Realty companies with foreign investment may buy farm land in India
Feb 22, 2014
Source : The Economic Times

 

DELHI: The urban development ministry is pushing for retrospective application of a significant change proposed in the foreign direct investment (FDI) policy for construction sector, which will allow foreign investors to purchase farm land in India.

The Department of Industrial Policy and Promotion (DIPP) has proposed to relax the FDI rules for construction and housing.

It has recommended a company owned and controlled by an Indian and having foreign investment could directly buy agricultural land from farmers. However, a company controlled by a non-resident will be able to buy such land only after it is converted to non-agricultural land.

The urban development ministry wants this provision to be available retrospectively. The DIPP is in the process of floating a note for the consideration of the cabinet.

DIPP, the nodal body for FDI policy, feels changes under the Foreign Exchanges Management Act (FEMA) can only be done on a prospective basis.

DIPP says it is up to the finance ministry to decide whether to consider the urban development ministry's suggestion.

"FDI in land as such is not a part of FDI policy; it is purely a FEMA issue. If it has to be done retrospectively, then the provision has to be built into the law. It will be a call of the finance ministry," said a senior DIPP official.

A retrospective application will benefit real estate major Emaar MGF, which was issued a Rs 8,600-crore showcause notice last year by the Enforcement Directorate (ED) for alleged diversion of FDI funds to buy agricultural land in violation of FEMA.

Emaar MGF is a joint venture between Emaar Properties of the UAE and MGF Developments Limited of India.

As per the ED investigations, almost 70% of Emaar MGF's land bank was agricultural land, which is about 8,500 acre, which is said to be allegedly bought by FDI money.

The retrospective change will essentially regularise purchase of agriculture land using foreign investment.

The urban development ministry wants the policy to read as, "company incorporated in India, can 'continue to' enter into memorandum of understanding to sell as well as advance money to purchase agriculture land".

As per the proposal for FDI in housing, the minimum floor area for construction development will be cut to 20,000 sq mt from 50,000 sq mt in cities having a population of more than 100,000 as per the 2011 census.

Under current rules, 100% FDI is allowed through the automatic route in development of townships, housing and built-up infrastructure, subject to stringent conditions.

Between April 2000 and October 2013, construction development, including townships, housing and built-up infrastructure in the country, received FDI worth $22.77 billion, or 11% of the total FDI attracted by India during the period.

Latest Realty News

'Probe Regn Dept's Role in DMK leader Wife's Land Case'
Feb 20, 2014
PUDUCHERRY: The AIADMK wanted officials of the registration department be probed for their alleged role in illegal selling/buying and transfer of lands attached to the government from the defaulters of tax arrears.
Rs 50,000 cr Tax-free Bonds to Boost Infra Investments
Feb 20, 2014
DELHI: India will need $1 trillion by 2020 for the infrastructure sector while projects worth over thousands of crore are yet to get off the ground for want of different clearances.
GHMC proposes Rs 4,599 cr budget
Feb 20, 2014
HYDERABAD: To woo youth just ahead of the elections, Hyderabad mayor Mohammed Majid Hussain has allotted more funds for them. Though the commissioner proposed Rs 3,850 crore as budget estimate, the standing committee has enhanced it to Rs 4,599 crore.
Rs 55.22 lakh fines on builders
Feb 20, 2014
AHMEDABAD: The estate department of AMC has issued notices in 34 cases and slapped fine to the tune of Rs 55,20,000 to builders and developers for violating various norms in their projects.
Rs 403-crore property tax still due
Feb 20, 2014
PUNE: Civic body-appointed brass bands will need to play louder next fiscal. The Pune Municipal Corporation has not been able to recover Rs 403 crore pending property tax despite its many efforts. At the general body meeting, the administration in a written reply to the elected members stated that property tax worth Rs 403 crore has to be recovered from the defaulters in 2014-15.
Beware of land scammers: Bokaro DC
Feb 20, 2014
BOKARO: Taking a note of a steep rise in incidents of land scams that dupe many people, Bokaro deputy commissioner Uma Shanker Singh on Wednesday urged the residents to verify land-related documents from the government office concerned before buying flats or houses from builders and real estate agents.
Real estate market looks up in Greater Gurgaon
Feb 20, 2014
DELHI: Located 24km from Gurgaon city, Greater Gurgaon, the newly-notified area in the new Master Plan, is the new marketing name for Sohna Road. Currently, Greater Gurgaon is registering a boom in the real estate market with supply keeping pace with demand; experts even say the area is all set to emerge as the next axis for residential, commercial, institutional, and industrial development in Gurgaon.
Hyderabad realty heaves a sigh of relief
Feb 20, 2014
HYDERABAD: The ‘sick’ realty sector in Hyderabad heaved a huge sigh of relief on February 18, with the Parliament finally giving its nod to the T bill. Developers and realtors alike, rejoiced the end of political uncertainty in the city, which they stressed was at the root of the crisis prevailing in the property market over the last few years.
Bandra-Kurla Complex second-most pricey office space
Feb 20, 2014
MUMBAI: The commercial business district of the Bandra-Kurla Complex (BKC) has emerged as the second most expensive office location in India and eighth in the Asia Pacific region.
Bangalore: The tall storey
Feb 20, 2014
BANGALORE: Bangalore is known for its bungalow culture. It’s not surprising then that the country’s IT capital doesn’t have a great skyline. That maybe about to change. In a daring move real estate developers are reaching for the stars in a bid to give Bangaloreans a skyline to shout about.

Latest Realty News Of State

Realty Talk's