Unveiling the Cash Underbelly: 75-80% of Farmland Deals Still Run on Off-the-Books Cash
Despite stringent measures, the real estate sector, particularly land transactions, continues to thrive on opaque and cash-fueled deals. A viral post highlights how 75-80% of farmland deals in India are still conducted under the table, raising concerns about transparency and regulation.
FarmlandReal EstateCash TransactionsTransparencyRegulationReal EstateApr 04, 2025
The real estate sector, particularly the land market, has long been a hotbed of opaque and often illegal activities. From benami ownership to the use of black money, the industry has struggled to shed its reputation for opacity and corruption. Despite the introduction of the Real Estate (Regulation and Development) Act (RERA) in 2016 and other regulatory measures, the misuse of cash in transactions remains a persistent issue.
One of the primary reasons for the continued use of cash in farmland deals is the desire to avoid high transaction costs and taxes. Land transactions in India are subject to a range of levies, including stamp duty, registration fees, and capital gains tax. These costs can be substantial, especially for large tracts of land, making cash transactions an appealing option for both buyers and sellers. The anonymity and ease of handling cash also make it an attractive alternative for those who wish to keep their transactions off the radar.
However, the prevalence of cash transactions in the farmland market has several negative implications. It not only leads to a loss of revenue for the government but also hampers the development of a transparent and efficient real estate market. The lack of proper documentation and record-keeping makes it difficult for authorities to track ownership and enforce regulations. This, in turn, can lead to disputes and legal complications for unsuspecting buyers and sellers.
Moreover, the cash-based nature of these transactions often masks deeper issues such as land grabbing and the displacement of small and marginal farmers. The informal market for farmland can become a breeding ground for speculation and manipulation, driving up prices and making it difficult for genuine farmers to access land. This has broader socio-economic implications, particularly in rural areas where land is a critical asset for livelihoods.
To address these issues, experts suggest a multi-pronged approach. One key step is to simplify the regulatory framework and reduce transaction costs to make it more attractive for people to conduct deals through official channels. This could include lowering stamp duties, streamlining the registration process, and providing incentives for transparent transactions.
Additionally, enhancing awareness and education about the benefits of documented transactions can play a crucial role in changing mindsets. Efforts to popularize digital payment systems and encourage the use of banks and other financial institutions for land transactions can also help reduce the reliance on cash.
The government's push for digitization, particularly in rural areas, is a positive step in this direction. Initiatives like the Digital India program and the Pradhan Mantri Jan-Dhan Yojana (PMJDY) have helped increase financial inclusion and the adoption of digital payment methods. However, more needs to be done to ensure that these benefits trickle down to the farmland market.
In conclusion, while the viral post has highlighted the ongoing challenge of cash-based farmland transactions, it is clear that addressing this issue requires a concerted effort from all stakeholders. By simplifying regulations, reducing costs, and promoting transparency, it is possible to bring much-needed change to this critical sector. The journey towards a more transparent and efficient real estate market may be long, but the benefits for all parties involved make it a worthwhile endeavor.
Frequently Asked Questions
What percentage of farmland deals in India are conducted in cash?
According to a recent viral post, 75-80% of farmland deals in India are still conducted in cash.
Why are cash transactions preferred in farmland deals?
Cash transactions are preferred to avoid high transaction costs and taxes, as well as to maintain anonymity and ease of handling.
What are the negative implications of cash-based farmland deals?
Cash-based deals lead to a loss of government revenue, hinder the development of a transparent market, and can result in land grabbing and displacement of small farmers.
What measures can help reduce the reliance on cash in farmland transactions?
Simplifying regulations, reducing transaction costs, enhancing awareness, promoting digital payments, and increasing financial inclusion are some measures that can help.
What is the role of government initiatives in addressing this issue?
Government programs like the Digital India initiative and the Pradhan Mantri Jan-Dhan Yojana (PMJDY) are helping to promote digital payments and financial inclusion, which can reduce the reliance on cash.
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