Most of the metro's & tier II cities in our country have investments from the NRI & PIO community, who have invested in the urbanisation by investing in residential properties. As their money multiplies 40 times when they transfer it back to India, they are able to stash it in assets in the form of property which gives them high rate of interest. This has created a situation of hoarding & escalating the land cost for the people who live & earn within India. Today a person in real need of a roof can't afford a house in his meagre income & the divide is growing.
Although our country needs the valuable foreign exchange, i still feel that reinvestment without them paying a tax should not be allowed. They should only be permitted to FD the transffered sum or earn the regular interest rates. In case any NRI or PIO or the person (parents / close relative) benefitting from such monies invests in land / residential assets, they should be charged a tax which will bring them at a even plain with the citizens of this country who earn and spend in INR currency.
This effort might reduce the pressure for acquiring rural agricultural land of the farmers & might cool down the property prices in the cities & suburbs which are at a boil now. Although India is a continent in itself, yet land is still a scarce commodity in comparison to its population & at the current trend, the future is frightful.