Increase the scope of FDI in real estate: FICCI
Industry body FICCI on Monday said the foreign direct investment norms for the real estate sector should be liberalised further to facilitate more inflow of overseas funds into the country.
By PTI |
NEW DELHI: Industry body FICCI on Monday said the foreign direct investment norms for the real estate sector should be liberalised further to facilitate more inflow of overseas funds into the country.
Listing the challenges faced by the realty industry, FICCI Real Estate Committee Chairman Sushil Ansal stressed the need for expanding the scope of projects and bring them under FDI compliance so that more funds come into the country.
"All projects are not FDI-compliant. Let us increase the scope of FDI projects," he said, suggesting a single-window clearance for FDI-compliant projects to reduce the completion time.
At present, 100 per cent FDI is allowed in the sector but with riders such as covering a area of minimum 10 hectares for residential projects and target for completion of projects.
Raising concerns over FDI not being allowed at pre-IPO stage, Ansal demanded that the same should be permitted as it would increase the inflow.
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FICCI is organising a two-day international real estate summit in Mumbai starting September 27, which would discus, among other things, some of the pertinent issues relating to the industry, such as the requirement of huge funds for property development."The focus of the summit is to make India a global destination for real estate developer," Ansal told reporters here today. Ansal, who is also a chairman of Ansal API, said funds in large amounts are required to meet the housing shortage and to develop office, retail, SEZ projects.
"RBI has put restrictions on the percentge of disposable funds with banks which can be diverted into real estate business," he said, adding that the solution lies in foreign capital inflows and therefore FDI hurdles would be discussed in the forthcoming seminar.
Ansal favoured FDI in retail to be opened up for multi brands as well. "FDI in retail is a must and it should come in the country as soon as possible," he added. He said the controversy relating to the interest of the shopkeepers getting affected due to organised retailing would be discussed in the summit.
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"Wherever organised retailing is flourishing, small shopkeepers have also flourished by becoming a part of supply chain," he noted. Pointing out that a change of political guard in the states sometimes leads to change in thinking, Ansal demanded that state governments should continue with the basic policy relating to the real estate.Computerisation of land record, appropriate tenancy laws that is not tilted toward either landlord or tenant and master plan for every city were the need of the hour, he said.
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Speaking on the occasion on supply and demand constraints, Knight Frank Chairman Pranay Vakil said, "Unless the government is pro-active in addressing the supply situation, we wont be able to keep the pace of the demand."The rent for office space in a prime locality in New York is about Rs 200 per sq ft a month, whereas the same is about Rs 400 in Delhi or Mumbai, Vakil said, adding "the sustainability is a big issue which will be discussed in the summit."
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