New Delhi, Oct. 29: The government today relaxed the rules for allowing FDI in construction, including housing, by lowering the minimum built-up area and capital requirements for realtors.
The move is aimed at boosting investments in the sagging real estate sector.
The cabinet decided to reduce the minimum built-up area requirement for FDI in construction projects to 20,000 square metres from 50,000 square metres. The minimum capital requirement has been brought down to $5 million from $10 million, an official statement after the meeting, headed by Prime Minister Narendra Modi, said.
The reduction of minimum requirement for built-up area and capital may help the NDA government to deliver on its promise to create 100 smart cities by 2020.
"The funds will, however, have to be brought in within six months of the commencement of the project. The investor will be permitted to exit on completion of the project, or after three years from the date of final investment, subject to the development of trunk infrastructure," the release said.
The government may permit repatriation of FDI, or the transfer of stake by one non-resident investor to another, before the completion of the project. The Foreign Investment Promotion Board will consider these proposals on a case-to-case basis, it said.
Till now, 100 per cent FDI was allowed in real estate with strict riders, including a lock-in period of three years, during which the investment could not be repatriated.
"The new rules will encourage the development of smaller projects, especially in urban areas, where the availability of land is limited. The risk of delay in smaller projects will be reduced," Akash Gupt, executive director of PWC, said.
"These measures are expected to result in enhanced inflows into the construction development sector. It is likely to attract investments in new areas and encourage development of plots for serviced housing given the shortage of land in and around urban agglomerations as well as the high cost of land.
"The measure is also expected to result in the creation of low-cost affordable housing and development of smart cities," the statement said.
Wheat MSP
The government today raised the minimum support price (MSP) for wheat by a nominal Rs 50 to 1,450 a quintal to encourage farmers to cover more area under the crop in the ongoing rabi season.
No comments:
Post a Comment