Five years after the central government demonetised all 500 and 1,000 currency notes citing curbing black money and reducing cash circulation in the economy as the reasons, cash in the form of black money continues to be prevalent in real estate transactions.

In a survey conducted by community platform LocalCircles, 70% respondents said they have paid a component of the total payment towards a real estate transaction in cash in the last seven years. About 16% of respondents said they paid over half of the amount in cash.

“For the corrupt, real estate has been a way out to convert their black money to white buying several properties in otherʼs names. Though several efforts have been made by authorities to curb the menace, such practice still looms large,” the survey stated.

The survey received a total of 8,920 responses.

According to the data provided by the Reserve Bank of India, cash circulation as of 8 October, 2021 stood at a record high of 28.30 lakh crore, up 57.48% or 10.33 lakh crore from 17.97 lakh crore on November 4, 2016, the survey noted. 

“Cash with the public has shot up 211% from 9.11 lakh crore, recorded on November 25, 2016. It rose by 8.5%, or INR 2.21 lakh crore, on a year-on-year basis. The jump was primarily driven by a rush for cash by the public in 2020 as the government announced a stringent lockdown to tackle the spread of the Covid-19 pandemic,” the survey report said.

On the LocalCircles platform, many people have reported that even for many MSMEs, property registration takes place at a fraction of the total value paid thereby evading taxes.

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