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.