India eased rules for foreign investment in property development and construction, as Prime Minister Narendra Modi pushes ahead with his plan to boost economic growth, develop smart cities and build every citizen a home by 2019.
Real estate companies now need a minimum project-size of 20,000 square meters to invite overseas investors instead of the 50,000 square meters mandated earlier, India’s cabinet said late yesterday. A previous condition on the minimum size of plots for housing construction was removed. The cabinet also halved the paid-up capital requirement for projects to $5 million.
The decision follows Modi’s steps this month to scrap subsidies on diesel fuel and move toward ending a 40-year state monopoly on mining and selling coal. He swept to power in May on a campaign pledge to allow more overseas funding in sectors that create jobs and stimulate growth in Asia’s third-largest economy.
India has attracted foreign direct investment of $23.7 billion for the construction of houses and towns since April 2000, about 10 percent of total inflows. India conditionally permits overseas companies to fully own local units.
Finance Minister Arun Jaitley allocated 71 billion rupees ($1.2 billion) in his budget to modernize towns into “smart cities”. In August, Modi’s administration also raised the foreign investment cap in railway infrastructure and defence companies to 49 percent from 26 percent.
The cabinet on Tuesday also approved raising the minimum support price for wheat by 50 rupees to 1,450 rupees per 100 kilos. (Bloomberg)
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