Vinay Iyer went to study medicine in the UK with every intention of returning but ended up settling there with his British wife. Yet he wasn't planning on giving up his share of land that had belonged to his father back in Kerala. So he regularly sent elder brother Sumeet money for cultivation of his land. Meanwhile, Sumeet cultivated the entire land and lived off the proceeds of the estate. That was okay with Iyer until Sumeet's son, Rajan, impersonating as Iyer's son, sold off the entire land. Iyer was heart broken at the loss of the legacy that would have gone to his real son Thomas. But settled abroad, he had neither the time nor recourse to sort out the problem.

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THE NEW OFFERINGS « NRIs will be allowed to repatriate $100,000 per year from sale proceeds of immovable property held by them in India for 10 years or more. « They may repatriate up to $100,000 from their NRO accounts to meet medical expenses abroad for themselves or their family members. « They may repatriate up to $30,000 per academic year from their NRO accounts to meet expenses for theeducation of their children. « They are allowed to take with them $25,000 in exchange when they leave to set up base abroad after they have obtained their emigration visa (the earlier limit was $5,000).

Ajay Gupta, along with brother Sujay, was owner of a house and 50 acres of agricultural land in Punjab. When Gupta left for the UK in 1980, Sujay cultivated the entire estate and lived off the proceeds. Gupta was agreeable to that, and sent money regularly for the upkeep of his half of the house. On a recent trip to India, Gupta discovered to his consternation that Sujay had used up all of the £15,000 he had sent to prime up his own part of the house, and Gupta's half was left in neglect and decay.

Like Iyer and Gupta, there are a number of Indians living and working abroad who are routinely cheated of their property back in India by family. There are others whose empty homes are encroached into and the illegal occupants resist all moves to evict them-especially by somebody who lives so far away. Non-resident Indians (NRIs) have often found it difficult to look after their properties in India and have in the past rued the Indian government laws which do not allow repatriation of proceeds from sale of property.

Finally, however, the promise made by former finance minister Yashwant Sinha in the Union Budget 2002 about liberalising exchange control regulations and providing additional facilities to NRIs and Persons of Indian Origin (PIOs) has recently been put into action. And the overseas set stands to gain quite a bit from these measures.

According to the RBI directive which was announced early this month, an NRI will be allowed to repatriate up to $100,000 per year representing sale proceeds of immovable property held by him for a period of not less than 10 years.

He will also be allowed to repatriate up to $30,000 per academic year out of balances held by him in a Non-Resident Ordinary (NRO) rupee account in order to meet expenses in connection with the education of his children and up to $100,000 to meet medical expenses abroad for himself or his family members.

The new guidelines will certainly make life that much easier for Pradeep Guha who visits Kolkata every year. "I have invested a lot of money in my property in Kolkata," he says. But he finds it is becoming too difficult to take care of that property, especially because he has to return every year just for this onerous task. "My kids are born and brought up in Britain and have no interest in that property. All that I have invested is dead money," he says. "But I am glad to hear about the changes. I can now sell and repatriate the sum to the UK. It's a brilliant move."

The magic is actually working both ways. The move to allow repatriation is boosting the overseas Indian's confidence in investing in property in India. An example is young entrepreneur Keith Souza in London who plans to invest in land because he feels safer with the new regulations that will let him repatriate the sum that he would invest.

Joydeep Mukherji, a New York-based credit analyst, feels that RBI is testing the waters a little bit. As foreign exchange reserves are high, the Central bank is using this cushion to experiment with small two-way flows. "It makes it easier for NRIs to use the money in the accounts for select purposes," he says. "It is easier to put money in those schemes if you know that it could be taken out for those specific purposes. In that sense it is a very good move."

Ashish Patel, an IT executive, is happy about the new move. "I would love to invest my capital in India provided I can take my capital back whenever required," he says. "If I buy property from my own earnings and say take a break from work, I could use the money from its sale for my day-to-day expenses." But he rues the 10-year period before he can sell the property, and also points out that for buying agricultural land, an overseas Indian still needs RBI approval.

The usual thinking of the average Indian has always been to send funds to India from abroad for investment purposes or probably other family support reasons. "But for Indians who do not want to move back to India, this is an opportunity to sell off and secure their investments here," says 26-year-old Nikhil Sen, CEO of New York-based Sunivera Communications LLC, which is part of the Sanjay Dalmia group of companies. He warns, however, that the overall benefits could largely be dependent on India's position on allowing full convertibility of its currency."

Bhishma Agnihotri, ambassador at large, echoes the sentiment: "This is just the initial phase towards free repatriation of funds at a later date, in tune with the Government's policy to further embrace NRIs/PIOs all over the world and reinforce their connectivity with India," he says.

Forty five-year-old Vipin Garg, CEO of Tranzyme Inc-a biotechnology enterprise based in North Carolina-expects to gain personally from the new rules. "Many baby boomers (like myself) will be inheriting property in India over the next two decades," he claims. "I think these regulations will be great and will allow nris additional flexibility in terms of acquiring new property in India because knowing that one can repatriate the money makes it possible to invest money in real estate in India." But like others, he has reservations about the 10-year limit.

Though 28-year-old Malini Rao, a technical specialist at AT&T in New York and who owns property in Delhi's posh Vasant Vihar, feels the new regulations are a step in the right direction, she has a point to add: "In the light of the recent move to approve dual-citizenship for Indians, which is a very positive move, this step does seem contradictory."

Mark Riedy, Partner and Chair of South Asia Practice Groups, Thelan Reid and Priest LLP, says that though the new regulations are a positive step, the Government must take more visible steps to stimulate foreign investment into India if it is to grow the country's economy. "The sooner, the better," he adds.

Though he welcomed the three measures for helping to boost confidence in the NRIs and PIOs community, president of the Georgia-Indo American Chamber of Commerce, Ani Agnihotri, had some reservations. "One has to be cognizant about the ground realities of how these regulations are actually followed by the banks," he says, adding that few NRIs have the understanding and time to go over the plethora of regulations to get their money out of the country when they need it most.

"There should be automatic approval by the RBI and less paper work," volunteers Raja Murugan, a solicitor in London.

-with Anil Padmanabhan