The root of reforms is in land.

The new York Times has unearthed that the owner of a luxury condominium in the Time Warner Center in Manhattan as one Kabul Chawla, who also owns BPTP, a company which builds multi-storied apartments in India. He paid $19.4 million to buy the apartment in February 2012 through a shell company called NYC Real Estate Opportunities, a Delaware company with a Singapore address. The apartment, no 68AF, has 5 bedrooms, 5 1/2 marble bathrooms, a 23-by-24-foot great room, his-and-her master closets, a media playroom, soaring ceilings, river-to-river views of the city and Central Park views. Chawla lives in the apartment but his name does not appear in any of the documents. The apartment is registered to his cousin, Aneil Anand. But why is this Chawla of interest to us? Because in 2005 he started buying farmland in Faridabad and by 2012 he had 2 dozen projects over 2,500 acres with 22,000 customers and sales of $1.6 billion. In 2012 he collected around $35 million from 400 buyers to build Park Serene Apartments, 200 of whom were army officers, who used all their savings to buy flats in the building, but the project was not completed because Chawla used the money to buy land for other projects, which is a common practice in India. This kind of flimflam is possible because real estate is the main source of wealth for most Indians, accounting for 92% of wealth in urban areas, writes Prof Vidya Mahambare from Chennai. Wealth in financial assets is a mere 4.5% but " While calculating wealth, shares and debentures held by households were valued at market prices in the NSSO survey, but land and buildings were valued at guideline prices. Had the latter also been recorded on the basis of its market value, the share of land and buildings in urban household wealth would be even greater." The wealthy have multiple real estate, the middle class usually have one, in which they live, and the poor have none. Thus real estate is the main reason for income inequality in India. The construction industry does produce a lot of jobs but they are usually for daily labor, insecure and poorly paid. Most of the black money in India is invested in real estate and the income from rent is non-productive income for the the rich while the poor stay poor because rent is a waste, which does not build future assets. Hence, " Revolutionizing the housing market to reflect the fundamental prices...will do more for lowering wealth inequality than aiming directly for a goal of housing for all." If property prices fell black money would disappear, the middle class will not be affected because they only own the property they live in so the loss will be notional, while it will benefit the poor who will be able to enter the housing market or pay less rent. Trouble is that the people who have to initiate reforms are the ones with black money.