New Delhi, March 4
AFTER allowing 100 per cent FDI in housing and construction through the automatic route, the Government on Friday issued detailed guidelines for such investments along with the timeframe within which such projects have to be completed.
The Department of Industrial Policy and Promotion (DIPP), in a press note, has stated that at least 50 per cent of the project must be developed within a period of five years from the date of obtaining all statutory clearances.
It has also stipulated that the minimum area to be developed in case of serviced housing plots should be 10 hectares.
In case of construction development projects, the minimum built-up area will have to be 50,000 sq m.
In case of combined projects, the investor will have to meet any one of these two specifications.
The foreign investor will be free to decide whether the investments would be through a joint venture company or through a wholly owned subsidiary.
In the case of a wholly owned subsidiary, the foreign investor will have to bring in a minimum capital of $10 million.
In case of joint ventures with an Indian partner, the minimum amount of capital would be $5 million.
The guidelines further stipulate that the funds would have to be brought in within six months of commencement of business and original investment cannot be repatriated before a period of three years from completion of minimum capitalisation.
However, the investor may be permitted to exit earlier with prior approval of the Government or through the Foreign Investment Promotion Board (FIPB).
The investor would also not be permitted to sell undeveloped plots.
As per the 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.
The investor must necessarily provide such infrastructural facilities and would need to obtain completion certificates from the local body/service agency concerned before being allowed to dispose of serviced housing plots.
The guidelines further state that all projects being undertaken by the foreign investors should conform to the norms and standards, including land use requirements and provision of community amenities and common facilities, as laid down in the applicable building control regulations, bye-laws, rules, and other regulations of the State Government or municipal or local body concerned.
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, and payment of development, external development and other charges.
The investor shall also comply with all other requirements as prescribed under applicable rules or by-laws or regulations of the State Government or municipal or local body concerned.
These local authorities would monitor that the investor is complying with all the conditions laid down by the Government.