Across the globe real estate has emerged as a key money spinner for those in the business. In countries like India, real estate business created a new class of highly rich people with lot of money but mostly unaccounted. All that a real estate dealer in India requires is communication skills, with a circle of political contacts and Government officials.
The boom has made the common man’s dream of owning a plot of land or a house a real dream. The boom needs to be regulated so that speculative element is replaced with genuine demand by the end users of land is restored. Otherwise there will be land movements that may endanger the very existence of the system. Regulation is good in land deals since it stops the speculative element that is the key driver for the land boom. Regulation in land deals will remove the gray area money from circulation. It is often called as premium over the land rates fixed by government for registration purpose and this premium is often unaccounted money and that is a worry.
Regulation in land dealings must keep the following factors in mind.
1. Land/plots must be available for end users only
2. Each state government must create a land bank and transfer all the vacant government lands to that Land Bank.
3. Middle men in land deals must be banned.
4. If the owner of land / plot of land wish to sell the land for a genuine purpose, he must surrender the land to the Land Bank. Such authority must pay for the acquired land compensation within 30 days.
5. If an individual/company needs land/plot of land for agricultural activity or house construction, he must approach the Land Bank. He must buy land/plots from such authority only.
6. The buyers of land/plots must have no option to resell their lands unless 5 years pass after they buy. In such cases too, they must approach the Land Bank and sell the land/plot to them only.
7. The Land bank must make available loans against land/plots to the owners for genuine purposes.
8. The rates for the lands/plots must be fixed keeping inflation into mind.
9. Buying land/plot for profit purpose only must be banned.
If this Land Bank Scheme is implemented the following benefits will accrue.
1. The gray money being pumped into the system by the land dealers will come to an end.
2. Genuine buyers needing a plot of land for construction will find the price affordable and reasonable.
3. Genuine buyers of agricultural land will put the land to productive use, creating employment.
4. Genuine buyers of Industrial land will generate employment opportunities in the locality.
5. Since loan facility will be available for the owners in genuine cases, they can take loans against land/plot of land and repay them.
6. It will put a stop to speculative element in land dealings and help the common man.
Such new thinking is needed, to remove the speculative element that is driving the real estate boom. Other wise, the common man can face such a situation where buying a plot of land or owning a house becomes a dream difficult to realize. Before the common man’s protests grow louder, action is needed.