After Russian mafia, Goa is open for Germans, Britons

NEW DELHI: It may sound unbelievable, but around 500 foreigners have made huge real estate investments in Goa. And it’s not just the Russian mafia that has taken advantage of the liberalised FDI regime to pump money into the state. The list includes Germans and Britons who have cornered huge tracts of land.

The developments in the coastal state have caught the eye of the National Security Council, as also the Union home ministry and the Enforcement Directorate. The NSC had, as reported in ET, revealed that the Russian mafia had made huge real estate investments in Goa.

In a document detailing potential threats to national security via FDI, it had noted that the Russian mafia was taking the real estate route to pump in money as the sector fell under automatic approval, provided certain conditions regarding minimum area, lock-in before divestment and municipal regulations were satisfied.

Shaken by reports of a large number of foreigners making a beeline for the coastal state to make real estate investments by taking advantage of a lax interpretation of the Foreign Exchange Management Act (Fema), the state government has now initiated an inquiry to identify such investments and their sources. It has, in the process, discovered that close to 500 foreigners have bought land, most of it agricultural, in the state.

The decision to hand over agricultural land to the foreigners, it is learnt, was taken in brazen violation of the guidelines issued by the Union home ministry. In a letter issued some two months ago the joint secretary (foreigners) had instructed state governments not to sell agricultural land to foreigners.

The guidelines also made it clear that the provisions of Fema had to be strictly adhered to, and that foreigners with a tourist visa could not purchase land in any part of the country.

Only people with business visas, and that too of an indefinite period, could invest in real estate. The catch here is that the Indian government does not issue such visas, meaning that foreigners just could not buy agricultural land, and could only invest in industrial activities.

Taken aback by reports of land passing into the hands of foreigners in Goa, the Mumbai office of the Enforcement Directorate too has written a letter to the state government asking it to ensure that Fema provisions were strictly adhered to.

“If we’re able to establish that agricultural land has indeed been sold to foreigners in clear violation of the rules and laws, we may take the extreme step of cancelling the allotments,’’ a senior state government official told ET.