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| Image Credit: www.moneycontrol.com |
India’s $2 trillion economy has been thirsting for
more foreign direct investment across several sectors. For many global fund
managers and institutional investors, being part of growth for an economy that
is growing at over 7 per cent is a mouthwatering opportunity.
Since several areas of
infrastructure have not matched the pace of growth for India, there is a strong
need for a policy that can drive the pace of infrastructure growth. That
includes the growth in the real estate sector, which could, in turn, stoke
growth across consumer goods industries.
Foreign Direct Investment
(FDI) in India is only permitted in construction
and development activity. Hence, there are scores of
examples of investors having bought equity stake in projects that are at
different stages of construction. Global investors perhaps are a little
apprehensive of the complex rules regarding real estate and hence do not want
to take a risk.
But to get more capital
there are some fundamental changes in approach that may be needed. Investors
are looking for security and a certainty about Government policies while promoters
are looking for partnerships, liquidity and the best returns.
Government policy therefore
needs to marry the two with the interest of the real estate sector and the
buyers.
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