City developers divided over govt's move on FDI
City developers are divided over the Centre's proposed move to reduce the minimum area criteria for Foreign Direct Investment (FDI) for both commercial development as well as residential projects.
By PTI |
MUMBAI: City developers are divided over the Centre's proposed move to reduce the minimum area criteria for Foreign Direct Investment (FDI) for both commercial development as well as residential projects.
The government is contemplating reducing the minimum area criteria to 10,000 square meters for commercial projects from 50,000 square meters and to 10 acres from 10 hectares for residential projects, according to a media report.
While Hiranandani constructions opposed the proposed move and prefers to stick to the existing norms, Orbit Group said it had no reservations.
"The government wants FDI in larger projects. I had a meeting with various ministries in the Union Government only two to three weeks ago. They are opposed to FDI in smaller projects," Niranjan Hiranandani, Managing Director, Hiranandani Constructions Pvt Ltd told media here on Thursday.
"The media report must be untrue. Even if it is true the move will actually be incorrect," he added.
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However, Orbit Group Managing Director Pujit Agarwal welcomed the proposed move saying, FDI in smaller projects would actually turn the area into a vibrant one."I welcome the proposed move whole-heartedly. International competition will come in and that is good for the industry," Agarwal said. Real estate rating agency Liases Foras also signals a thumbs up to the proposal.
"With the prices for land going up and the demand on the upswing, the demand-supply gap is widening. Allowing FDI in smaller real estate projects will certainly help the demand-supply mismatch to narrow down the gap," Liases Foras Managing Director Pankaj Kapoor said.
"The proposed move, if implemented, is bound to bring more cash-flow in the realty sector. With this comes in more competition. Ultimately, this will benefit the customer," market sources said.
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