Policy tinkering, hounding firms hit FDI in realty: Sharad Pawar to PM
Pawar noted that tax benefits to SEZ developers and units were significantly marginalised by introduction of Minimum Alternative Tax and Dividend Distribution Tax on them.
Oct 01, 2013
Source : The Economic Times

 

DELHI: Expressing concern over dip in FDI in real estate, Agriculture Minister Sharad Pawar has shot off a letter to the Prime Minister stating that tinkering of policies and agencies hounding entities receiving foreign funds is creating negative sentiments.

The realty sector has a potential to attract FDI of USD 30-40 billion, Pawar said, adding that the government's policy should be stable and investor friendly, and "genuine entities" should not be subjected to "arbitrary and coercive actions".

"Inherent growing demand of housing sector coupled with conducive tax policies of the government had earlier resulted in increased interest of foreign investors in this sector. However, frequent tinkering of the policies and removal of tax benefits midway has definitely affected the sentiments in this sector," he said in the letter to Prime Minister Manmohan Singh.

Pawar noted that tax benefits to SEZ developers and units were significantly marginalised by introduction of Minimum Alternative Tax and Dividend Distribution Tax on them.

"Midway if the tax laws are changed, it affects the entire viability of the project," he observed.

Pawar also mentioned the problems being faced by the real estate companies that have received FDI.

 

"I am also given to understand that the entities that received FDI investment were subjected to intense scrutiny by the Government Authorities/raids by tax authorities. It is said that almost 80 per cent of the developers that received FDI have been subjected to the above," Pawar said.

"While, there is no denying fact that those who violate the law of the land should be subjected to harsher punishment, we must also honour the genuine entities and avoid arbitrary and coercive actions," he added.

The Agriculture Minister and NCP Chief also said that the country could have accessed funds from overseas for townships development when the global interest rates were low.

"The township projects require significant capital and long-term debt. We could have accessed foreign debt, when the global interest rates were low. However, only a brief window was opened for external commercial borrowings (ECBs) for township," Pawar said.

Drawing PM's attention towards "dwindling FDI in real estate sector", Pawar said that "the potential FDI in this sector can be approximately USD 30 to USD 40 million provided the government policies are stable and investor friendly. I hope the matter will receive your urgent attention".

According to the government data, during April 2000 and May 2013, construction development including townships, housing and built-up infrastructure, the country has received FDI worth USD 22.16 billion or 11 per cent of the total FDI attracted by India during the period.

Latest Realty News

Chennai developers scout beachfront options
Oct 01, 2013
CHENNAI: Clearing the air over rules governing construction of buildings in coastal regulation zones (CRZ), Chennai Metropolitan Development Authority (CMDA) has started issuing approvals for residential projects on the beachfront. The road abutting Elliot’s Beach in Besant Nagar will soon house one such project, a three-storeyed residential building being promoted by a prominent city builder.
Women get upper hand in property disputes
Oct 01, 2013
DELHI: As chartered accountant Rana Shukla (name changed) and brother Raju Shukla were jointly running their late father's business, they acquired many properties together. Now, they are busy running from one law firm to another, evaluating the various options of splitting the business and properties they own jointly.
Flat owners advised caution over VAT payment to builders
Oct 01, 2013
PUNE: Citizens’ groups and consumer forums have appealed to flat owners to refrain from hurriedly paying Valued Added Tax (VAT) to builders, following the Supreme Court’s decision.
Abadi land lease starts in Greater Noida
Oct 01, 2013
DELHI: Greater Noida Authority has begun leasing back abadi land to farmers of 39 villages who had been disgruntled over acquisition for industrial development of the area. In the first phase, the Authority has handed back 82,000 sqm of abadi land to 37 farmers of Bisrakh village.
JLL closes largest-ever land deal in Kolkata
Oct 01, 2013
KOLKATA: Leading international property consultant Jones Lang LaSalle India has announced the successful closure of the largest land transaction in Kolkata to date. In this deal, Delhi-based real estate developers Alchemist Township India Limited have purchased 2 million square feet of prime residential land from Highland Group at Kolkata Riverside, a satellite township development encompassing 262 acres being developed on the banks of the Hooghly River.
New land acquisition act is pro people, but not anti-industry
Oct 01, 2013
MUMBAI: Union Minister for Rural Development Shri Jairam Ramesh today allayed the fears expressed by the Indian industry that the new Land Acquisition Act would make projects economically unviable. Addressing a Press Conference in Mumbai on Sunday, Shri Ramesh said the new act applies only to the land acquired by Central and State authorities for any public purpose, while there is no bar whatsoever, on purchase of private land. He said “industry must look beyond land acquisition by Government an
Kolte-Patil launches four projects in Pune
Oct 01, 2013
MUMBAI: While most developers have shelved their expansion plans due to the economic slowdown, Pune-based Kolte-Patil Developers has gone ahead and launched four projects totalling 1.8 million sq ft, worth over Rs 500 crore.
Gujarat tops; 35% realty projects completed
Oct 01, 2013
AHMEDABAD: Although Gujarat has seen no new investments in the realty sector in the first quarter of 2013-14, the State topped a list of 20 States in the country with 35 per cent completed projects in the sector during this quarter, apex industry body Assocham said on Monday.
Bangalore sees highest proportion of company relocations
Oct 01, 2013
BANGALORE: Relocation and consolidation of companies to suburban or cost-efficient locations is on the rise.
UP ranks highest in new investments in real estate sector
Oct 01, 2013
LUCKNOW: UP has been ranked top with maximum share of about 40 per cent in the new investments attracted by real estate sector among top 20 states across the country during the first quarter of current fiscal, industry body ASSOCHAM said today.

Latest Realty News Of State

Realty Talk's