The Hindu : National : Proposal on FDI hike in real estate deferred

Online edition of India's National Newspaper
Friday, Feb 18, 2005

National

National

Proposal on FDI hike in real estate deferred

By Our Special Correspondent

NEW DELHI, FEB. 17. Real estate developers will have to wait a while, but they will certainly have something to cheer about once the Assembly polls are out of the way.

Although the Centre is keen on easing the norms for the inflow of foreign direct investment (FDI) into construction and real estate development, the Union Cabinet, at its meeting here today, deferred its decision, ostensibly on the grounds of the ongoing elections in Bihar and Jharkhand.

"The proposal has been deferred due to the ongoing elections in Bihar and Jharkhand," the Minister for Commerce and Industry, Kamal Nath, said.

The proposal to relax the guidelines for FDI was aimed at scaling down the 100-acre norm, which was applicable only for integrated townships.

Owing to the lukewarm response of foreign investors to the existing offer despite the 100 per cent FDI facility, the Centre's move is to extend the same to even 25-acre plots to suit the requirement of office accommodation space of 50,000 square feet and above.

This stems from the view that the new approach would give a boost to the development of infrastructure in urban towns and metros and thereby provide greater avenues of employment.

Electrification scheme

The Cabinet Committee on Economic Affairs (CCEA), meanwhile, approved a new electrification programme to expedite the process of creating power infrastructure in villages and to help in fructifying the minimum electrification plan for the rural areas.

Coming close on the heels of the National Electricity Policy, the new programme, to be known as the `Scheme of rural electricity infrastructure and household electrification,' replaces the accelerated rural power development programme of energising one lakh villages and one crore households while merging with it the minimum needs programme of consuming one unit (kWh) daily by each household.

Under the new scheme, projects aimed at creating rural power infrastructure by way of sub-stations and decentralised distribution systems are to be financed with 90 per cent capital subsidy while 100 per cent subsidy would be provided for single-point connections to below the poverty line households.

Infrastructure for CBEC

The CCEA also cleared a proposal for creating a consolidated computing infrastructure for customs, central excise and service tax at an estimated cost of Rs. 167.05 crores.

The establishment of central servers and storage area networks with connections to all central excise offices is expected to result in better services to trade and industry and better infrastructure for the Central Board of Excise and Customs.

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