The central
Government is looking to lower the minimum built-up area for attracting foreign
direct investment (FDI) in housing projects to 20,000 square metres from the
current 50,000 square metres.
“This would boost FDI
flow into the sector, Mr. Arun Kumar Misra, Secretary, Ministry for Housing and
Urban Poverty Alleviation (HUPA), told BL.
Mr. Misra said his
Ministry would urge the Department of Industrial Policy and Promotion (DIPP) in
the Commerce and Industry Ministry to change the current stipulation on
built-up areas.
In real estate, FDI
is allowed up to 100% through the automatic route so long as certain conditions
are met. One of the conditions is that the built-up area should be at least
50,000 square metres.
Mr. Misra also said
that lowering of minimum built-up area norm would benefit medium-sized
developers, as they would be able to attract FDI into their projects.
“If you keep the
minimum built-up area norm at 50,000 square metres, only big developers /
promoters will benefit” Mr. Misra said.
Mr.Misra also said
that the Real Estate Regulatory Bill, which has received union Cabinet nod, was
likely to be taken up during the upcoming monsoon session of Parliament
beginning August 5, 2013.
The Real Estate
Regulatory Bill is expected to pave the way for establishment of a regulatory
authority to ensure accountability, fair practice and fast-track dispute
resolution.
There is an estimated
demand of 1.5 crore houses for low-income customers, with a monthly household
income of Rs. 10,000 to Rs.-25,000, who can afford privately built formal
housing costing Rs. 4 lakh to Rs.10 lakh without any Government aid.
This is one of the
key findings of a Monitor Deloitte report on the ‘State of the Low Income
Housing Market’ released on Wednesday.
This estimated demand
translates into an opportunity of Rs. 9 lakh crore for developers and Rs. 7
lakh crore for housing finance companies, the report has said.
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