The Hindu Business Line : `Govt considering FDI in construction sector'

THE Government is examining the question of permitting Foreign Direct Investment (FDI) in the construction sector and is holding wide-ranging consultations with various stakeholders.

"We are reviewing what is the best for FDI in the construction sector. I will not use the term real estate as that means land, which in turn, may mean speculation. I am consulting people. This issue needs widespread consultations," Mr Kamal Nath, Minister for Commerce and Industry, said at a national conference on "Urban Poverty Alleviation through sustainable livelihood," organised by the CII here.

He said the move was aimed to speed up development and generate employment but declined to divulge a timeframe for finalising the new norms.

Mr Nath's comments come in the wake of reports that he favours 100 per cent FDI in construction of commercial properties such as shopping malls and hotels.

Currently, 100 per cent FDI is permitted in integrated townships, although the real estate industry has long been demanding foreign investment in all types of realty projects. The industry is also seeking relaxation of the 100-acre norm for integrated townships.

Welcoming Mr Nath's comments on FDI in the construction sector, Mr Anshuman Magazine, Managing Director (South Asia), CB Richard Ellis, said: "It is a step in the right direction. It is heartening to see that India is all set to compete with other countries in attracting FDI. Once FDI is permitted, a part of the investment will also flow into low-cost housing."

Mr Magazine said that allowing FDI in the construction sector would not only augur well for Indian economy but also provide employment opportunities.

Speaking on the occasion, the Minister of State (Independent Charge), for Urban Employment and Poverty Alleviation, Ms Selja, emphasised public-private partnership to address the issue of urban poverty and urban infrastructure development. She said the Government was setting up a National Mission for integrated development of urban slums.

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