Poll code stalls cash movement, hit realty sector hard

Hyderabad : The huge amount of cash being seized by the police in the last three weeks as part of their drive against flow of unaccounted cash in the elections has cast its shadow on real estate sector in the State.

Reason: A large per cent of real estate transactions take place in the form of cash, ostensibly to avoid payment of stamp duty and registration fee. And the police have intensified checks and confiscating cash more than Rs 50,000 which has not been accounted for. And a major part of the money recently seized by the police during intense checking of vehicles was believed to be meant for real estate transactions.

With the State getting into an election mode and model code of conduct being in force, there is a steady decline in the property registrations. As a result, the revenues from the registration department have taken a beating.

The number of transactions all over the State has come down considerably as buyers and sellers appear to have pressed the pause button and put on hold the payment process.

Only those agreements where money payments have been completed were being registered.The problems cropped up with the police launching a major drive and seizing huge amounts being carried in vehicles without proper documents. So far, the police have seized about Rs 54 crore all over the State.

Usually, the money payments in the property trading take place in two ways. The money shown in official records is paid in "white" and the remaining amount is paid in "black."

The unaccounted or black money is paid in cash and generally such huge cash are transferred in vehicles.The real estate customers have been carrying the cash in the vehicles without proper documents and some of them were caught. However, in most cases, the money will be returned later if relevant documents are submitted.

Large-scale seizure of unaccounted cash by the police during elections bring down real estate transactions as they involve cash payments to a large extent

According to Deputy Inspector General of Police (Hyderabad revenue district) Srinivasulu, the department might not reach the target of Rs 65 crore for the month of March, due to the dip in the transactions in sub-registrar offices in the Hyderabad revenue district.

He said that the shortfall in the revenue might be up to 30 per cent. A property dealer Bhaskar Rao of Vanasthalipuram area said the transactions had come down drastically and their business was rather dull during this month.

He said that it would be better for the customers to carry sale deed or cash payment receipts with them while carrying cash, to prove to the police that the said money was not meant for election purposes.

SRMT Ventures managing director Ch Bala Koteswara Rao said that the impact of the code of conduct was also felt in Vijayawada. He said that real estate customers are wary of carrying huge amounts due to police vigilance.