In a bid to try and rescue the cash starved realty sector, the Department of Industrial Policy and Promotion (DIPP) has moved a Cabinet note to relax foreign direct investment (FDI), reports CNBC-TV18's Nayantara Rai.
Currently, 100 percent FDI in the sector is permitted through the automatic route, but the idea is to relax the norms which make certain projects and companies eligible for FDI.
For example, according to sources, the DIPP, in its Cabinet note, has asked to halve the minimum land requirement from the current 10 hectors to 5 hectors. When we talk of the minimum built-up area, the DIPP has directed a reduction from the current norm of 50,000 square meters to 20,000 square meters of carpet area.
The DIPP's bringing up the concept of carpet area is good news for the consumers as real estate companies try and quote a higher rate by using the super area, common area etc.
The third area where the FDI might be relaxing norms is the minimum capitalisation. Currently at USD 10 million, the government may just relax that to USD 5 million. All this is being done to give a booster shot to the real estate sector.
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