Foreigners under Scanner

EDITORIAL
Posted on 2008-11-13
THE Enforcement Directorate has served show cause notices in 6 of the 482 cases of purchase of properties by foreigners in Goa that it investigated for FEMA violation, asking why they should not be confiscated. Ever since the enactment of the Foreign Exchange Management Act in 1999, nearly 500 foreigners, mostly British and Russians, have bought property in Goa. Most floated companies jointly with locals. These projects get 100 per cent foreign direct investment (FDI) for property purchases. In some cases, buyers have used a dead person’s name as an Indian partner. No wonder, the Centre is seized of the matter. The Union finance ministry wants states to monitor property purchases by foreigners.
FEMA says a foreigner can buy land in India only if he holds a business visa and has lived in the country for 182 days at a stretch in the previous financial year. Had all ministries been vigilant, violations wouldn’t have taken place. Even bank officials admit that most of their foreign business in Goa has to do with property purchases.
There is little doubt that government’s laxity has created the present situation. First, the transactions involving the acquisition and transfer of immovable property are no more highly restricted under FEMA and these are no more linked to the citizenship of the person. Second, the FEMA made violation a civil offence rather than a criminal offence. As a result of these two changes made in the earlier FERA, foreigners have become quite emboldened and purchase land by manoeuvring the law of land. Till FEMA, the basic principle was that in foreign exchange, nothing can be done except what is specifically permitted.
What is worse: these ‘business establishments’ have been more involved in other kind of activities rather than pursuing an all-fair business. Some of the properties ‘owned’ by foreigners in the coastal belt are being used for undesirable activities. The organised nature of the foreigners involved in the land scam could be gauged from the fact that they have launched a tirade through blogs against the ED official who carried out the investigation.
On its part the state government has been quite proactive and even amended the 100-year-old Act to ban the sale of land to foreigners in the state. It even constituted a special team to investigate the cases and the team found out 482 cases of land purchases, which were forwarded to the ED. It is expected of the government that it should provide all the information required by the ED regarding sale deeds of the properties that are under investigation. At the same time it should also instruct the police to tighten its grip and ensure that anyone found involved in illegal activities are arrested and punished. The state government should assert itself and its jurisdiction.