Real Estate Act comes into force today, only 13 states notify rules

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The Real Estate (Regulation and Development) Act , 2016, or RERA, aims to protect home buyers and encourage genuine private players

The much-awaited Real Estate Act comes into force from Monday with a promise of protecting the right of consumers and ushering in transparency but only 13 states and Union Territories (UTs) have so far notified rules.

The government has described the implementation of the consumer-centric Act as the beginning of an era where the consumer in king. Real estate players have also welcomed the implementation of the Act, saying it will bring a paradigm change in the way the Indian real estate sector functions. The government has brought in the legislation to protect home buyers and encourage genuine private players.

The Real Estate (Regulation and Development) Bill, 2016, (RERA Act), was passed by Parliament in March last year and all the 92 sections of the Act comes into effect from 1 May. “The Real Estate Act coming into force after a nine-year wait and marks the beginning of a new era,” Housing and urban poverty alleviation (HUPA) minister M. Venkaiah Naidu said. The minister said the law will make “buyer the king”, while developers will also benefit from the increased buyers’ confidence in the regulated environment.

“The Act ushers in the much-desired accountability, transparency and efficiency in the sector, defining the rights and obligations of both the buyers and developers,” Naidu said. The developers will now have to get the ongoing projects that have not received completion certificate and the new projects registered with regulatory authorities within 3 months from Monday.

Under the rules, it is mandatory for the states and UTs to set up the authority. However, only 13 states and UTs have so far notified the rules. The states that have notified the rules are Uttar Pradesh, Gujarat, Odisha, Andhra Pradesh, Maharasthra, Madhya Pradesh and Bihar.

The housing ministry had last year notified the rules for five UTs—Andaman and Nicobar Islands, Chandigarh, Dadra and Nagar Haveli, Daman and Diu, and Lakshadweep, while the urban development ministry came out with such rules for the National Capital Region of Delhi. The other states and UTs will have to come out with their own rules.

A HUPA ministry spokesperson said the ministry has been taking up the matter with all the states and UTs for implementation of the Act, requesting them to ensure action as per the provision of the Act within the time limit. The ministry had earlier formulated and circulated the model rules to the states and UTs for their adoption and it is their responsibility to notify the rules, the spokesperson said. Those states which have not notified the rules will face public pressure and even people could approach the court in the matter, he added. On reports that key provisions have been diluted by some states, he said it was pointed out to those states and they have assured the ministry that it would be corrected.

The Indian real estate sector involved over 76,000 companies across the county. Some of the major provisions of the Act, besides mandatory registration of projects and real estate agents, include depositing 70% of the funds collected from buyers in a separate bank account for construction of the project. This will ensure timely completion of the project as the funds could be withdrawn only for construction purposes. The law also prescribes penalties on developers who delay projects. All developers are required to disclose their project details on the regulator’s website, and provide quarterly updates on construction progress. In case of project delays, the onus of paying the monthly interest on bank loans taken for under-construction flats will lie on developers unlike earlier, when the burden fell on home buyers, said real estate service provider JLL India CEO and Country Head Ramesh Nair.

RERA also states that any structural or workmanship defects brought to the notice of a promoter within a period of five years from the date of handing over possession must be rectified by the promoter, without any further charge, within 30 days, he added. If the promoter fails to do so, the aggrieved allottee is entitled to receive compensation under RERA, Nair said.

Other highlight of the Act is imprisonment of up to three years for developers and up to one year in case of agents and buyers for violation of orders of appellate tribunals and regulatory authorities. As per industry data, real estate projects in the range of 2,349 to 4,488 were launched every year between 2011 and 2015, amounting to a total of 17,526 projects with investments of Rs13.70 lakh crore in 27 cities, including 15 state capitals. About ten lakh buyers invest every year with the dream of owning a house.

Real estate industry bodies Confederation of Real Estate Developers Associations of India (CREDAI) and National Real Estate Development Council (NAREDCO) said the implementation of this law will bring paradigm change in the way Indian real estate functions. They expect property demand to rise but supply may get affected in the near term. “It will bring a paradigm change in the real estate sector. It will protect buyers who have purchased flats in the past. The regulator under the RERA should find ways to help complete ongoing projects and provide relief to home buyers,” NAREDCO chairman Rajeev Talwar said.

CREDAI president Jaxay Shah said RERA will increase transparency in the sector and boost confidence of both domestic and foreign investors. He, however, said there will be some “teething problem” initially in implementation of this law. Asked about the impact on prices, Shah said, “Supply will dip during this year but demand will improve as buyers will have increased confidence about investing in the property market” The real estate prices will remain stable now but rates could rise by 10% in the next six months, he added.

Source: http://www.livemint.com/Companies/5P2gvJ8eUojc1vz0fgR2hJ/RERA-comes-into-effect-tomorrow-only-13-states-notify-rules.html

FIPB approves 9 FDI proposals worth Rs 659 crore

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Inter-ministerial body FIPB has approved nine investment proposals, including those of Netmagic Solutions and Vodafone, totaling a foreign investment of Rs 659 crore.

Inter-ministerial body FIPB has approved nine investment proposals, including those of Netmagic Solutions and Vodafone, totaling a foreign investment of Rs 659 crore. “Based on the recommendations of the Foreign Investment Promotion Board (FIPB) at its meeting held on February 21, the government has approved nine proposals involving FDI of Rs 659 crore and recommended three proposals for the Cabinet Committee on Economic Affairs (CCEA),” an official statement said. The FIPB, headed by Economic Affairs Secretary Shaktikanta Das, cleared proposals of Netmagic Solutions entailing an investment of Rs 534 crore and Vodafone India Rs 55 crore. It recommended proposals of Rs 750 crore of Apollo Hospitals Enterprise, Rs 900 crore of Star Technologies and Rs 789 crore of Flag Telecom Singapore Pte to the CCEA, it said.

The panel has deferred six proposals, including those of Gland Pharma, Crown Cement Manufacturing India Private and Powervision Export and Import India Private. It also said proposals of Hindustan Aeronautics, Spectrumlabs India Private and PMI Engineering Exports Private did not come to the FIPB as these were on the automatic route. The government has already announced winding up of the FIPB by putting in place a new mechanism, a move which will further improve ease of doing business.

Finance Minister Arun Jaitley, in his Budget 2017-18, announced the decision to abolish the FIPB, saying 90 per cent of foreign investment approvals are via the automatic route and only 10 per cent go to the board. The FIPB offers single-window clearance for applications on FDI in India that are under the approval route. The sectors under the automatic route do not require any prior approval and are subject to only sectoral laws.

India allows FDI in most sectors through the automatic channel, but in certain segments that are considered sensitive for the economy and security, the proposals have to be first cleared by the FIPB. With growth in FDI in important sectors like services and manufacturing, overall foreign inflows in the country rose by 30 per cent to USD 21.62 billion during the first half of 2016-17. FDI in the country rose 29 per cent to USD 40 billion in 2015-16 as against USD 30.94 billion in the previous financial year.

Source: http://www.financialexpress.com/economy/fipb-approves-9-fdi-proposals-worth-rs-659-crore/601389/

Gujarat’s foray into B2B ecommerce gives big push to small units

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Gujarat government has entered into B2B ecommerce space as it allowed UK-based cloudbuy.com to develop B2B marketplace for accelerating its growth in state business by supporting SMEs and larger organisations via digitalisation.

According to a top official from the industry department, the state plans to give a digital push to the SMEs and large organisations from Gujarat via Business to Business (B2B) ecommerce.

However, Dhananjay Dwivedi, secretary, department of science and technology, Government of Gujarat, said the company had entered into a MoU with the state government.

“Any other ecommerce company that can support business in Gujarat can also come” he added.”With B2B trading opportunities being much bigger and faster now, the businesses of Gujarat will immensely benefit both in terms of revenue growth and reaching out to a far wider audience here in India and globally,” said Nilesh Gopali, cloudBuy, Country Head – India.

He also confirmed that cloudBuy.com has not received any exclusivity from the state government for developing state-focused B2B ecommerce platform.

According to the company, the creation of this new emarketplace will create many jobs within Gujarat through the creation of technical centres to help businesses upload and optimise their content.

Each company that registers for the marketplace will be given the opportunity to list their company details along with products and services online, promoting their business to a much wider audience. cloudBuy.com would also provide full access to support system and reporting to maximise their growth through ecommerce sales.

It would also provide fulfillment services like logistics providers and financial institutions through partners on the platform making it easier for businesses to transact. Accessibility for all users through cell phones on a secure platform will enhance the user experience ensuring trades online.

Source: http://economictimes.indiatimes.com/articleshow/57611242.cms

FDI in services sector up 77.6% to $7.55 billion in nine months of FY17

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The commerce and industry ministry is considering relaxing FDI norms in certain sectors including retail to further boost inflows.

Foreign investments in the services sector increased 77.6% to $7.55 billion in the first nine months of the current fiscal, helped by government steps to improve ease of doing business.

The sector, which includes banking, insurance, research and development (R&D), outsourcing, courier and technology testing, had received foreign direct investment (FDI) worth $4.25 billion during the April-December period of last fiscal, 2015-16, according to the Department of Industrial Policy and Promotion (DIPP).

The sector contributes over 60% to India’s gross domestic product (GDP) and accounts for 17% of the total foreign investment inflows.

The other sectors where inflows have recorded growth during the nine-month period of 2016-17 are telecom ($5.54 billion), trading ($2 billion), computer software and hardware ($1.81 billion) and automobile ($1.45 billion).

In step FDI growth in important sectors like services, overall foreign inflows in the country increased 22% to $35.84 billion during April-December 2016-17.

The commerce and industry ministry is also considering relaxing FDI norms in certain sectors including retail to further boost inflows. Foreign investment is considered crucial for India, which needs around $1 trillion for overhauling its infrastructure sector such as ports, airports and highways to boost growth.

A strong inflow of foreign investments will help improve the country’s balance of payments situation and strengthen the rupee against other global currencies, especially the US dollar.

 

Source: http://www.livemint.com/Money/G5PEusUPpmxanUhuo3O67O/FDI-in-services-sector-up-776-to-755-billion-in-nine-mon.html

The govt has revised 40 tax treaties for information

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India has revised 40 treaties for avoidance of double taxation so that the information exchanged with partner nations on tax matters can also be utilised for other purposes including criminal proceedings, Parliament was informed today.

“Treaty partner countries have been requested to modify the tax treaties, so as to explicitly include provisions that will enable information exchanged for tax purposes to be utilised for other purposes, including criminal proceedings in non-tax matters,” Minister of State for Finance Santosh Kumar Gangwar said in a written reply to Rajya Sabha.

“40 treaties for avoidance of double taxation have been revised accordingly,” he said.

In addition, Gangwar said, India has signed “the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, which also similarly facilitates exchange of information”.

These developments enable use of such information by non-tax agencies, subject to agreement by the Competent Authorities of the Requested Contracting State, he said.

Replying to a separate question, Gangwar said the Enforcement Directorate has provisionally attached assets of worth Rs 9,298 crore in 2016.

The minister said that as per estimate over 2,000 tonnes of gold is held by household, trusts and various institutions in India.

Source: http://www.freepressjournal.in//the-govt-has-revised-40-tax-treaties-for-information/1012899

US Inc faces uneasy test of doing business

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President Donald Trump vowed to end business as usual in Washington. Global companies are now learning just what that means.

 

What began before his inauguration, with attempts to cajole corporations like Toyota Motor into keeping jobs in the US with critical tweets, is now escalating into a crucial test for business leaders trying to maintain cross-border flows of people and goods that underpin commerce in the 21st century.

 

Trump’s Friday signing of an executive order barring the citizens of seven Muslim-majority countries from entering the US, on the heels of his war of words with Mexico over trade, alarmed executives from big employers including General Electric (GE), Google and Microsoft.

 

GE Chief Executive Officer  (CEO) Jeff Immelt’s response underscored the delicate balance business will have to strike. “We have many employees from the named countries and we do business all over the region,” he said in an internal e-mail. While he called his staff “critical to our success,” he avoided direct criticism of Trump’s policy. GE “will continue to make our voice heard with the new administration and congress and reiterate the importance of this issue,” he said.

 

Trump’s order shut the door to nationals of Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen — including refugees, visiting scholars and even permanent American residents who happened to be abroad for work or holidays.

 

“We would never think this would become any kind of an issue,” Ludwig Willisch, chief executive officer of North American operations at Bayerische Motoren Werke, said at an automotive conference on Saturday. “This country is a melting pot, freedom of speech, everybody gets together and creates this great country. So, we were not prepared for this kind of thing.”

 

In a sharply worded message to staff, Lloyd Blankfein, Goldman Sachs’s long-time head, broke with the Trump administration over its controversial attempt to crack down on immigration. The voicemail, sent on Sunday to the firm’s 34,400 employees, pits Blankfein against an administration stocked with Goldman Sachs Group veterans, including his former No. 2, Gary Cohn, and key Trump advisor Steven Bannon. Blankfein told employees that President Donald Trump’s executive order, parts of which were blocked by federal courts, is at odds with the firm’s long-held policies on workforce diversity and could disrupt Goldman Sachs’s business. “This is not a policy we support,” the chief executive officer said. Other Wall Street firms took a softer approach. JPMorgan Chase & Co’s operating committee, led by CEO Jamie Dimon, said in a memo to staff on Sunday that it’s “grateful for the hard work and sacrifices made to keep our country safe,” and that the country was “strengthened by the rich diversity of the world around us.” It didn’t express an opinion on the policy.

 

Wells Fargo & Co and Morgan Stanley said they were monitoring the ban’s impact on employees.

 

Steve Schwarzman, CEO of the world’s largest private equity firm, Blackstone Group, took a pass when asked about the immigrant order’s effect on his business. “I’m not going to comment on that,” he said at a Catholic Charities luncheon on Sunday, where Governor Andrew Cuomo and Senator Charles Schumer, both New York Democrats, used their remarks to about 150 guests to oppose the order.

 

Optimists suggested he would quietly drop pledges to tear up trade deals and reconsider defense commitments to allies.

 

The about-face was epitomized by Tesla Motors Inc. founder Elon Musk; earlier this week he praised Trump’s nominee for secretary of state, former Exxon Mobil Corp. CEO Rex Tillerson, as a potentially “excellent” pick. On Sunday, Musk asked his 6.89 million Twitter followers to read the immigration order and suggest amendments, which he will then take to Trump’s CEO advisory council to develop a consensus and present to the president.

 

On the other hand, US auto companies, whose home state of Michigan has a large Arab community, have yet to make their views known.

 

Wall Street has also largely stayed out of the fray. At some of its biggest banks, executives said they were struggling to understand whether the order will ultimately apply to employees who work in the US with green cards or legal work permits. If it doesn’t hit visa holders, few major companies’ employees will be affected, according to one executive who asked not to be identified because he wasn’t authorized to comment. On Sunday, JPMorgan said it was working to assist affected employees.

 

Starbucks Corp. CEO Howard Schultz said the executive order left him with “deep concern, a heavy heart and a resolute promise.” The coffee chain will redouble efforts to hire as many as 10,000 refugees over five years in 75 countries, he wrote in a note to employees Sunday.

 

Reaction to the ban was sharpest from the technology industry, with Twitter awash in reminders that Apple Inc. co-founder Steve Jobs was the son of a Syrian immigrant. Among the first to speak out was Google CEO Sundar Pichai, himself an immigrant from India, who called the policy “painful.” Another India-born CEO, Microsoft Corp.’s Satya Nadella, took to LinkedIn to highlight “the positive impact that immigration has on our company, for the country, for the world.”

 

Trump should expect sustained challenges from the tech industry in particular, said Ian Bremmer, CEO of political consultancy Eurasia Group, because it differs significantly with him on issues from net neutrality to immigration. “While most every CEO wants to just ‘get back to business’ after Trump’s election, that’s going to prove much harder” for technology leaders, he said. “There’s going to be a fight.”

 

Compounding business leaders’ unease was the order’s confused implementation, which included unclear directives on how border agents should treat lawful permanent residents, and contradictory statements about how it would affect those who hold passports from two countries — for example, a dual citizen of Iran and the UK

 

For now, lawyers are advising such individuals not to travel to the US, or to stay put if they already live there. The new rules came into force with no transition period, leaving carriers like Emirates and American Airlines Group Inc. unsure what to do with passengers booked to fly to US airports, or already in the air.

 

“We are committed to protecting our people and will provide whatever support is necessary to protect them and their families,” Michael Roth, CEO of advertising firm Interpublic Group of Cos., wrote in an e-mail.

 

The most important business stories of the day. Get Bloomberg’s daily newsletter. The move’s implications extended far beyond the business world. On Sunday the British long-distance runner Mo Farah, a four-time Olympic gold medalist who
was born in Somalia, said he may not be able to return to Oregon, where he trains and lives with his children. The Academy of Motion Picture Arts and

 

Sciences said Oscar-winning Iranian director Asghar Farhadi may be unable to attend this year’s awards, for which his film “The Salesman” has been nominated.

 

Trump’s order has “significant commercial implications,” said Allyson Stewart-Allen, CEO of International Marketing Partners in London, who advises European companies on doing business in the US “What do you do with an employee on an executive salary who’s sitting in an airport lounge kind of like Tom Hanks in ‘The Terminal’?”

 

Source: http://www.business-standard.com/article/international/us-inc-faces-uneasy-test-of-doing-business-117013100003_1.html