Real Estate Industry welcomes Government Move to Ease FDI Rules

India's real estate industry has welcomed the government's decision to relax FDI rules in construction sector, saying the move would help cash-starved developers raise significant amount of foreign funds and also complete the stuck projects.

Industry has praised Finance Minister for being so prompt in meeting the requirements of this industry in his budget announcement, then approval for Real Estate Investment Trusts (REITs) and now relaxation in FDI norm. Now huge amount of FDI inflow in this sector is expected after this easing of norms.This wouldhelp developers get an extra route of funding their projects. The easier FDI rules will help faster completion of projects delayed by a squeeze on funds due to elevated debt levels.

The sector's share in the total FDI has slipped from 5 per cent in the previous year to under 3 per cent as of the current fiscal until August. In fact, its share has been consistently falling over the last six years since 2009-10, when it stood at over 20 per cent. This would result in an increased M&A/PE investment in this space on account of lower risk/better returns on smaller projects. This would also result in better developments in urban centres where space has always been a constraint.

This move will help the builders to get the much needed funds to complete their projects in time, which were held up due to squeeze of funds in recent times.

Its a good news for the end users , as they can expect the delivery of their booked properties at the earliest !!!