And so they come tumbling down.

Couple of days ago we pointed out how residents of the Campa Cola compound in Mumbai have been evicted from illegally constructed floors but no official or builder was sent to prison. On the same day 10 people were killed when a building collapsed in Tulsi Nagar in Delhi. Apparently an adjacent building had been demolished and an illegal basement was being constructed in a plot measuring just 18 sq yards which would be 6 yards or 18 feet by 3 yards or 9 feet. Cost of land is so high in India that even a handkerchief sized plot is not left vacant for long. Over the last 5 years there have been at least 11 major building collapses in which people have died. After such an incident various departments blame each other, a few junior officials are suspended and the owner of the building is charged with manslaughter. Cases drag on and after sometime the officials are quietly reinstated with full back pay and cases are dropped by the police. One major problem that politicians do not want to touch is the draconian Rent Control Law under which it is impossible to evict tenants. Many of the old houses are completely occupied by tenants for over 50 years who pay the same rent as 50 years ago. Landlords see no reason to waste money on repairing buildings and allow them to decay in the hope that when the building collapses the tenants will be forced to move. The Act was modified in 1995 and even signed by the President but the government surrendered to pressure from a few traders and the new Act was not notified. In the 30 years since 1984 gold has given an average annual return of 3.5%, shares have returned an average of 8.3% per year while properties have given a phenomenal return of 16.59% per year. Thus Rs 300,000 invested in gold in 1984 would have become around Rs 1.2 million this year, the same invested in shares would have become around Rs 5 million this year but if Rs 300,000 was invested in a property in Delhi it would have become Rs 30 million. Builders have to pay huge bribes to get their plans passed by officials so they build extra floors, use substandard materials and ignore safety regulations. Owners of buildings have added extra floors without proper foundations to earn rent. Similar conditions prevail in every city in India. Yesterday a building under construction in Chennai collapsed in the rain, killing 14 people. Which is strange because cement becomes harder in water. Property dealers increase prices to increase their commissions. Which feeds the greed of all. Either property prices will fall or the rupee will have to fall to adjust for the bubble. Hope Mr Modi is watching.