8 years post Demonetisation: 9 in 10 citizens surveyed believe black money is still rampant in real estate; Say Aadhaar linkage to property records must be ramped up

November 8, 2024, New Delhi: On November 8, 2016, India rolled out demonetisation of its currency as a solution to reducing black money in the economy. 8 years later in 2024, cash in circulation in the economy has doubled from 17 lakh crores to 34 lakh crores. Real Estate continues to be the top sector where black money continues to find favour with many properties still falling under the benami (no name) category.

The Department of Land Resources (DoLR) though has taken up various initiatives for maintaining records of ownership of land and property. Computerization of Record of Rights (RoRs) have been completed in 6,25,137 villages out of 6,57,397 villages (95.09%) in the country as on December 31, 2023, as per MIS of Digital India Land Records Modernization Programme (DILRMP). According to a government statement, DILRMP aims to create a modern transparent land records system via an integrated land information management system. Similarly, 76% of the Digitization of maps in the country had been completed by August last year, according to official data. Besides, DoLR is assigning Bhu Aadhar or Unique Land Parcel Identification Number to all Land Parcels; and in a one year’s time, almost 9 crore land parcels have been assigned Bhu Aadhar. Earlier, registration of documents was done manually but now e-Registration is being done.

Linking Aadhaar with property registration is an attempt to ensure the authenticity of property ownership and is expected to prevent benami transactions, where the true owner of a property is not disclosed, and to reduce the use of fake documents in property deals. Additionally, linking Aadhaar with property records is seen as a step towards digitizing property records, making it easier to track and verify ownership. Thus, by establishing a centralized database and leveraging biometric verification, this measure aims to curb fraudulent practices, protect property rights, and streamline property management processes. While not mandatory in all states, the benefits of linking Aadhaar with property registration is expected to help in fostering a more trustworthy and efficient real estate environment and reduce black money. In the Union Budget for 2024-25, the government has proposed unique identification number for land or 'Bhu-Aadhaar' in rural areas and digitisation of all urban land records as part of several land-related reforms.

Finance Minister Nirmala Sitharaman in her budget speech had stated the Centre would work with states to carry out these land reforms, both in rural and urban areas. The Centre would provide fiscal support to incentivise states to complete these reforms within the next three years. "Land-related reforms and actions, both in rural and urban areas, will cover (1) land administration, planning and management, and (2) urban planning, usage and building bylaws. These will be incentivized for completion within the next 3 years through appropriate fiscal support," Sitharaman said.

On rural land-related actions, these include assignment of Unique Land Parcel Identification Number (ULPIN) or Bhu-Aadhaar for all lands; digitization of cadastral maps; survey of map sub-divisions as per current ownership; establishment of land registry; and linking to the farmers registry. These steps are also expected to facilitate credit flow and other agricultural services.

On urban land-related actions, land records are being digitized with GIS mapping. An IT based system for property record administration, updating, and tax administration is being established. This will also facilitate improving the financial position of urban local bodies. The process of GIS mapping has already started in some of the states like Delhi and Kerala. In December 2023, The Delhi High Court had asked the Union and Delhi governments to consider, as a representation, a petition to link immovable and movable property documents of citizens with their Aadhaar numbers to curb corruption, black money generation, and ‘benami’ transactions. The procedures to link land documents to Aadhaar cards are proceeding to ensure Aadhaar-based unique revenue record of property for the landholders in Kerala. The Aadhaar number of the landowner will be linked to the software ReLIS (Revenue Land Information System) of the department of revenue. Over 2 crores of revenue records (Thandeper) are estimated to be in Kerala. It also includes invalid revenue record of land which had been sold. By linking with Aadhaar, the department is expecting to bring down these figures to less than 1 crore. Some states like Karnataka are offering incentives including benefits under government schemes for those linking their property documents to their Aadhar.

Citizens via LocalCircles had originally demanded in 2020 that Aadhaar linkage to property ownership be made mandatory to reduce benaami property and use of black money in real estate. To understand how effective the Government move has been till date and whether usage of black money is still common in property buying/selling , it conducted a national survey. The survey received over 46,000 responses from citizens located in 372 districts of India. 69% respondents were men while 31% respondents were women. 41% respondents were from tier 1, 27% from tier 2 and 32% respondents were from tier 3, 4, 5 and rural districts.

62% property owners surveyed confirm having not linked their Aadhaar to their property

The survey first asked property owners, “Have you linked all your property (including agricultural or ancestral property) to your Aadhar number?” The question received 15,852 responses with 20% stating that “yes” they had linked all their property to their Aadhar number; 62% stated “no” they had not done and 18% of respondents did not give a clear answer. To sum up, around 6 in 10 respondents confirmed that they have not linked their Aadhaar to their property. Most citizens have not been requested till date to link their Aadhaar to their property and an effective process along with formal agencies must be deployed by the Government to get this linking done. Some participants outlined how at rural levels it was being done in a very rudimentary way with the Patwari reaching out to land owners and farmers using pen and paper.

67% citizens surveyed believe that all Ministers and Government employees who do not disclose their and their direct family member’s assets per Government rules must be terminated; 29% citizens in favour of their suspension from service instead of termination

Reports of benami properties often crop up in relation to probe against government employees and political leaders alleged to be involved in various scams. The survey next asked citizens, “All ministers and government employees are required to disclose their and their direct family members assets on a regular basis. What should happen to those who aren’t making these disclosures?” Out of 15,622 who responded to the question 67% stated face “termination (of service) after a final notice”; 29% stated that they should face “suspension after a final notice”; 2% stated that “no action should be taken” and 2% of respondents did not give a clear answer. To sum up, 67% citizens surveyed believe that all ministers and government employees who do not disclose their and their direct family member’s assets as per government rules must be terminated from service while 29% citizens are in favour of their suspension from service instead of termination.

90% citizens surveyed believe that black money is deployed in the real estate and construction sector and additional audits and checks are needed to ensure all products and services in the sector by builders and their subcontractors are being purchased with GST receipts

Real estate and construction sector is often cited as a major source of black money or pillar of the parallel economy. The survey asked citizens, “It is known that black money of some politicians, government employees and others is deployed in the real estate and construction sector as many inputs in this sector can be purchased in cash. Should additional audits and checks be put in place to ensure that all purchases (products and services by builders and their sub-contractors are via GST receipts?” The question received 15,385 responses with 90% stating “yes”; 5% of respondents stating “no” and remaining 5% not giving a clear response. To sum up, 9 in 10 citizens surveyed believe that black money is deployed in the real estate and construction sector and additional audits and checks are needed to ensure all products and services in the sector by builders and their subcontractors are being purchased with GST receipts.

In summary, government efforts to have a central data base of land/ properties has still a long way to go as 62% of property owners surveyed confirm having not linked their Aadhaar to their property. On the issue of corruption and black money being generated and hidden in real estate – land and property, and some government staff and ministers being behind it, the survey found that 67% citizens believe that all ministers and government employees who do not disclose their and their direct family member’s assets must as per government rules be terminated from service while 29% citizens are in favour of their suspension from service instead of termination. To crush the parallel economy, 9 in 10 citizens surveyed believe that black money is deployed in the real estate and construction sector, so additional audits and checks are needed to ensure all products and services in the sector by builders and their subcontractors are being purchased with GST receipts.

LocalCircles will share the survey results with the various authorities at the centre and the states to ensure that suitable actions and communications campaigns are conducted to ensure that Aadhar linkage with properties, both land and other assets, are correctly linked to prevent tax evasion and black money flow into real estate.

Survey Demographics

The survey received over 46,000 responses from citizens located in 372 districts of India. 69% respondents were men while 31% respondents were women. 41% respondents were from tier 1, 27% from tier 2 and 32% respondents were from tier 3, 4, 5 and rural districts. The survey was conducted via LocalCircles platform, and all participants were validated citizens who had to be registered with LocalCircles to participate in this survey.