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In a recent report a biding to the regulations, the finance ministry in its proposed amendments to FDI (Foreign Direct Investment) policy in the realty sector has not incorporated the purchase of agricultural land by FDIs for the growth of real estate projects. Whereas, the urban development ministry in support to allow the FDI has stated that buying agricultural land by FDIs for realty development would end any uncertainty with regards to other sectors.
This proposal is expected to taken up by the Cabinet for consideration on Thursday.
The urban development ministry said that most of the lands vacant for township projects are agricultural lands. To hurry-up construction activities, many developers take money from foreign investors to alter the usage pattern of the land after purchase in which the legal status of such purchases is not very clear.
In accordance to a memorandum set by the urban development ministry, it is mentioned that as per the provisions of DIPP circular 1 of 2011 and 2013clarified by the Department of Industrial Policy and Promotion (DIPP), the companies set up with FDI can purchase immovable properties or agricultural lands for construction development projects. It further elucidated that land is to be absolutely used for the construction development projects. However, there is some uncertainty in the matter, in the memo it was pointed out that in contradiction to DIPP clarification, some government departments are still take a scrutiny that under the FDI policy purchase of agricultural land is not allowed. In order to end this ambiguity, the urban development ministry had integrated the proposal of allowing the FDIs purchase of agricultural land in the memorandum to modify the existing policy.
This proposal is expected to taken up by the Cabinet for consideration on Thursday.
The urban development ministry said that most of the lands vacant for township projects are agricultural lands. To hurry-up construction activities, many developers take money from foreign investors to alter the usage pattern of the land after purchase in which the legal status of such purchases is not very clear.
In accordance to a memorandum set by the urban development ministry, it is mentioned that as per the provisions of DIPP circular 1 of 2011 and 2013clarified by the Department of Industrial Policy and Promotion (DIPP), the companies set up with FDI can purchase immovable properties or agricultural lands for construction development projects. It further elucidated that land is to be absolutely used for the construction development projects. However, there is some uncertainty in the matter, in the memo it was pointed out that in contradiction to DIPP clarification, some government departments are still take a scrutiny that under the FDI policy purchase of agricultural land is not allowed. In order to end this ambiguity, the urban development ministry had integrated the proposal of allowing the FDIs purchase of agricultural land in the memorandum to modify the existing policy.
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