SEZ rules tweaked to allow real estate stakes for foreigners
The government recently changed Special Economic Zone rules to allow foreigners to buy stakes in these zones. They look suspiciously like real estate deals. Reuters
It was quietly done, without any publicity. A group of senior bureaucrats, presumably at the behest of their political masters, recently chose to reinterpret rules governing the sale of assets in Special Economic Zones (SEZs) in a manner which will greatly benefit foreign investors by enabling them to acquire real estate.
While the recent decision to allow FDI in retail will allow foreign parties to own urban real estate as part of the business, the SEZ decision will enable further transfers of developed land to foreign parties — in violation of the laws of the land in letter and spirit. In the process, it will also bail out Indian real estate firms like DLF which are heavily in debt.
This reinterpretation of rules relating to the acquisition of land and property in SEZs by foreign firms is being perceived as a major policy turnaround that has taken place through the backdoor. It is tantamount to a significant policy change that has been done through executive fiat without the approval of either the Union Cabinet or an Empowered Group of Ministers (eGoM), leave alone the Parliament of India.
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