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Buying and selling of immoveable properties in India by NRIs

Recently, the real estate sector in India is becoming an attractive investment ground for the diasporas who have evinced a keen interest in owning residential and commercial properties in India.

Ganesh is a non resident Indian residing in London, UK. He wants to buy property in India and seeks advice on the regulatory framework for investing in real estate in India.

Non Resident Indians and foreign citizens who are Persons of Indian Origin (PIO) are allowed to purchase immoveable property in India. PIO means an individual who at any time held an Indian passport or who or whose parents or grand-parents were citizens of India at any point in time.

However citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan are not eligible to be called PIOs even if they satisfy the above conditions.

Tall is beautiful for realty players in Mumbai

The latest to join the growing list of skyscraper builders in Mumbai is a local land owner, R M Batthad, which has tied up with IL&FS. It has firm plans to construct seven to eight towers, each with 90 floors, over a 19-acre plot in Sewri that was part of the erstwhile mill district in central Mumbai.

IL&FS, which also manages a real estate fund, has already invested Rs 100 crore in the project and will scale up its investment in the coming days, a person involved with the project said. A senior IL&FS executive confirmed the development. Though the exact cost of the project is not known, it is likely to generate Rs 15,000 crore in revenues, the person added. Real estate brokers said the project is set to be launched within two-three weeks.


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Just yesterday, the Lodha group, which made news last week by winning the bid to buy a six-acre plot in the country’s largest-ever land deal, announced its intent to build the world’s tallest residential tower. The 115-storied apartment block on a 17.5-acre plot of the defunct Shrinivas Mill is planned in Lower Parel, a few kilometres away from Sewri.

Lodha is also planning to start work on a tall residential project in a six-acre plot in Wadala, for which it submitted a winning bid of over Rs 4,000 crore. The developer will hold a preview for the 115-storied Lower Parel apartment block on June 8.

A few metres down the road, DLF is ready to launch what is being billed as ‘Mumbai’s largest luxury residential project’. The project will have 1,000 apartments in three buildings, with 80-90 floors each. Each apartment in the complex will cost Rs 5-10 crore, real estate brokers said.

In central Mumbai, DB Realty is also developing an 80-storied residential complex, Orchid Heights. The developer is planning another project in Charni Road, south Mumbai, which will have around the same number of floors.

Towers in the air?
While there is a race to announce the launch of the city’s tallest structure, market players warn that many of the projects might not materialise. “It is more to do with creation of hype when sales are down and prices are stagnant,” says Pankaj Kapoor, chief executive of realty research firm Liases Foras.

The Mumbai Metropolitan Region Development Authority (MMRDA), which had announced plans to build a 101-storied building in Wadala, shelved it due to a poor response from developers. Instead of the proposed commercial complex, MMRDA then bid out the land, for which Lodha emerged the top bidder.

The Imperial, the 60-storied twin towers developed by Shapoorji Pallonji and Dilip Thacker at Tardeo, is at present touted as the country’s tallest residential building. Even this project took nearly a decade for completion, due to litigation and a lengthy approval process.

A necessity, not race
“In a city like Mumbai where land is scarce, the only way to build a project is to go up,” says Anand Narayanan, national director, residential agency at Knight Frank, a property consultancy.

Though the floor space index (FSI), the permissible construction on a plot of land, is capped at 1.33 in Mumbai as compared to 6-9 in Hong Kong and Singapore, an FSI of up to four is permitted in redevelopment projects. So, developers are attracted to build up to four square feet on every square foot of land on which a textile mill, an old building or a slum once existed.

“It is more of a necessity than a competition. You can also develop better infrastructure around it,” says Suleman Budhwani, vice-president (business development) at Shapoorji Pallonji, which developed The Imperial towers.

However, analysts see the so-called race as just a fad. Kapoor says, by going taller, developers plan to sell more area to home buyers, which they generate by building balconies and terraces that are free from FSI restrictions.

“Though it is good for a city like Mumbai, there is a big gap between claims and implementation,” he says.

However, the slowdown in Dubai property has come as a blessing for Indian developers, who are planning to build large developments. According to Narayanan of Knight Frank, all of Dubai’s technical and construction teams are available to work in India at nominal costs.

“Four years ago, they were not even willing to look at India,” he says. For the moment, the developers are trying to reach for the sky.

Zuari to re-enter cement business

Zuari Industries is re-entering cement business after exiting it four years ago as part of plans to spend over $1.5 billion for expanding
fertiliser, real estate and cement businesses, chairman of the diversified firm said. The company had sold its equity stake in the cement business to joint venture partner Italcementi in 2006.

Saroj Poddar, chairman of Zuari Industries said the Italian cement giant has the right of first refusal to undertake either jointly or wholly the proposed cement unit that is at present housed under Gulbarga Cement. But the rights expire in October and Italcementi has not shown any interest in the project as yet.

“Although the next two years will see lot of capacity coming up in the sector, over a longer period, cement remains a lucrative business to be in, given the economic growth prospects of the country,” said Mr Poddar who became the chairman of key group firms after the demise of his father-in-law and industrialist KK Birla in August 2008.

The initial plan is to set up a three million tonne cement plant at Gulbarga in Karnataka. The project would absorb an investment of Rs 1,500 crore and is expected to commence from mid-2011. It will be funded through a mix of internal accruals, borrowings and a possible equity issue.

“We will not restrict ourselves to this greenfield unit and will consider all means to expand even if it comes down to making acquisitions,” said Mr Poddar.

Besides re-entering cement, Zuari also has plans to invest around Rs 5,790 crore for expanding the core fertiliser business. A large part of this will be used for a Rs 5,000 crore greenfield ammonia urea complex of 1.1 million tonnes. Zuari may consider raising fresh funds through a public issue for this project, said Mr Poddar.

“We are also scouting for acquiring mines abroad to secure raw material for fertiliser business,” he said. The group could also look to set up a new fertiliser plant internationally if it gains access to mining operations. Meanwhile, Zuari is also foraying into the real estate business with its first township development project worth Rs 500 crore in Mysore. This would be a stepping stone to expand presence in the realty space, said Mr Poddar.

In its other smaller businesses, the group is in talks to strike a joint venture deal with a global furniture maker to expand the product portfolio of Indian Furniture Products, a subsidiary of Zuari Industries.

India most attractive market: Emaar chief

Mohamed Bin Ali Alabbar, chairman of Dubai-based real estate major Emaar, finds India as one of the most attractive markets and would continue to invest in the country through its joint venture company Emaar MGF.

Emaar, which is a listed company with 68% public holding and the rest with the Dubai government, has invested around $1 billion in India so far. Alabbar said that the continued growth even during the period when the global economy was facing one of the worst financial turmoils proves the strength of the Indian economy.

Besides United Arab Emirates, Emaar is operating in 16 countries including US, UK, France In Canada. Its JV company Emaar MGF is presently planning to tap the capital market in India. Alabbar said that the exercise is mainly aimed at listing the company on Indian stock exchanges, which will bring in more transparency in the company's operations and thereby help in instilling confidence among the various stakeholders including customers in the company.

Talking about the financial crisis, he hoped that it is now over and things will improve. The recently reported financial crisis of Dubai World is manageable and will be contained, he said. "All sectors of the country are performing well," he said.

Talking about India, he said he was pleasantly surprised as the country has returned to high growth radar. He said that Emaar MGF is doing exceptionally well. In fact, he is so confident that he refused to change the company's strategy to delve into the affordable housing segment as most of other real estate companies in the country followed to beat the slowdown in the sector.

"In order to protect its brand, Emaar MGF will continue to build houses for middle and upper-middle segments," he said. He said that his group brings in certain quality and specification with its brand, which is not possible in the pure affordable segment. However, he added that it will provide value for money to its customers.

Even during the slowdown period, he said that his company ensured that no project is delayed. In India, he said that all the projects are on schedule. Despite problems and slowdown, the company is ready to deliver all the 1168 apartments of the Commonwealth Games village. He said all the works have been completed and the delivery is being given to the authority.

Senior citizens' homes emerging as a serious segment of real estate

PUNE: Indian real estate scene is witnessing the emergence of senior citizens' homes as a new market segment as the number of projects and housing stock directed at this section of population is rising fast, a report by real estate advisory firm Jones Lang LaSalle Meghraj (JLLM) has said.

The observation is highlighted in a report Senior housing sector in India: Key Trends,' which JLLM released on Friday. "The status of seniors in Indian market is experiencing a sea-change, owing to their growing cohort size, augmented financial independence and change in mindset. They are no longer considered withdrawn, risk averse and financially dependent. The immense potential of this segment, with its unique needs and promises, offers an array of opportunities to the Indian real estate market," the report said.

Saumyajit Roy, associate vice-president (senior living) at Jones Lang LaSalle Meghraj, told TOI, "Five years ago, there were only about 3 to 4 developers focusing on senior living sector to any degree. Moreover, their focus was diffused and their approach was not as well-researched and need-based, as it is today. In the current context, there are around 14 developers actively exploring this segment."

In India, more than 60 per cent of households are nuclear and 8.94 per cent of the population is aged 60-plus, indicating that the aged are in greater need of support than ever.

According to real estate market sources, the number of housing units being built specifically for seniors has increased four to five fold and the segment is on a growth path. "We estimate the number of units in this segment at about 4,000 now, but the way the segment is growing we expect this number to jump to over 20,000 in three years," said the chief executive officer of a Mumbai-based real estate consultancy firm who did not want to be named.

The report pointed out that while opportunities exist, it is important to comprehend the ecosystem in which seniors exist in India. It is imperative that real estate developers understand and acknowledge the unique requirements of the elderly while catering to the sector. The aged population faces numerous issues, typical of the sunset years of their lives.

"A growing sense of insecurity, craving for companionship, fear of getting obsolete and loss of relevance within the family, increasing physical disability, difficulty to access transport, a need for quality healthcare and geriatric care, complexity in conducting the daily chores of family life are some of the several issues that the aged face today. These, compounded by poor access to government and other support systems, insurance and legal assistance, immobilise them. These nuances of old age need to be thoroughly recognised by the developers," the report has elaborated.

The report underlines that there are rising numbers of seniors who are adapting to the idea of senior living' spending the sunset years of their lives with similar-aged companions and sharing facilities in settings of enablement and security. The report also points out to a recent survey of households with senior citizens which revealed that over 60 per cent found the concept of a senior citizen's club or a senior citizen's association as a viable and practical one. Contemporary retirement homes or resorts have replaced the earlier concept of old age homes, which symbolised the last option for needy and abandoned elderly, it said.

City-based Paranjape Schemes Construction Limited has pioneered the concept in the city with their project Atha Shree (the beginning), which has thus far completed three such projects and has set its sight on other cities and countries to develop retirement villages.'

Another realty firm, Ashiana Housing Limited, is constructing the Rs 200 crore Utsav Lavasa in Lavasa City near Pune. The project will comprise 475 retirement housing units comprising of villas and multiple choices apartments. Manoj Tyagi, vice-president, Ashiana housing, said there is a growing acceptance among discerning Indian senior citizens about retirement homes. He said the residents of the retirement resort will be able to maintain the active, healthy lifestyle that they have grown accustomed to, but with more luxuries like hobby clubs, activity rooms, swimming pool or health club.

Pointers on mutation of property

Mutation is a record in the revenue records of transfer of title to a property from one person to another. The procedure, documentation required and

the fees payable vary from State to State. However, generally, some broad procedures are followed.

Documents required

An application on a plain paper, along with a non-judicial stamp of relevant value containing these details is to be submitted to the Tahsildar of the area:

Name of the area in which the right has been acquired A description of the right acquired The name, parentage and residence address of the person from whom the right has been acquired The manner in which the right has been acquired The name, parentage, residence address of the person who has acquired the right Date on which the right was acquired A copy of the document on the basis of which the mutation is sought - sale deed, Will etc.

Procedure

A proclamation is issued inviting objections to the proposed mutation, specifying the date (not less than 15 days from the date of the proclamation) up to which any objection to the mutation will be entertained. The Patwari submits his report in the prescribed format. The statement of parties is recorded. The contents of the documents are matched with the recorded statements.

If no objection against the proposed mutation is received, it is sanctioned. In case any objection is received against the mutation, the matter is referred to the sun-divisional magistrate of the area. Any party aggrieved by an order of mutation may file an appeal before the Deputy Commissioner concerned within 30 days of the order.

Documents required for mutation

In case of sale deed:

Copy of sale deed Application for mutation with court fee stamp affixed on it Indemnity bond on stamp paper of requisite value Affidavit on stamp paper of requisite value Receipt of up-to-date property tax In case of death: Death certificate Copy of Will or succession certificate Indemnity bond on stamp paper of requisite value Affidavit on stamp paper of requisite value duly attested by notary Receipt of up-to-date property tax In case of death, a copy of the Will or succession certificate is required to ensure there is no malpractice in mutation.

Where the Assessing Officer is satisfied that there is no malpractice in the claim of mutation, only these documents may be insisted on for the mutation:

Death certificate of the original assessee Affidavit together with a no objection certificate from the other legal heirs of the deceased or their successors in interest Indemnity bond containing an undertaking of the executant that he will indemnify the Corporation in the event of a dispute arising from the mutation made on his application Rough site plan showing different portions of the building and the signatures of the persons occupying these portions

In case of power of attorney:

Copy of power of attorney Copy of Will Receipt of payment duly registered by sub-registrar Application for mutation with court fee stamp affixed on it Indemnity bond on stamp paper of requisite value Affidavit on stamp paper of requisite value Receipt of up-to-date property tax

Transfer duty

The prevalent rate of transfer duty on the consideration amount should be paid. Also, for each apportionment, appropriate mutation fee is to be paid. If entire building or plot has been sold, mutation may be allowed on payment of upto-date dues. In case of sale by agreement to sell, mutation will be allowed on payment of transfer duty on prevalent rates. If a part of a building or plot has been sold, mutation may be allowed in the name of the purchaser on payment of up-to-date tax for the portion purchased, Sub-division will, however, not be allowed if the sale is not through a registered document or instrument .

In case of inheritance of a property by more than one legal heir, mutation in the names of all the legal heirs may be allowed subject to clearance of up-to-date taxes by each of them for their respective portions. However, sub-division will be allowed only if physical division exists. The case of each legal heir has to be decided independently regardless of payment or non-payment by others for their respective portions.

Whenever the title of any person, primarily liable for the payment of property tax on any land or building is transferred, the person whose title is transferred and the person to whom it is transferred should give a notice of the transfer to the Corporation. The notice has to be given by the transferor as well as the transferee. If any notice is pending, the liability for the increased rateable value after the date of transfer will be that of the transferee.

As such, the transferee should ensure that either the pending proposals are decided or the additional tax is paid by the transferor. Whenever a transferee presents documents for transfer, a letter is to be issued to the transferor inviting objections , if any, in respect of the claim for mutation . The objections received, if any, should be within 15 days of the issue of the letter. If no objection is received within 15 days, the property may be mutated in the name of the transferee, subject to fulfilment of other conditions.

On the death of the person primarily liable for payment of taxes, the person on whom the title of the property devolves should, within six months of the death, apply to the Corporation for devolution of the property on the legal heirs so that a mutation takes place. The person on whom the property devolves should move for transfer in the municipal records as early as possible . The mutation in the municipal records is for the purpose of payment of property taxes, and it does not mean a legal title for the person in whose name the property has been mutated.

Stamp papers for property to go in UP

LUCKNOW: In a major decision of far-reaching consequences, the UP government has decided to do away with the stamp papers presently required for the sale agreement/sale deed and registration of properties. A blueprint on card for replacing this antiquated method is the introduction of franking machine and e-stamping. The new system is expected to be fully operational in the next six to eight months.

UP got a go ahead for this purpose after the Presidential assent to its recently amended UP Stamp and Registration Act, 2009. The Act, passed by both Houses of state legislature, was waiting for President's nod for the last one month. This was sent back to the state on Thursday after due consideration by the Centre and final approval by President Pratibha Patil.

With this, UP will be the third state in the country to have this system after Delhi, Andhra Pradesh and Haryana. It is now being referred to the state's law department for formulation of detailed rules and regulations for implementing the new system.

Drafted around eight years ago, the Bill could not be made a legislation due to shifting priorities of successive governments. What added to the need for a change was the mega stamp paper scam expose and subsequent arrest of its mastermind Abdul Karim Telgi by Mumbai police in 1991. Starting his shady operation from Karnataka, Telgi's size of the scam was estimated to be well over Rs 20,000 crore. By a rough estimate, UP's approximate loss due to fake stamp papers is estimated to be well over Rs 1,000 crore annually.

The new system is expected to bring much-needed relief from this unwarranted loss

MCHI announces Property 2010

Close on the heels of revival in the real estate sector and increased demand for housing, Maharashtra Chamber of Housing Industry (MCHI),the most prominent body of real estate builders and developers in the country, today announced ‘Property 2010’ their 16th Real Estate and Housing Finance Exhibition to be held at MMRDA grounds, Bandra Kurla Complex, scheduled to be held from 8 to 11 April, 2010 between 11am and 8pm.

Property 2010, is India’s only official & largest Real Estate and Housing Finance exhibition being held in Mumbai now for the 10th year in a row organized bi-annually by the MCHI for the last 10 years, is a one-stop destination for potential property buyers in Mumbai. It offers home buyers a wide range of properties in the budget, high end and commercial properties categories along with a wide choice of home loan options.

Mr. Pravin Doshi, President MCHI said, “As the real estate market is experiencing a boom in view of the huge demand for housing in the recent past, we would like to offer an opportunity to the thousands of prospective home buyers to buy the house that suits their requirements from the properties being displayed at the exhibition.”

Mr. Harish Patel, Convener, Exhibitions adds, “Property 2010 is expected to fulfill the great expectations of a multitude of Mumbaikars looking for high-end, lifestyle and affordable property. The real estate market is now entering a boom phase with stabilized prices and increasing demand. We are sure that the forthcoming real estate exhibition would serve the cause of bridging the gap between the potential buyers and the real estate developers by bringing them at the one platform”.

Mr. Deepak Goradia, Co-convenor Exhibitions, said, “MCHI’s bi-annual exhibition has always turned out to be an opportunity for the home buyers for over a decade. Considering the changing times, MCHI has undertaken several initiatives to create confidence among the buyers with enhanced level of transparency in the transaction. The buyers across the country and also from overseas expected to be benefited from the mega property show to choose the property as per their liking”.

“As many as 75+ Developers will showcase around 524 Projects and over 17,600 apartments ranging from Rs. 10 Lacs to Rs. 10 Crores would be on display at the exhibition,” added Mr. Zubin Mehta CEO of MCHI.

Prominent & leading Mumbai developers like Ackruti City Ltd. , Dheeraj Group, Housing Development & Infrastructure Ltd., Kalpataru Ltd., Kohinoor Planet Constructions Pvt. Ltd, Rustomjee, Nirmal Lifestyle and many more all members of MCHI will display their properties across the Island City, Western & Central Suburbs, Thane, Navi Mumbai & rest of India under one roof.

Around 18 + leading HFI’s & Banks such as State Bank of India, HDFC, ICICI Bank Home Loans, LIC Housing Finance Company, Kotak Mahindra Bank Ltd. etc will be at the exhibition to offer Home Loans at their best rates & lucrative deals.

Property titling has to extend to everything

New Delhi: Peruvian economistHernando De Soto has pioneered the concept of empowering the poor with the use of market principles of property titling. This single action managed to blunt the extremist threat in his own country. De Soto was in India recently to participate in a day-long session on inclusiveness, hosted by the Federation of Indian Chambers of Commerce and Industry (Ficci). Alongside, he met Prime Minister Manmohan Singh, senior government officials and politicians such as Congress general secretary Rahul Gandhi. The government will be consulting him to fine-tune its strategy to make the economy more inclusive. The economist spoke to Mint on a range of issues, including his conversations with officials and impressions of Gandhi. Edited excerpts:

What brings you to India this time?

I was invited by Ficci to give a few conferences and to meet a few people in government that had an interest in the sort of things I was talking about. I just met your Prime Minister (on Saturday). We talked about his projects of inclusion. And he felt that I could be of assistance to them during our discussion and if some of the things that we had learnt that worked and didn’t work in the world could be of benefit. So we have agreed that I would write up something to that effect and we will meet very shortly again.

I’ve also had a very good, frank talk with Rahul Gandhi. And I will also be meeting three or four of your ministers, explaining what it is we do, because India very much wants to get into the inclusion programme, and we know inclusion. This time I’ve toured a lot of slums and in Mumbai I was accompanied by the press and they say: “What do you find particular about India?” Well, apart from the fact that I saw much of the scenes I’d envisioned in Slumdog Millionaire, which was of course thrilling to see, the reply is not much. It’s pretty much the same reality.

What gives you the impression that this government is serious about inclusion?

The first thing is it’s an important government. I mean, this is not a government of a Central American country with a population of five million. This is the Central government of a country with nearly 1.2 billion. So the government, I suppose, doesn’t get into a subject unless it is a crucial subject. To me, it is quite clear in my discussions with them that they have identified the problems. Everything I have seen in my talks with your Prime Minister and with all the government officials I’ve talked to or members of Parliament, they’ve got a clear idea where the problems are and I got the feeling that we can contribute.

What are these problems?

They are of various sorts. One of them is how you tackle the issue (of poverty). There are some people who believe that what you should do is give away property titles. That is not the way it works. That’s a Western way of looking at it; the Western world in the 21st century. To make it really simple, if you go to somebody that I have seen in Dharavi and you say I am going to give you security over your home, he will say thank you, but he won’t say much. He’ll take that piece of paper and he will slip it in the desk and not recirculate it again.

Why? Because from what I have seen in Dharavi, he not only has a home, he has an industry. So his question will be, you are telling me that it’s okay to have my home, but you’re not telling me if my industry is okay and you’re not telling me what you’re going to do with taxes. So, you cannot title homes in developing countries. You got to title everything.

Today, in the West you can say that, because you live in one place and you work in the other. But in the 19th century, Americans had industries in their home too. And they didn’t go around just titling homes. They did the whole thing. The first thing, no titling process of homes is going to work unless you include all other aspects of life—commercial, business, identity, credit and you wrap it up. We learnt that the hard way. It doesn’t work.

So what is the solution you will offer?

The discussion we had in Mumbai was how were you able to defeat terrorists in Peru, (for) which I designed a policy. For example, I found out that the Shining Path, the Maoists, were protecting the assets of the poor. How can a group that is murderous get the allegiance of poor people unless it is doing them a service? You have to look for a reason. So I said, if I were Indian, what were the services that they were giving. And you will find out that it is exactly the formalization of everything.

Because the government can’t give it, doesn’t know how to give it—it wants to, but hasn’t yet found out—well, the terrorist groups will give it to them at gun point. And so, anything that you are looking at that you don’t like in India—you want education, you want clean water, you want all sorts of things. The issue is, can you do any of the things that creates the wealth to get that without one way or the other getting property to people and my reply is still—no.

This holistic vision runs contrary to what the government does in practice, which is direct cash transfers that helps it politically. How does this contradiction play out?

Well, you know, I have a good case, because I have thought it out and because I dedicate a lot of time to it. But I still don’t pretend to have a silver bullet. So I’m not saying that what we do is the only thing you have to do. And a lot of the solutions I propose are rather medium- to long-term simply because to identify the assets of everybody is a major issue that requires all sorts of information and incentives in place.

And governments have to, in the mean time, do something to keep the short-term alive. You remember the Keynesian thought that in the long term, we’re all dead. So you have to do something. So, I cannot talk about the Indian government about what it does. All I can tell you is for the medium-long-term, I think from all the people I talk to, I see eye to eye.

What is your impression of Rahul Gandhi?

Oh, I liked him. I felt sincerity, a real concern. All of his questions were, “How do I, how can I, how can the government help assist the poor in ways that we do not know.” Now, that to me is already pretty good because the tendency of anybody who is a politician in such a large country—you’re not just any politician. And especially if you come from a smaller country like I do.

It’s happened to me with Brazilians. When you talk to the highest level, well, I can assure you that (Brazilian President Luiz Inacio) Lula is going to say, “What do I have to learn from somebody who comes from a smaller country.” And so, when you come to a country that is seven times bigger than Brazil, and the person says you may have seen something that we didn’t, I come out well impressed.

You are aware that India has launched a huge programme to give an ID to every citizen.

Absolutely. The general idea behind this is that when you look at developed countries, even say Germany, 130 years ago, it was 50 or 60 little countries. But since then, it has become a country of 80 million and the world’s become a country of seven billion, and there’s just no way we can get to know each other if it is not through documentation. And documentation means identity.

The property system is one of many ways in which you are able to identify. It doesn’t tell you as much about the biometric distance between your eyes and ears, but it essentially tries to tell you a little bit about what you own, what risks you run. It gives you a history of the asset; and because the asset changes hands, it also gives you a history of the transactions and the enterprise. So when you are talking about identity, of course what you want to know is where are the one billion and 100 million Indians and how can I find where they are to help them better... I would consider, as I said before, anything that relates to property formalization or business formalization is a close cousin of identification, because it is essentially about knowing how things relate to each other.

Since your visit to India in 2007, the world has undergone a dramatic reality check on market economics. Do you still believe in the power of the markets?

I asked my friend Chris Cox, over in 2009, who was chairman of the Securities and Exchange Commission, how much there was, of these derivatives. And he brought out a reply in an article saying his estimate is that there were $600 trillion (Rs27,840 trillion today) of them. Now to get an idea what this means, the whole production of the United States—the GDP (gross domestic product)—is $13 trillion. The whole production of the world altogether is $55 trillion. So $600 trillion is nearly equivalent to 12 times the production of the world. That’s a lot of money..., but it’s not written.


But now, we are going to find that truth will be established. I figure, the next two-three years, as all of a sudden everybody starts beginning to understand that the recession we’re facing, is basically an epistemological crisis. It’s the lack of knowledge of how much paper there is representing wealth that could be either very deflationary or very inflationary... So I maintain my faith in markets that are ruled by law. When markets are not ruled by law, they become shadow economies. And what is surprising since the time you and I last met, is that I would have expected a developing country to produce the biggest shadow economy. It is the West that has produced the largest shadow economy.

What happens to your thesis of empowering the poor through the power of the markets, when the market itself is undermined in this manner?

It works better than ever. Because what I’m telling you is, look what happens to countries where they don’t have property rights. They get into a crisis. All I’m telling you is, the poor are in a permanent crisis. If the poor had their assets identified, over time, they would become a lot more interesting than even these derivatives. So my argument is that everything that is secure and identified is a lot better than anything that is insecure and unidentified.

Do you believe that market economics are a natural corollary to democracy?

Yes. Very much so. In one case you are accepting political vote, an independent vote; and in the other case, you are thinking of an economic vote, which is, do I buy this or do I buy that? So, I do think that they are complementary. I don’t think that market economics means that there’s one model. There are many models. So you’ve got the Norwegians, who believe in lots of government, lots of government services, generally high taxation, the Nordics generally do it. And you’ve got others like the Americans, who don’t even want a national identification system, they want to be so independent from government.

So within the market economy, you’ve got all sorts of variants. You also have a lot of political variants. The Swiss have seven presidents at the same time. The Americans have a president, the British have a prime minister, but not at all like the Swedish prime minister. So, they all come in different variants. Yet, in each of them there is a degree of freedom of choice.

Real estate players line up demands from Budget ‘10

Real estate players line up demands from Budget ‘10

Developers are re-calculating the upwards swing in the real estate industry, especially housing, provided Government pays special attention the
sector. Various developers voice their expectations from Budget 2010.

AVNISH AGRAWAL, DIRECTOR, MERITON GROUP

Talking from common man's perspective, the bank interest rates should be stabilised. Most importantly, stamp duty should be reduced as it puts financial burden on the buyers; it would be a real relief for the common man who has to bear the burden. Besides, for the new projects many clearances are required; if they can be done through a single window, it will be a major breakthrough.

VIJAY JINDAL, CMD, SVP GROUP

Expectations from the budget are very high. We need something that will help the real estate sector to grow leaps and bounds. Government should take steps to bring more transparency and simplicity to the processes involved in the real estate. Affordable housing must get maximum support from the government. The authorities must understand that the demand is for affordable housing and we need to bridge gap between demand and supply.

ABHISHECK LODHA, MANAGING DIRECTOR, LODHA DEVELOPERS LIMITED

We expect the finance minister to provide specific tax incentive and rationalise stamp duty registration charges, which will lead to further investment in affordable housing projects, which would in turn drive urban development. The budget should make high-priority provisions for the laying down of the necessary infrastructure so that new areas can be opened up. This should result in creating and linking up satellite settlements to main cities that will help tackle the demand-supply mismatch.

Further, we look forward to flexibility in FDI norms. Additionally, the budget should offer clarity on the introduction of a real estate regulator, which may not necessarily decide on rates, but should put down firm principles in terms of property dealings and also quality parameters in terms of rating of constructions.

RAJIV SINGLA, MANAGING DIRECTOR, MAPSKO GROUP

Indian real estate sector is passing through a transition phase, where every eye is lying on budget 2010 as the tool to heal the loss. The finance minister needs to focus on offering easy interest rates with more flexible EMIs so that middle class people can come forward to buy their dream house. We should also target foreign investors or NRIs to invest their money in India.

Ashwini Prakash, executive director, Paramount Builders

I expect a lot from the budget 2010-11 as it can be used as an important step by our government to bring real estate market back on the track. I strongly feel that finance minister would certainly work on promoting real estate investment through various fiscal tools like, continuing income tax rebate on home loans.

And at the same time interest rate on home loans should be made more affordable to bring it up to the reach of a common man. In the last two years IT sector and the real estate sector have been the most affected areas and in order to reconcile the earning capacity and to build a sense of security for citizens the government should offer some aid packages to these sectors in Budget 2010 like the US government did.

J K JAIN, CHAIRMAN, DESIGNARCH

The budget must think seriously on decreasing the excise duty to decrease the costs of infrastructural projects. The current economic situation requires the sector to be revived so that the demand for the housing industry increases. To achieve this, the government must look at reducing the property and related taxes along with the taxes on cement and steel, which together contribute to the growing infrastructure needs.


Besides, the realty sector would definitely expect some cuts and provisions in the license fee and the service tax being levied in order to
revive this ailing industry, apart from measures by the Government to reduce the interest rates on loans to the housing sector. Also, amount of rebate must be increased by Income Tax department for housing sector.

ANIL KUMAR SHARMA, CHAIRMAN, AMRAPALI GROUP

As real-estate sector in India contributes five to six per cent of our GDP growth, the sector needs special attention. Our expectations are not very high but are rational. Government must think seriously about low cost housing. Since the stimulus package, bailed out the Nation from recession, we expect that same should continue for at least two more fiscal years.

GAURAV GUPTA, DIRECTOR, S G ESTATES LTD

While developing the housing for low strata income category, for example, economically weaker section (EWS) and lower income group (LIG) housing, the developer is not able to utilise entire floor space index (FSI) since the height is kept at ground plus three to keep the costing low. So amendment should be made for the balanced FSI usage. In the same lines, some cross subsidisation can be called for, such as refunding the stamp duty to developer once the project is complete.

If sec 80 (IB) is restored, nothing like it. Under Section 80 IB (10), in the case of construction of housing projects, 100% of the profits derived in the previous year from a housing project can be deducted if the total commercial space in the project did not exceed 5% of the total built-up area or 200 sq ft, whichever is less.

ASHOK GUPTA, MD, AJNARA INDIA LTD.

The finance ministry has allowed external commercial borrowing (ECB) in realty projects, which includes integrated townships of 25 acres or 50,000 sq m. However, the Reserve Bank of India has not yet notified it. ECBs should be permitted for funding construction costs of at least those real estate projects which qualify for 100% FDI.

I would expect that limit of Rs 1 lakh specified for deduction for repayment of principal amount of a home loan for self occupied residential property should be extended to Rs 2 lakh.

I also wish that extension of tax holiday for housing projects under Section 80 IB (10) should be allowed for conceptualising of new projects while also encouraging more projects to come up in view of the incentive that would be coming.

Budget hopes of the real estate and infrastructure sectors

Budget hopes of the real estate and infrastructure sectors

The global economic meltdown radically impacted the infrastructure and real-estate sectors, reminisces K. T. Chandy, Senior tax professional, Ernst & Young. The decline in demand, the supply excesses, and the high debt position of most Indian developers were some of the factors that contributed to the decline of the real-estate sector over the last two years, he adds, during a recent pre-Budget email interaction with Business Line.

The Budget should come up with measures that can offer the much-needed stimulus to the real estate and infrastructure sectors for sustaining broad-based and inclusive growth, Chandy argues.

Excerpts from the interview.

On the impact of stimulus packages

The fiscal stimulus packages introduced by the Government did help the sectors achieve greater liquidity level, but did little to improve retail demand. It is important that the sectors continue to receive Government support through tax policy, which will help the sectors move firmly towards the path of economic recovery.

Budget 2009 surprisingly had very few proposals that directly benefited the sector despite the fact that the global crisis was at its peak and the real estate and infrastructure sectors were more badly affected than most other sectors. The sectors are hopeful that this time around, the Finance Minister will be more responsive to the needs of the sector.

The re-introduction of direct and indirect tax incentives would go a long way in meeting the current challenges faced by these sectors.

On affordable housing

The resurgence of the affordable housing segment has resulted in a win-win situation for developers in terms of improving demand, for consumers in terms of affordable real-estate, and for the Government in terms of meeting its objectives of providing quality housing to the population at large.

Given that the margins derived from the affordable housing segment are lower than the mid to luxury segments, the Government would do well to re-introduce the tax holiday available for low-cost housing that had lapsed on March 31, 2008.

On sops for infrastructure projects

On the infrastructure front, presently, a tax holiday is available for profits from infrastructure projects such as roads, highways, water supply projects, ports, airports and so on. Budget 2010 should extend the scope of the tax holiday to include projects involving development of integrated townships, which we believe will certainly provide a fillip to such large developments.

Further, while several infrastructure projects are eligible for tax holidays, the same projects are liable to tax under the Minimum Alternate Tax (MAT) provisions. This besides being inequitable has an adverse impact on cash-flows.

It would be a welcome relief, therefore, if such infrastructure projects were exempted both from normal corporate tax provisions and the MAT provisions in accordance with the spirit of the policy to exempt projects with long gestation periods.

On service tax woes

The abolition of service tax on commercial real estate would also be welcome relief to the real-estate sector and for consumers of such real estate. Currently there exists quite some uncertainty on whether the levy is applicable given judicial precedent on this issue. While the tax office seems to be enforcing the collection of such service tax on rentals, a legislative amendment doing away with the levy would help significantly reduce litigation on this matter.

On other policy measures

To improve liquidity and as a matter of policy, the Government may consider broad-basing the external commercial borrowing (ECB) regulations to include other eligible real estate borrowers to tap overseas debt opportunities besides integrated townships, which is currently permitted. This would help the infrastructure/ real estate community invest into new projects and would give the sector sufficient time to repay the loans.

Also on the policy front, it would help if Press Note 2 of 2005 is suitably relaxed to factor in the economic circumstances that have been faced by the real estate sector over the last few years. For example, a clear process could be formulated for a foreign investor to exit investments, which do not appear to have current economic potential.

NRI home loans on the upswing

Most Non-Resident Indians think a lot before investing in property in India and most of the time put off the plan due to the effort, the research and the planning involved.

In some instances, it is put off as they do not have enough funds. For such individuals there is always the NRI home loan.

The Reserve Bank of India defines NRI as 'an Indian citizen who holds a valid Indian passport and who stays abroad for employment or for carrying on business or vocation outside India or stays abroad under circumstances indicating an intention for an uncertain duration of stay abroad is a NRI'.

Purpose of the NRI home loan

The NRI loans are made available for the following purposes:

* Self-construction of a property on a plot of land.
* Finance the purchase of a plot of land allotted by a society/development authority.
* Renovate/improve an existing property in India.
* Purchase of a house either under construction or on a resale.

Non-Resident Indians are also permitted to purchase an existing house or flat. RBI has not prohibited banks from providing financing to NRIs for the purchase of a second house, but the loan on the house is for the self-occupation of the NRI upon their return to India.

Loans are also offered to NRIs against NRE (Non-Resident External) deposits. These loans can be repaid out of NRE funds but the interest would be charged at a commercial rate.

Loans to NRIs are also provided against FCNR (Foreign Currency Non-Resident) deposits.

Difference between a normal and NRI Loan

NRI home loans can be availed by any NRI with as much ease and convince as any Resident Indian would avail a home loan. However, some difference exists between the two kinds of loans, in terms of tenure, documents, repayment, etc.

Interest rate is little costlier for NRIs than Indian residents, it is 0.25 per cent to 0.50 per cent more for NRIs. The NRI gets the only 85 per cent cost of the property as a loan amount. The tenure of loan is also short: it ranges from 7 years to 15 years.

The size of the loan depends upon the borrower's repayment capacity. Up to 36 times of the gross monthly earnings of the applicant may be issued as loan. However, there is a maximum limit. Calculation of eligibility is same as that of Indians living in the country.

The repayment can be done in equated monthly instalments (EMIs) from the Non-Resident Ordinary (NRO) account or the NRE account.

For security, most banks insist that the first mortgage of the property should be in their name. If the property is under construction then adequate additional security is required such as guarantee of third party (either resident or another NRI).

Tax benefits

NRIs cannot claim tax benefits on home loans in India as they have to pay tax in the nation where they work and earn. However, they need to file tax returns to become eligible for home loans. But if they pay tax in India for income earned in India, they can claim tax rebate for the home loan.

The current scenario

An estimated 25 million NRIs living in 130 countries have remitted $52 billion so far this year (December 2009). In fact India topped the list of countries in remittance flow followed by China and Mexico, according to World Bank report on Migration and Development Brief.

The impact of global slowdown, job losses and unviable job offers has necessitated a section of NRIs to return to Indian shores.

According to housing finance companies and banks disbursing home loans to NRIs/PIOs in Dubai [ Images ], there has been a sudden surge in demand for residential property across Indian cities and particularly for Tier-II cities in the wake of the economic slowdown in the emirate.

Southern cities, particularly Bengaluru [ Images ], Chennai and Hyderabad, are driving the demand though minimal level demand exists for other cities as well. Most of the NRIs keen to invest in real estate back home are looking for home loans as they are unable to get loans locally due to the current tight liquidity situation across the United States.

What experts say?

Experts agree that despite turbulence in mature markets, the 'emotional appeal' of buying a property in India may be stronger now. However, this in turn has created a price increase in the last six months.

Popular property portals claim that the number of queries from NRIs has surged nearly 15-20 per cent over the last two-three months. However, just how many of these 'queries' translate into actual sales remains to be seen, say people behind the business.

The focus on NRIs for these portals is stronger now as many are looking to come back to India apart from those who wish to invest in properties.

Another factor that seems to favour NRIs is the foreign direct investment policy that permits up to 100% FDI from foreign/NRI investors under the automatic route has boosted NRI confidence.

Banks have attractive NRI housing schemes to accommodate the housing needs of NRIs. From the stables of housing finance companies, NRI housing finance plans with suitable repayment options are available.

Easy interest rates on housing finance and the improved lifestyle that developers have created have enabled NRIs to acquire property not only for investment, but also for personal use.

Access to NRI loans: At the door step

The response to the real estate market has been so encouraging from the overseas community that it has prompted housing finance companies to set up branches in countries where there is a high NRI concentration, as in the case of ICICI Bank

The bank has representative offices in Dubai, New York, Bahrain, Singapore and the United Kingdom to tap potential property investors there.

ICICI Bank, Sundaram Home Finance Limited, LIC Housing Finance , HDFC , CanFin Homes, Citibank and a host of other scheduled banks are vying for lending opportunities to NRIs.

However, the final decision on whether the time is right to buy a house, whether to use one's own funds or to take a loan, whether to go for an independent house or an apartment, and which home loan provider to use must be made by the NRI himself/herself after careful analysis.

What this means for the realty market

Builders are looking to make up for the huge losses in the past year or so. With growing NRI interest in Indian properties, reports suggest that the realty prices have rebounded to 2007-2008 levels, which however cannot be good news for people scouting for homes with toned down prices.

This is again an example of how a reaction in one corner of the globe can affect another. Sometime back the same scenario happened with rentals, which shot up with a lot of NRIs returning home to take up jobs in India.

There is a need for reforms in realty: KP Singh

NEW DELHI: Even as the domestic economy is showing clear signs of a pickup, the Indian real estate sector is not out of the woods yet as oversupply of residential and commercial projects will continue to haunt realtors for the next 12-18 months, DLF Limited chairman KP Singh said.

Talking to ET after being awarded the Padma Bhushan, Mr Singh said that the sector will witness consolidation and some players (fly-by-night-operators) may go down under as part of a normal business cycle. “I feel overwhelmed by a deep sense of gratitude and humility. I would like to express my heartfelt thanks to the Government of India for this great honour and for recognising my lifetime work. I consider it a tribute to all those who have supported us in the mission of building a new India. This is recognition for the entire housing and construction industry”, he said on receiving the honour.

While appreciating the government for not allowing the liberal flow of funds in the real estate sector, Mr Singh said that the government needs to give importance to this sector as it is one of the largest employment generators and is considered a major engine of growth. “For growth of India, realty is an important sector as it contributes substantially to the GDP and is also one of the biggest employment generators,” he said.

Key facts about India's property market

More than a dozen Indian real estate firms have lined up plans for initial public offers to raise about USD 6 billion, buoyed by an 81% rise in the Mumbai stock index last year and as property buyers return.

Following are key facts about India's property market.

The property market contributes 5-6% to India's gross domestic product, or about USD 50 billion annually to the USD 1 trillion economy, Asia's third largest.
Total foreign direct investment in housing and real estate in India, since investment norms were first eased in 2005, stands at USD 7.7 billion, including USD 2.2 billion in April-November 2009.

The Bombay realty index underperformed the main index last year, rising 70% after a slump in the first quarter, versus the market's 81% gain.

The major cities of Mumbai, New Delhi and Bangalore have the most expensive residential property in India, with rates comparable to New York, London and Tokyo, due to limited land and the government's push to develop its services industry. Apartment prices have risen by around a third in some parts of India since hitting a low in the 2009 first quarter.

The government, wary of an asset bubble forming, has warned that banks should be more cautious about risks in lending to property developers at low rates. However, little has been done yet to actually curb lending.

India is in need of a clearer property policy to better develop the sector, analysts said. Since 2007, the legislature has been drafting a bill to regulate the real estate market, but has met with resistance by developers and industry lobbies.

Affordable housing to play a key role in 2010, says CREDAI

Affordable housing to play a key role in 2010, says CREDAI




Affordable housing segment is set to play a key role in India's real estate sector in 2010 on the back of a significant pick up in
demand, a top industry body has said.

"Affordable housing will be a key factor in driving the sector and we have already started working on progressive solutions in this area for effective and customized implementation of such projects," Confederation of Real Estate Developers' Associations of India (CREDAI) Chairman Kumar Gera said.

An upturn in the economy and the Government's ongoing efforts to push growth in the infrastructure are expected to help the sector regain the growth trajectory, CREDAI said.

"This year will be crucial for the housing industry given the Government's concern over the massive housing needs of the people, especially in urban areas," Gera said.

Noting that the economic recovery would help India's real estate sector to return to the 2007-08 level, Gera said 2010 is expected to be a positive year for the segment.

The revival is expected to be driven by infrastructure growth, which, in turn, can accelerate real estate activities both in the residential as well as commercial spaces, he said.

2010 to be a good year for realty, says Credai

Chennai: Confederation of Real Estate Developers’ Associations of India (CREDAI) is hopeful of a positive year for the India real estate industry in 2010 and the market is expected to return to the 2007-08 level. Given the right opportunity and supportive policies, the real estate sector too would prove effective in driving the country's GDP growth. Infrastructure development is an area which will play a vital role as increased connectivity in terms of roads, rail and communication will lead to development in real estate. Development of other asset classes like warehousing, logistics, tourism and hospitality would also boost real estate activity.

Kumar Gera, chairman, CREDAI, said: “This year would be crucial for the housing industry given the government's concern over the massive housing needs of the people, especially in the urban areas. Supportive policies to encourage and aid the housing requirements of all sections are expected to propel the development in the real estate and allied sectors as well. Affordable housing would be a key factor in driving the sector and CREDAI has already started working on progressive solutions in this area for effective and customised implementation as suited to the Indian situation through NATCON 2010. Also, focus on tier II and tier III cities besides metros will help widen market and generate demand.”

Overseas Indians hesitate to take the property plunge on home turf

Even with a vast wealth base, overseas Indians are reluctant to invest in real estate in India. Despite the government having relaxed its property ownership laws for Non Resident Indians (NRIs), on Day 1 of the Pravasi Bharatiya Divas, the NRIs had some horror stories to narrate about investing in property in India.

“I waited 20 years before investing in property in Delhi. I was worried that I would get cheated. Even after taking all the requisite precautions, I quickly discovered that the previous owner of my property had sold the same property to two people at the same time. I took the case to court, where there has been no resolution for the last eight years, during which time four different judges looked into the case,” said an NRI from Washington DC.

The lackadaisical approach adopted by Indian courts came in for a lot of criticism during a day-long session titled “Property Related Issues of NRIs/PIOs” held at Vigyan Bhawan on Thursday. “After the case was filed, I flew down on three different dates from Washington to attend the hearing, but each time the defendant excused himself from the hearing by offering different excuses through his lawyer. Each time the case was adjourned,” the NRI said.

While the Indian government has advised all NRIs not to give a “general power of attorney” for their property to anyone, even relatives, those attending the conference complained that the ground reality was in conflict with such advice.

“I invested in a property in South Extension and even for something as mundane as getting a power or a water connection, my representative was asked to produce a general power of attorney. The authorities refused to accept a special power of attorney,” V K Chadda, a Hong Kong resident, said.

A presentation on the subject made by Dr Justice A R Lakshmanan, a former judge of the Supreme Court, highlighted steps that may be taken to remedy the current situation.

Chief among them was the suggestion to set up fast-track courts to deal with such cases in a time-bound manner.

A Didar Singh, secretary, Ministry of Overseas Affairs, said the government was “attempting fast track resolutions,” of such cases. He also added, “You must realise that most Indians face the same problems as you do. It is not a problem unique to NRIs. We’re a developing country and all attempts are being made to rectify the system. Having said that, a tremendous amount of investment is being made in India and it is as safe a place as any to invest.”

Addressing the gathering, Vyalar Ravi, Minister of Overseas Indian Affairs said, “As the state government property laws differ from state to state, consultation meetings have been organised with all states and all major states have responded positively by establishing individual departments or cells to deal with the NRI issues.”

Despite the assurances, the NRIs left the session as wary as ever. “It is a little patronising of the government to ask us to take precautions while investing and to consult professionals. We do that anyway, and still end up being cheated. It is a problem that needs to be addressed,” one of the NRI’s attending the conference said.

Affordable real estate will drive growth in Indian property market in 2010, experts claim

Affordable property is set to play a key role in the residential real estate sector in India in 2010 on the back of a significant pickup in demand, according to the country’s developers association.
An upturn in the economy and the Government’s ongoing efforts to push growth in the infrastructure are expected to help the sector grow this year, said Kumar Gera, chairman of the Confederation of Real Estate Developers’ Associations of India (CREDAI).
‘This year will be crucial for the housing industry given the Government’s concern over the massive housing needs of the people, especially in urban areas,’ Gera explained.

‘By the end of 2010 we expect prices in the real estate sector to roll back to at least 90% of the level prevalent in 2007/08,’ he added. CREDAI estimates that values have fallen by 20 to 35% on average across different regions in the country since August 2008.

Real estate growth expectations are based on an assessment of GDP growth by CREDAI, the global revival, domestic sentiments and on the assumption that there would be no major unforeseen fluctuations in the economy or natural calamities this year, he explained.

The real estate market in India was most hit by the downturn between August and October of 2008 when the sales almost came to a standstill.
There were some early signs of recovery in March 2009 and since then prices have stabilised and sales went on to improve considerably by the end of the year, Gera also said.

The growth of the information technology sector in different markets such as Bangalore, Pune and Kolkata will help drive the growth of housing in the regions irrespective of the national IT scenario, he said. And US economic recovery would help stabilise the situation in the IT sector and activities in the Special Economic Zones (SEZs) in the country, he added.

Infrastructure is also set to aid the property market revival on a local basis. In Mumbai prices are already rising at the prospect of the city’s second airport coming up near Khargar. According to Gulam Zia, national director for research and advisory services at Knight Frank, the Navi Mumbai area is likely to grow faster than other location.

Opening may be some six to seven years away yet, he said, but it is already a factor along with a new trans-harbour link and extensions to the metro network.
Generally it is southern cities that will see growth, according to Zia, but places like Kolkata in the east are also expected to see substantial growth, led by the IT industry.
‘Other emerging locations include Mahesh Tala and Tara Tala. Many new townships are being constructed in Tara Tala, gradually transforming it from an industrial zone to a residential township. This will be a promising area in the future,’ Zia added.

Overseas Indians face big problems when investing in Indian real estate

New Jersey-based Client is embroiled in a bitter dispute with her own family members over a 10,000 sq ft property in Gurgaon.

"I had invested in the property in 1999 and issued a limited power of attorney to my brother to oversee the construction on the site. My nephew was employed by me with a salary to help with the construction of the house. My investment is a few crores, but since 2006 my brother and his family have taken over illegal possession of my house. And because I don’t live in India they have bribed the local agencies, and I’m not able to get my property back," she says. There’s hardly anything unusual about this episode, except when you learn that Verma is a lawyer herself.

"The local police and courts have not helped me in any way even though I have approached them and since I have a law practice in the US, I can’t spend too much of time here fighting against my own family," says a desperate Verma. While it is ironic that a legal expert finds herself in this situation, many other prominent overseas Indians too encounter similar problems while investing in Indian property.

It could start with a dream to own a modest home in one’s country of origin. Or it could even be an emotional bond that a second generation person of Indian origin feels with her parents’ homeland that makes her seek transfer of title of family property willed to her in a village in Punjab. Or it could turn into a poignant court battle by an aged NRI couple which wishes to return home from the West but find that unscrupulous land-grabbers have taken possession of their apartment in Mumbai.