Thursday, August 25, 2011

Since this hill state was carved out of UP property prices have rocketed by more than 100 times. Land, which could be bought for Rs 100,000 ten years ago now sell for more than Rs 30 million. Rents for apartments have also increased but by nowhere near as much. A 3 bedroom flat will cost Rs 5 million to buy but may be rented for less than Rs 25000 a month. If the Rent Control Act came into force number properties for rent would increase by another 30% bringing rents down even further. With banks paying interest at 10%, Rs 5 million kept in fixed deposit would fetch Rs 40,000 a month. So why are rents so much lower? The reason is that half the price of the flat is paid in cash or black money so the official price is Rs 2.5 million. When the new state came into being it created a new government with a new assembly and supporting bureaucracy. Thus hundreds of new criminals were suddenly created, able to cream off the exchequer and collect millions in black money leading to the surge in property prices. This is happening all over the country and feeding the crippling inflation which the Reserve Bank cannot control. As if high on Ecstasy the Planning Commission is predicting 9% growth in the next plan. This brings us to Bihar where the government has decided to confiscate properties belonging to thieving civil servants and turn them into schools. The Patna High Court has upheld the confiscation of a multistory house of one SS Verma, an IAS officer. One shameful reason why girls drop out of schools is the lack of clean toilets. At least this house, described as palatial, will have wonderful bathrooms to tempt girls to come to school. Three cheers!

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