eCommerce
The Future of Real Estate in India: Using eCommerce to Fight Black Money
For years, the real estate market in India has been known for dealing with black money—unreported cash transactions that happen under the radar. Despite efforts from the government, such as demonetization, RERA (Real Estate Regulatory Authority), and GST (Goods and Services Tax), black money still plays a major role in high-value property deals. Studies show that up to 50% of large real estate transactions involve cash payments that are not declared.
At Chitrangana, we have been working on new ideas to solve this problem. Our research, led by Nitin Lodha, proposes using digital bidding systems to bring more transparency and fairness to property transactions.
What Is Black Money in Real Estate?
In many real estate deals, buyers and sellers agree to an official price, but behind the scenes, they exchange extra cash that is not reported. This hidden cash—called black money—helps people avoid paying taxes and lowers the official sale price of the property. Even with regulations like RERA and GST, it is still happening, especially in high-value property sales.
How Can Digital Bidding Systems Help?
A digital bidding system is a platform where all properties, both residential and commercial, are listed and sold through an online auction. This would require every property sale to be open for everyone to see, with prices driven by real-time, competitive bidding. With this system, there would be no room for hidden cash deals or under-the-table agreements.
At Chitrangana, we have seen how similar systems have worked in countries like Ireland and South Africa, where they reduced property transaction times by up to 50% and brought much-needed transparency to the process.
The Benefits of Digital Bidding
- Transparency: Every sale is done openly through the digital platform, leaving no room for black money to change hands.
- Fair Market Value: Buyers compete in an open bidding process, meaning the property is sold for its real value, not a deflated, tax-evading price.
- Compliance: The system will be integrated with RERA and TNCP to ensure that all transactions meet legal and tax requirements automatically.
Challenges Ahead
While the idea of digital bidding systems is exciting, we know that there are challenges. In rural and semi-urban areas, where digital infrastructure may not be as strong, it could take time to implement such a system. However, with support from the government and public education campaigns, these hurdles can be overcome.
The Path Forward
At Chitrangana, we believe that this digital transformation is crucial for solving India’s black money problem in real estate. If implemented, digital bidding systems can ensure that real estate transactions are transparent, accountable, and free of black money. By moving the property market towards a digital future, we can help make the sector more honest and fair for everyone.
