Proposed 100% FDI in Completed Housing Projects
In an earnest attempt to help revive an economically crucial sector in these Covid-19 unprecedented times, the government is reportedly planning to relax the foreign direct investment (FDI) rules for the realty sector and give the green signal for 100% overseas investment in completed projects. The move, if implemented, will allow real estate firms to monetise completed housing projects amid the current liquidity crunch caused by the pandemic. Many industry experts welcome the proposed relaxation, saying it will help real estate companies to monetise their completed projects so that they could concentrate on finishing pending projects that are struck mainly because of lack of funds. More importantly, there will be further reforms in mining and certain other sectors where there are still some restrictions as the Centre is poised to ease processes and make it simple to invest in India to counter the coronavirus-induced economic slowdown. The Department for Promotion of Industry and Internal Trade (DPIIT) is weighing the options of attracting more investment in the construction sector from overseas. At present, the government allows 100% FDI under the automatic route in construction-development projects — townships, residential and commercial projects, roads, bridges, hotels, resorts, hospitals, educational institutions. This is subject to conditions such as a three-year lock-in period before the initial investment can be repatriated.
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