The union
government’s budget 2014-15 announced to relax norms for foreign direct
investment (FDI) in the real estate sector. It will give a huge boost to
housing projects in the temple city Bhubaneswar.
The
centre eased criteria for FDI by reducing the minimum size / area of the
projects from 50,000 square metres to 20,000 square metres and investment
amount at least US$10 million to US$5 million.
The temple
city Bhubaneswar has a potential real estate market as an alternative to Kolkata
in Eastern India and because of big industrial projects like POSCO within a
radius of 200 kilo metres. But in Bhubaneswar, real estate is facing funds
crunch. Most of the projects are not eligible for FDI with small sizes. The changed
norms would ensure many projects said D. Tripathy, Joint Secretary of the
Credai (Confederation of Real Estate Developers Association of India).
The
changed criteria would help the capital city Bhubaneswar as well as other tier II and tier III cities.
Due to
relaxed norms, many non-resident Odias would invest and some of the pending
projects would progress at slow pace due to fund crunch said Umesh Patnaik,
President, Association for Odisha Real Estate Developers.
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