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In order to attract more foreign investment in the cash strapped sector, the government is working on easing the flow of foreign direct investment (FDI) for norms in construction development. According to an official in the Department of Industrial Policy and Promotion (DIPP), the Industry Department is on the verge of finalizing a draft Cabinet note which recommends to relax conditions related to entry norms, least area requirement and minimum lock-in period for funds to make the construction sector more appealing to foreign investors. Currently, there is 100 per cent foreign investment in construction development by the FDI policy which includes townships, housing and construction industry. A report has been prepared With respect to the information given by Ministry of Housing and Urban Poverty, Government of India. An official stated that they will quickly finalize the note and circulate it to other departments and ministries concerned for observations. Later, it will be presented before the Cabinet for clearance. They consist of a three-year lock-in period for funding in housing and townships, and a least built-up area of 50,000 sq. meters and least capitalization of $10 million for wholly-owned subsidiaries. It has been noted that the construction infrastructure or infrastructure development segment engrossed about $22.24 billion Foreign Direct Investment (FDI) between 2000-2013 which accounted to 11% of the overall FDI came into India. However, foreign investments in this area has started coming down since 2012. The Indian Government has come up with a plan to minimize the funding period, the least property built-up area to be reduced to 20,000 sq. meters and least capitalization requirement reduced to $5 million in order to make the sector more attractive. The official also stated that most of the suggestion made by the Housing Ministry have been incorporated. Besides this, they were also trying to get the views of Planning Commission and the Finance Ministry to get the views to make a final note. For more articles on real estate updates please visit our official blog page of website: property reviews and ratings
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