpose, a move officials said was part of Prime Minister Narendra Modi’s crackdown on black money and corruption.
Union housing and urban poverty alleviation secretary Nandita Chatterjee met revenue secretary Hasmukh Adhia last month to discuss ways to monetise seized properties, especially for public purpose. The discussions centred around how such properties could be used for providing rental housing and hostels for working men and women, officials told HT.
Since Parliament’s approval of the Benami Transactions (Prohibition) Amendment Bill last year, the Modi-led NDA government has launched an all-out war on properties acquired in the name of someone else. Such deals are believed to form a large chunk of the country’s black money.
In one of his weekly radio address, Mann Ki Baat, last year, Modi said the governnment will soon implement the benami transaction law to target other forms of illegally accumulated wealth.
“A roadmap will be drawn depending on the need and location of the (seized) place. Monetisation of these assets cannot have a one-size-fits-all formula,” a senior finance ministry official said.
“A house in the middle of the mall or an office area will have to be put to use in a different manner from another one which is located in a residential area or agriculture land. Some properties could also be put to auction.”
Monetising benami properties for providing affordable housing was also one of the recommendations made by a group of secretaries on health, sanitation and urban development.
Using seized illegal properties for public purpose is not a new idea.
In 2011, the Bihar government led by chief minister Nitish Kumar, confiscated a palatial bungalow of a senior IAS officer in Patna and converted it into a primary school. It also opened a residential school in a house seized from a clerk at Patna. Both the schools are for students from backward communities. Since then, a couple of more such properties have been seized and are being used for public purpose.
However, experts said auctioning or monetising a benami property could be a long-drawn process.
“This (monetisation) is likely to lead to multiple litigations...litigations will be dynamic depending on property to property. Besides, valuation of the same will also be a crucial part of the process,” said Manoj Kumar, a legal expert and managing partner of Hammurabi and Solomon, a top legal firm.
The government last year pulled out Rs 500 and Rs 1000 banknotes in what Modi described as a surgical strike on illicit cash and counterfeiting. Since then, the government has been aggressively pushing for electronic transactions.
Benami properties are largely cash-only deals to escape the tax net.