Hi Friend,
Whether land reforms will be put in to practice?
Two of the biggest sources of parking
capital are (Third one obviously is Business/Equity).
- Banks
- Land
Had anyone of us predicted about
8 years ago that PAN card will be mandatory for crediting cash of Rs.50,000/-
or more in Bank accounts?
And that Tax department will have complete control on the banking data through core banking solutions?
That is the impact of computerization and that certainly is happening in land records as well.
So, it is not a matter of “Whether” but a matter of “When”?
That is exactly the reason that I mentioned “over the next 10-15 years” in my earlier article.
And that Tax department will have complete control on the banking data through core banking solutions?
That is the impact of computerization and that certainly is happening in land records as well.
So, it is not a matter of “Whether” but a matter of “When”?
That is exactly the reason that I mentioned “over the next 10-15 years” in my earlier article.
Quantum of money in Land deals in India
To understand the impact of
anything we better have data. Take the example of Andhra Pradesh(A.P.) where
Budgetary estimate of revenues due to registrations are approximately
Rs.7,000/- crore for 2013-14.
Please check the following link to know more.
Please check the following link to know more.
An income of Rs.7,000/- Crore is possible
only if the transactions “as per government’s market value / registration value”
are over Rs,1,00,000/- Crore.
We all know that actual market value of land is
much higher than the registration value and would be 4 to 5 times of the same
or even more.
Meaning, the quantum of deals could be Rs.5,00,000/- Crore or even more.
But, we have not considered the deals that happen through “agreements” to avoid registration charges.
If we consider all these transactions, actual real estate deals in A.P. could be in upwards of Rs.8,00,000/- Crore per annum.
Meaning, the quantum of deals could be Rs.5,00,000/- Crore or even more.
But, we have not considered the deals that happen through “agreements” to avoid registration charges.
If we consider all these transactions, actual real estate deals in A.P. could be in upwards of Rs.8,00,000/- Crore per annum.
There should not be an iota of
doubt that there are much bigger real estate markets than A.P.(Like Delhi, Maharashtra , Tamil Nadu, Karnataka).
Considering the above, land transactions acrossIndia
would easily cross Rs.50,00,000/- Crore per annum.
Considering the above, land transactions across
Quantum of money that could flow into Business / Equity:
Even if 10% of this money from
land deals gets diverted into business / Equity (due to land reforms) that could
be a diversion of Rs.5,00,000/- Crore per annum.
What Rs.5,00,000/- Crore investment in Equity / Business could do:
Rs.83,424/- Crore pumped in by FIIs (Foreign
Institutional Investors) made the SENSEX jump from the rock bottom of 8000 to 18,000
in the calendar year 2009.
Please check calendar year data from the following link,
Please check calendar year data from the following link,
Imagine what Rs.5,00,000/- Crore per annum could do then?
We should see the big picture clearly. Then only we will be able to ignore daily market fluctuations and will have the courage to invest a substantial capital over the next 10 years to benefit from such huge capital flowing in.
Happy Investing.
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