New economic provisions

grace · Congressional Page Joined: 23 May 2009 Posts: 1

Part of the population of Kerala is living abroad for employment and other purposes. The economy of the state is greatly influenced by these non-residents. Large sections of the society have been financially and educationally strengthened by the foreign cash flow.

However, it has been a bone of contention, for these non-residents were reluctant to invest in the state in a major way because of restrictions in repatriation of the capital and profit.

New economic provisions for these Non-resident Indians (NRIs) have ensured that they can cash out on their real estate in Kerala or invest in real estate. This has been made possible by the Reserve Bank of India (RBI) allowing NRIs to remit the proceeds from the sale of immovable property.

With the RBI lifting the 10-year lock-in period of the capital amount, it is expected that the NRI investors will be more enthusiastic since they now able to repatriate the gains. This liberal attitude will be most encouraging to NRIs in the US and UK. Most of these NRIs opt not to return to India. The RBI ruling encourages them to invest in Kerala and exit as and when they choose.

Even the $1 million (Rs 45 million) per annum cap of sale proceeds of immovable property would not be a hindrance in the Kerala apartments and built-up homes market. In the even of an extraordinarily expensive investment, the $1 million cap could possibly be circumvented through co-ownership of properties. This way, a NRI investor can repatriate multiples of the $1 million cap.

NRIs who already own ancestral property in India would be able to sell, repatriate, and possibly avoid messy disputes and litigation.