Category Archives: Dharwad

Landmark Change to The Karnataka Land Reforms Act

In a significant change to the Karnataka Land Reforms Act, 1961, Governor Vajubhai R. Vala on 13/07/2020 signed the Karnataka Land Reforms (Amendment) Act, 2020, a month after the Karnataka Cabinet passed an ordinance making amendments to the Karnataka Land Reforms Act, 1961. Following the Governor’s consent, the State Government has notified the Amended Act in the Gazette notification.

Accordingly, the amendments –

  • Allow Non-agriculturist to purchase agricultural Land (Farm land) in Karnataka. However, restrictions on purchase of irrigated land by non-agriculturist remain
  • Removed the ceiling on income from non agricultural sources to buy agricultural land
  • Also increased the ceiling on number of units of land a person/family can hold

Accordingly, Sections 63(A), 79(A), 79(B), 79(C) in the existing Karnataka Land Reforms Act, 1961, were repealed to enable these changes.

With these changes –

  • Farmers are expected to get better prices for their land
  • Organised farming will get a fillip
  • Technology adoption & modernisation of agricultural practises is expected to increase

Reduce corruption & promote industries alike

facebooktwittergoogle_plusredditpinterestlinkedinmail

What is REAL ESTATE?

Real estate is –

  • Is India’s 5000 year old first choice of  investment
  • Parents & Forefathers blessings
  • It is Senior citizen’s only source of income & wealth 
  • A Widows support
  • A Father’s pride
  • A Husband’s promise to his wife for life long shelter & happiness
  • A Brothers protection to his Sister
  • It’s a Child’s nest & dream
  • A Soldiers support system back home
  • its a roof for covid patients
  • its education
  • It’s the only ASSET from which banks can recover money from bankrupt companies
  • it’s prestige upon which a father gives his daughter’s hand to a stranger

 

Real Estate is REAL ASSET, and invested wisely, yields highest ROI compared to any other asset class.

Cheers!

facebooktwittergoogle_plusredditpinterestlinkedinmail

Initiatives to be taken by Karnataka State Government to revive Real Estate Industry

7th May 2020, Bangalore

As we move from Lockdown 2.0 to INDIA 2.0, we all look forward to the State government to dole out incentives & freebies to kick-start the Economy. But post COVID-19 we all know that the government’s coffers are all empty and any recommendation that will help increase the revenue of the government and at the same time, revive the industry will be more than welcome!

Real estate is driven by sentiment and there is much that needs to be done to push the demand side of it. We have been hearing news about countries like Japan, USA & South Korea wanting to move their manufacturing units from China to countries like India, Philippinnes etc. Land twice as much as Luxembourg is made available by some of the Indian states but Karnataka does not figure much in this list. In contrast neighbouring states like Andhra Pradesh, Telangana & Tamil Nadu have constituted expert committees with representatives from Korea & Japan to attract these industries

For any industry, the primary requirement is LAND.

A case in point is that of POSCO. POSCO, a South Korean conglomerate, after signing an MOU with the state government, was to set up an integrated steel plant in North Karnataka and scouted for land in Tier 2 cities of Bellary, koppal & Bijapur. For over many years the required land could not be acquired and eventually the project was stalled. Similar was the fate of AccelorMittal who were looking for land in Bellary for setting up a steel plant. Its been over 10 years & even today the projects have not taken off as the land was not made available by the state government.

If Land can be allotted by the state government, say in 30 days or 60 days and a single window clearance mechanism is established, including environmental clearances, a lot of industries will come to Karnataka. Karnataka has the required manpower, skilled labour, raw materials etc. Once these industries are setup, it will help develop the Tier 2 & Tier 3 cities & inturn increase employment, incomes & the entire vicinity of these factories will improve.

This is a major opportunity that the state of Karnataka should capitalise on.

We get a sense that our government is listening –

  • On returning from World Economic Forums our CM has proposed changes to the age old Karnataka Land reforms Act in sections 79A, 79B, 80 & 109 thereby making land easily accessible for industries.
  • Land conversions & Building plan approvals have gone online
  • Online registrations is also in the making for the first time in Karnataka

Some of the other changes that we recommend which will increase revenues for the government & also kick-start the Real Estate Industry are –

  • Not just tweaking it, but abolition of Section 79A & 79B and amending Section 80 & Section 109 of Karnataka Land reforms Act, thereby paving the way for investments in agricultural lands by individual & industries alike.
  • Extension of validity of all approvals already obtained by a period of 9 – 12 months to accommodate the delay caused by CORONA
  • Reduce stamp duty to 3% for a limited period of 6 months to induce the fence sitters to invest in Real Estate. A case in point if the state of Maharashtra which has already announced reduction in stamp duty by 1%
  • Revise guidance value of properties as they are at present exorbitant
  • Definition of affordable housing to be raised from 20 Lakhs to 45 Lakhs for reduced Stamp duty benefits as announced in the state budget
  • Property tax waiver for 1 year
  • On the approval side –
    • Issue of Commencement Certificate (CC) & Completion Report (CR) to be made online
    • Ease of doing business initiatives
    • Single window approval system without much of manual interface
    • Payment of statutory fee / Dues / license fee to be linked to stage of construction of Real estate project
    • Release orders – while the intent of the provision is well received, it puts enormous pressure on the developer to complete all civil works and obtain all NOC’s from a plethora of departments & only then be able to register plots. This eventually increases the selling price of the end product. Instead, relaxation from 100% release on complete development to the hitherto system of 40:30:30 rule or equivalent is recommended.

These measures, along with the steps taken by the Reserve Bank of India (RBI) to put of money in the hands of the consumers & also paving the way for reduction in interest rates on housing loans will have a multiplier effect, boost demand and revive the Real Estate industry.

facebooktwittergoogle_plusredditpinterestlinkedinmail

Tier-II cities as a viable investment option for NRIs

Tier-II cities are better investment destinations due to higher potential for growth. Residential real estate prices in some of these tier II cities have seen a very good appreciation in the past few  years and is more likely to grow at a faster pace compared to the metros. Modi Government’s smart city project is also have major role to play as if successfully implemented, it has the potential to transform many Tier-II towns into metros. With improving infrastructure and more industries coming up in these cities, real estate market will more likely to see an expansion. While property prices in metros are sluggish, Tier-II cities have seen a significant positive correction. For NRIs who  usually want to invest either for their families or to create an asset have very good possibility to invest in these non-metros Tier-II cities as they can use them if they decide to relocate to India in future.. With Indian economy growing smoothly the Tier II cities are likely to expand day by day as Tier-II cities grow much faster than metros and more economic activity and infrastructure developments happen there. Major government policy changes like Real Estate Bill which is bringing much need transparency and credibility to the real estate sector will encourage more and more NRI investors to invest without hesitation and worry.
facebooktwittergoogle_plusredditpinterestlinkedinmail