Housing and commercial complexes seeking foreign direct investment (FDI) will now face easier compliance norms. The department of industrial policy and promotion (DIPP) on Wednesday sent a policy document that seeks to ease FDI rules for construction development to the Cabinet.
The Cabinet note seeks to reduce the minimum capitalisation of $10 million for wholly owned subsidiaries and $5 million for joint ventures with Indian partners to $5 million and $2.5 million, respectively.
Besides, for the first time, the note seeks to replace the concept of built-up area as defined in the the Real Estate (Regulation and Development) Bill to curb unfair practices.
?We wanted to address consumers’ concerns by using carpet area for sale, which has till now been ambiguously sold as super area or super built-up area,? said a DIPP official.
However, the relaxation has come with a rider as earlier, at least 50% of each such project had to be developed within a period of five years from the date of obtaining all statutory clearances.
Now, the developer will have to complete the entire project before the end of five years of getting all clearances. The note also reduced the minimum requirement for land for a serviced housing project to five from 10 hectares.
In case of construction-development projects, the minimum built-up area of 50,000 square metre has been changed to 20,000 square meter carpet area.
At present, 100% FDI is permitted through the automatic route in the sector, which includes townships, housing, commercial premises, hotels, resorts, hospitals, educational institutions, recreational facilities, city and regional level built-up infrastructure.
