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Q. Fight to end benami property: discuss the issues related to benami properties in India.
Nov 15, 2016 Related to : GS Paper- 3

Ans :

Introduction-

Recently Prime Minister has warned the owners of benami properties, that he will undertake similar actions against them like recent demonetisation against black money holders. Cracking down of benami properties is necessary to fight against black money.  

What is Benemi Property?

Essentially it is the property without a name. It is kind of transaction the person who pays for the property does not buys it under his/her own name. The person on whose name the property has been purchased is called the benamdar and the property so purchased is called the benami property. The person who finances the deal is the real owner.

Analysis-

  • Benami properties are registered in the name of third parties, fictitious or otherwise, by the owner who remains anonymous, making these properties obvious instruments to generate and hide wealth. 
  • The recently amended law, which is known as the Benami Transactions (Prohibition) Amendment Act is now in force, now the government needs to act to step up its campaign against black money.
  • The Prime Ministers recent statement against benami property holders will force enforcement officers to act seriously on such property holders. 
  • According to current benami property law, whenever a benami property is confiscated, all the rights and titles will vest with the central government.
  • Adjudicating authorities and an appellate tribunal will deal with benami transactions. Every suit or proceeding with respect to a benami transaction pending in any court  other than a high court or tribunal or before any forum will be transferred to the adjudicating authority or the appellate tribunal. 
  • Hence there is an need of an efficient functioning of the judicial system to lower disputes and cut needless delays in confiscation of benami properties.
  • Hence government needs to ensure effective mechanism and manpower for unearthing the benami properties.  

Suggestions-

  • The government must ensure that the crackdown does not lead to undue harassment by officers empowered under the law to unearth and confiscate benami properties.
  • Also safeguards must make sure that this expropriatory power is used with extreme care and also must also ensure guaranteed ownership to property holders.

Conclusion-

The Prime Minister’s recent statement on benami properties is welcome step in the war against black money after demonetisation.   It is most important in curbing the huge balck money converted in the form of benami transactions, but government needs to ensure that people should not face any unnecessary harassment. The action against benami properties is most important step in war against black money.


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