CORRUPTION IN INDIA
What makes India property market a major sink of black money in the country? The scam Adarsh Housing Society threatens to topple ministers, politicians and senior military commanders, but that is unlikely to slow real estate transactions in Mumbai, Delhi or elsewhere in the country. Some of them, according to anecdotal evidence, could include up to 60% to 70% of the payment in hard cash.
"Real estate is where most of the cash flows generated in the economy," admits a Finance Ministry official, who declined to be identified. He should know. In December, the ministry compiled the results of investigations of income tax throughout the country: the relatively modest Rs 4500 crore uncovered, about half-Rs 2,000 crore, was unearthed in the housing sector. Approximately one quarter of total production goes back to the tenth and bullion.
They do not realize often, but despite its success in modern technology and services, India is still largely a cash economy.
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