Goa Government Considers Regulating Property Sales to Foreigners
The Goa government, led by Chief Minister Digamber Kamat, is actively considering implementing regulations on property sales to foreign nationals within the state. This initiative stems from growing concerns regarding the potential impact on Goa's image due to incidents involving foreign nationals. Mr. Kamat stated, “It’s not yet a cabinet decision but we are all concerned about how the image of Goa is being ruined in the wake of certain incidents involving foreign nationals”.
Proposed Amendment to the Registration Act
While Law Minister Dayanand Narvekar initially announced a potential ban on foreign property ownership, further clarification revealed a different approach. The government intends to introduce an amendment to Section 22 of the Registration Act. This amendment would empower the state government to regulate such sales as a matter of public policy. Mr. Narvekar explained in a press conference,“The government has decided to bring in the Legislative Assembly an amendment to Section 22 of the Registration Act, which will empower the State government to ban the sale as part of its public policy”. He further elaborated that future property registrations involving foreigners will necessitate clearance from the Reserve Bank of India (RBI).
Conflict with Existing Laws and Regulations
The proposed requirement of RBI clearance raises questions regarding its legal basis, as the Foreign Exchange Management Act (FEMA) doesn't explicitly mandate such approval for property purchases. State Chief Registrar, Mr. Vithal Salkar, highlighted this discrepancy, suggesting that FEMA currently lacks provisions allowing the RBI to grant approvals for property transactions by foreign nationals in India. Several legal professionals have pointed out that Article 245 of the Constitution could potentially nullify any state legislation that contradicts central enactments, unless it receives presidential assent.
Impact of Foreign Direct Investment
Former Advocate General A. N. S. Nadkarni weighed in on the matter, stating, “It is too early to analyse anything now, but with 100% Foreign Direct Investment being permitted, it is to be seen how proposed curbs would stop a foreign national from buying land.” This raises questions about the practicality and effectiveness of the proposed restrictions in light of existing FDI policies. Discussion also revolves around whether the government aims to completely prohibit foreign property ownership or simply implement stricter controls to ensure compliance with FEMA regulations.
Addressing Contentious Property Sales
The issue of land sales to foreigners has become a contentious topic in Goa, with the state government uncovering approximately 400 cases of such transactions. This situation has further fueled the government's efforts to address and regulate foreign property ownership in the state. The focus remains on striking a balance between attracting foreign investment and safeguarding local interests and the image of Goa.