CABINET TO TAKE DECISION ON FDI IN FARM LAND

• The UPA government has formed a three-member Cabinet committee to examine the possibility of opening up agricultural land to Foreign Direct Investment (FDI), following a proposal by the Urban Development Ministry on letting foreign realtors buy agricultural land.
• The committee includes Urban Development Minister Kamal Nath, Finance Minister P. Chidambaram and Commerce and Industry Minister Anand Sharma.
• At present, FDI is banned in farm land. Further, Indian banking rules disallow loans for the purchase of farm land even for domestic investors — except in the case of large-scale projects — to safeguard against speculative land acquisition and hoarding.
• The Ministry’s argument is that as farm land is already being acquired for township development, FDI would only help raise more funds for the purpose. Real estate developers would in any case be applying for land use change after acquiring farm land, the Ministry said.