According to
newspaper reports, Indian enterprises, during the course of last few years,
have accessed significant amounts of foreign debt. In 2011-12, Indian companies
raised a borrowing of about US$ 36 billion. Further, borrowings in September 2012
were recorded to be US$ 2.78 billion. According to the Reserve Bank of India
(RBI) data, most of the borrowings were for import of capital goods, modernization,
new projects and rupee expenditure for import of capital goods. Foreign
investment has been one of the major sources to boost real estate sector in
India. Foreign investments comprises of investment in capital and investment through borrowings which can be through Foreign
Direct Investment (FDI) or External Commercial Borrowings (ECBs) which is
governed by government.
Keeping in view the need of the
time and desire to invest in housing there has been an announcement by the
Finance Minister in the Union Budget 2012-13, the Government of India, under the
process of reviewing and liberalizing the policy related to ECB and to meet the
objective of providing housing for low income groups, allowed ECB for low cost
affordable housing projects. Affordability being the keyword of the real estate
sector this year has been a focus of government and other non- profit
organizations who are working to promote the concept among the builders.
Real estate body CREDAI is
organising a two-day Conclave on “Housing, the game changer-leading to
double-digit GDP growth,” in New Delhi during December 13-14. The event, being
hosted in the backdrop of general economic slowdown, pressure on real estate
sector and tough environment to raise funds for new projects and high interest
rates, seeks to finds ways to gain momentum contributing to the growth of the
economy by all means.
Propelled by the rapid
urbanization, the urban population is poised to grow to 590 million by 2030.
McKinsey Global Institute reports that the urban India, over the next 15 years,
is expected to create 70 percent of all new jobs and these new jobs are going
to be twice as productive as equivalent jobs in rural sector.
CREDAI has impressed upon the
government authorities to cut down the delays and institute “Single-window and
Online Approval System”. The elimination of delays in sanctioning will
drastically reduce the costs of house-construction and speed up the
construction activity with substantial economic benefits. This is another the CONCLAVE
will address.
The CREDAI holds the view that
this Sector, being the primary driver of
the economy can fast forward the economic revival, provided the government
wakes up to the unfolding potential of the Sector and takes necessary policy
initiatives. The government has however initiated several policy moves in the
form of Real Estate Regulatory Authority, Land Acquisition Bill, Real Estate
Investment Trust, Affordable Housing policy. But these policies are not without
any inadequacies in their nature and character. The CREDAI has been proposing
to incorporate several changes in some of the policy initiatives of the
government and plans to address them in this Conference.
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