BHUBANESWAR: Reforms in the real estate industry, such as bringing in more transparency and setting up of regulatory body, would boost foreign direct investment (FDI) in the sector by at least 20 times, said Confederation of Real Estate Developers' Association of India (Credai).
“We hope the reforms prescribed in the upcoming bill would be acceptable to global investors. And hence, the inflow of foreign funds, which is around $220 million every year in real estate sector, could shoot up by about 15-20 times,” said Sanjeev Srivastava, vice president of the property developers’ forum at a media conference here.
The inflows would be mainly from the US, Europe and Gulf countries for setting up of large residential complexes across India, he added.
To sort out various problems and constraints of the sector, the forum is organising National Conclave 2013 on December 13- 14, in New Delhi. The policy makers and industrialists from the sector have been invited to join the conference, where draft guidelines will be prepared to overcome the problems.
“The conclave will give us a chance to convey our problem and understand the viewpoint of the government. About 23 members from Odisha will join the conclave,” said R N Kar, chairman of Credai Odisha chapter.
The Real Estate Bill, 2013, seeks to set up a regulatory authority to protect consumers and promote the real estate sector. The bill was tabled in the monsoon session of the Parliament and has been sent to a standing committee for further suggestion.
Credai said, establishment of a regulatory body will address the disputes and refurbish the image of the industry, which has taken a knock in the past few years amid reports of forgery and delays in property transfer by developers.
“The regulatory body will ensure more transparency in the sector, which will boost demand for houses as well as investments as the builders will have to follow international standards,” said Srivastava.
As per a report, about $ 42 billion investment is needed for the Indian real estate sector.
“The support from the governments (in form of infrastructure spending) and from banks (in form of loans) is not sufficient. So India needs large foreign investments for better growth of the sector,” explained the Credai official.
He rubbished the charges of spurt in property prices once foreign money seeps into Indian markets.
“Look at the airlines industry, the rates did not go up because of investment by foreign players. Rather it will create competition and prices would actually correct,” he said.