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NEW DELHI, NOV 13: Union minister for urban affairs and employment, Ram Jethmalani, on Friday said that a proposal allowing 100 per cent foreign direct investment in the housing sector with a lock-in period of three years has been mooted by the government.
Addressing a concurrent session on `Infrastructure, housing and real estate' at the Global Indian Entrepreneurs conference, Jethmalani said the lock-in period has been inserted in the proposal to ensure that the investment is not withdrawn half way.
"The draft of the proposal will be placed before the next meeting of the Cabinet for its approval," Jethmalani said.
He assured non-resident Indians that after the lock-in period, their profits could be repatriated and that the rate of return would be higher.
The minister said the Urban Land Ceiling (Regulation) Act would be repealed by Parliament during the winter session beginning November 30 to remove bottlenecks in ensuring larger supply of land and thereby encourage housing activities.
He saidthough the government wanted to repeal the Act through an ordinance, it had to wait in view of the Election Commission's directive not to go ahead with any populist measure before the assembly elections later this month.
The government also intends to give more tax concessions in the housing sector in the next annual Budget to attract more investments, particularly from the private sector, he said. Referring to the increasing demand for housing in the country, estimated at 33 million and requiring Rs 1,50,000 crore outlay, Jethmalani said the target was "mind-boggling".
He said in order to meet the target of building two million dwelling units a year, considerable investment was required from the private sector.
In this regard, the minister said 90 per cent of whatever the government had promised to the private sector had been implemented and assured the delegates that the rest would be taken care of very shortly.
Jethmalani said the ministry had suggested a number of fiscal measures in the nextannual budget to bring dynamism in the housing sector.
Prominent among them were giving more excise concession on building material like bringing down rate of duty and lowering customs duty on import of machinery for housing purposes.
He said the government would consider a suggestion made by a leading builder that foreign exchange earned by them in selling real estate to foreigners should be made tax free.
Jethmalani said the government was also considering use of latest techniques like pre-fabricated housing technology to revolutionise the concept of housing in India.
Hudco chairman V Suresh said that the housing sector would only get leverage if investment opportunities are opened up in areas like sanitation, public health, bypass, water supply, solid waste disposal requiring huge investment.
The joint secretary in the power ministry, Anil Razdan, said the government is evolving a national grid whereby the power surplus north-eastern sector would be linked to the Northern and Southern sector.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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