One last Indian Express link for today: Gautam Chikermane’s column on what India can learn from Hernando de Soto:
Take de Soto’s theory a little further and you’ll probably reach a conclusion that like the sub-head of his 2000 book The Mystery of Capital, capitalism may not be able to triumph in India. While the dreamer in me disagrees, my pragmatic side tells me that in some states the bridge towards that triumph is being built in the form of lower stamp duties.
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Going forward, the Delhi government plans to reduce it further — the state cabinet has approved a fall to 6 per cent for men and 4 per cent for women — which is good news for all stakeholders: households, the real estate and construction industry and the government. By lowering rates, the incentive to dupe the exchequer of legitimate taxes falls. The average black or unaccounted cash component in Delhi, at between 40 and 60 per cent, remains high, but it’s early days. Marry this fall in stamp duty rates with the way the Central government is trying to plug every possible loophole on the spending side, and the future of unaccounted wealth moves from black to bleak. Scholars have argued that state governments could double their stamp duty receipts if properties were valued correctly.
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But like a chicken-and-egg syndrome, I don’t think that’s likely to happen unless, ceteris paribus, stamp duties fall like they have in Delhi, West Bengal and Uttar Pradesh.
The emphasis in the last quoted paragraph is mine.
And this reminds me that I really should write followups to my post about allowing farmers to sell their land.
[…] Related post: this one, with a link to Gautam Chikermane in the Indian Express talking about de Soto and property …. […]