PM's plan for 100 smart cities: Government set to ease norms for FDI in construction
The government is seriously considering the removal of all restrictions on size and minimum capitalisation for the smart cities as well as affordable housing projects
Sep 23, 2014
Source : The Economic Times
Narendra Modi, Prime Minister India


NEW DELHI: The Narendra Modi government is set to substantially ease norms for foreign investment in the construction sector, hoping to drum up interest in the prime minister's plans for 100 smart cities as well his affordable housing initiative.

The government is seriously considering the removal of all restrictions on size and minimum capitalisation for the smart cities as well as affordable housing projects. "The discussions are on for exempting smart cities from all FDI conditionalities. We need to give them a push by making it attractive for investors," said a government official.

The new policy is also expected to provide easier exit windows.The proposal could be moved for the Cabinet's consideration as early as next week. The new foreign direct investment (FDI) regime may allow developers to exit after the completion of the project or through the approval of the Foreign Investment Promotion Board ( FIPB) against the three-year lock-in period currently imposed, a condition that has been a big deterrent to foreign investment in the sector.

Developers will be exempt from restrictions related to minimum capitalisation and exits if they commit 30% of the project cost to affordable housing. "The thrust will be on affordable housing and smart cities. The proposal is that they be exempted from the conditionalities to attract more foreign investment. There is a need to channelise investments in the affordable housing segment," said a government official aware of the development.

The minimum built-up area has been proposed to be cut to 20,000 sq mt from 50,000 sq mt while the minimum capitalisation requirement will be halved to $5 million from $10 million. The government hopes the easier rules will also help in the faster completion of projects delayed by a squeeze on funds because of elevated debt levels. "The (Cabinet) note is more or less finalised," the official added. The government is planning to set up 100 smart cities across the country that will provide modern amenities, education and employment opportunities. Finance Minister Arun Jaitley had proposed an allocation of Rs 7,060 crore in the Union Budget toward smart cities in the country.

The sector attracted $1.2 billion in FDI in 2013-14, down 8% from 2012-13. Investors would likely be able to exit projects on receipt of occupancy and/or completion certificates issued by the competent local authority or after FIPB's nod." It is being discussed to do away with the minimum lock-in period of three years after the completion of the project. A developer should be allowed to exit immediately after completing it," the official added.This will also create an incentive for faster completion of projects.

Latest Realty News

Scams hit real estate prospects in Bhubaneswar
Sep 23, 2014
Recent developments in land and chit fund scams have worsened miseries of the real estate industry in the city
Probe into Land Scam Begins
Sep 23, 2014
Additional Chief Secretary of Revenue Taradatt reached Dharmasala tehsil in the district to probe the land scam and verified several documents in this regard
CBI arrests Mohanty in Artha case
Sep 23, 2014
The Central Bureau of Investigation (CBI) arrested former advocate-general (AG) Asok Mohanty for his alleged links with Pradeep Sethy, chairman-cum-managing director of money deposit circulation company Artha Tatwa (AT) Group
Green norms for commercial projects to be relaxed
Sep 23, 2014
The Union environment ministry is set to ease clearance norms for townships and building and construction projects in or close to wildlife sanctuaries, national parks and eco-sensitive zones
Lotus Greens to build 4 realty projects; eyes Rs 4,400cr sales
Sep 23, 2014
Real estate firm Lotus Greens Developers today said it will build four new projects in the national capital region with expected sales of Rs 4,400 crore over the next four years
Home prices set to zoom as Delhi government hikes circle rates
Sep 23, 2014
Home prices in the capital are set to go up further with Delhi government today hiking the circle rates -- the minimum valuation at which properties have to be registered -- by up to 20 per cent
'Smart Cities' to be Identified Before Budget: Venkaiah Naidu
Sep 22, 2014
The Centre will start identifying urban areas which can be transformed into "smart cities", before the Budget, Union Urban Development Minister Venkaiah Naidu said
Excess prime land for Hyderabad metro rail project
Sep 22, 2014
In what could turn out to be the next big land scam, huge tracts of excess land was acquired by the government for the Hyderabad Metro Rail project
South Delhi administration recovers land worth over Rs 100 crore
Sep 22, 2014
In a series of anti-encroachment drives carried out between August and September, the south Delhi administration has retrieved gram sabha land worth more than Rs 100 crore
'GDA notices no deterrent to illegal constructions'
Sep 22, 2014
Despite thousands of notices being issued by the Ghaziabad Development Authority to errant developers, illegal constructions continue to mushroom in various parts of Ghaziabad

Latest Realty News Of State

Realty Talk's