Real Estate sector is the second largest employer in India and its size is close to US $ 12 billion and grows at about 30% per annum. Five per cent of the country’s GDP is contributed by the housing sector. In the next three or four or five years this contribution to the GDP is expected to rise to 6%.
Over the next 10 to 15 years, 80 to 90 million housing dwelling units will have to be constructed with a majority of them catering to middle and lower income groups. The investment required for constructing the houses and related infrastructure in this period would, thus, be to the order of US $ 666 billion at roughly US $ 33 billion to US $ 44 billion per year.
It is estimated that 42 million sq. ft. of space will be required every year till 2008, only in I.T. and I.T.-enabled services especially in the cities like Bangalore, Chennai, Hyderabad and Pune, which is also now gradually shifting to North India.
Townships, housing, built-up infrastructure and construction – development projects. The sector would include, but not be restricted to, housing, commercial premises, hotels, resorts, hospitals, educational institutions, recreational facilities, city and regional level infrastructure. 100% Foreign Direct Investment is allowed subject to the following guidelines :
(a) Minimum area to be developed under each project shall be as under :
In case of development of serviced housing plots – 10 hectares.
In case of construction – development project - 50,000 sq. mtrs.
In case of combination project, any one of the above two conditions.
b) The investment shall be subject to the following conditions :
(i) Minimum capitalization of US $ 10 Million for wholly owned subsidiaries and US $ 5 Million for joint ventures with Indian partners. The funds would have to be brought in within six months of commencement of business of the Company.
(ii) Original investment cannot be
repatriated before a period of three years from completion of minimum
capitalization.
However, the investor may be permitted to exit earlier with prior approval of the Government through the FIPB.
1) At least 50% of the project must be developed within a period of five years from the date of obtaining all statutory clearances. The investor shall not be permitted to sell undeveloped plots.
2) The project shall conform to the norms and standards, as laid down in the applicable building control regulations, bye-laws, rules, and other regulations of the State Government / Municipal / Local Body concerned.
3) The investor shall be responsible for obtaining all necessary approvals, including those of the building / layout plans, developing internal and peripheral areas and other infrastructure facilities, payment of development, external development and other charges and complying with all other requirements as prescribed under applicable rules / bye-laws / regulations of the State Government / Municipal / Local Body concerned.
4) The State Government / Municipal / Local Body concerned, which approves the building / development plans, shall monitor compliance of the above conditions by the developer.
Note: For the purpose of these guidelines, "undeveloped plots" will mean where roads, water supply, street lighting, drainage, sewerage, and other conveniences, as applicable under prescribed regulations, have not been made available. It will be necessary that the investor provides this infrastructure and obtains the completion certificate from the concerned local body / service agency before he would be allowed to dispose of serviced housing plots.