Real Estate Sector is considered to the most wise sector where more and more scope is there to earn good lucrative return. Government loosened up rules for FDI in the construction sector by reducing the built-up area as well as capital requirement and lessening norms.
The proposal to amend the FDI policy in construction was approved by the union cabinet.
The cabinet decided to downsize the floor area to 20,000 sq mt from the previous 50,000 sq mt. and also cut back the capital requirement to USD 5 million from USD 10 million.
In case of serviced plots, the condition of minimum and of 10 hectares has complexly eradicated, an official said.
Despite the fact that 100 per cent foreign direct investment was permitted in townships, housing and built up infrastructure and construction development since 2005 the government had imposed certain conditions.
“The measure is also likely to increase the creation of much needed low cost Affordable Housing in the country and development of smart cities, “stated by statement.
The cabinet has not reduced the 3 year lock-in period, it has consented foreign investors to exit on project completion or 3 years from the date of the final investment subject to the development of trunk infrastructure.
The government also added it was important to give relaxation as FDI inflows in the sector, which observed steady rise during 2006-07 and 2009-10, now started declining.
Additionally, between April 2000 and August 2014, the construction sector obtained FDI worth USD 23.75 billion or 10 per cent of the total FDI attracted by India during the time.
Realtors apex body CREDAI president C Shekar Reddy said it would aid developers get a substitute way of funding for their projects.
