Realty players seek cut in township size criteria

Real estate developers are seeking a relaxation in the 100-acre minimum size requirement for foreign direct investment (FDI) in township projects to 25 acre or below.

Sanjay Verma, joint managing director, Cushman & Wakefield India, said, "Such projects anyway entail lumpsum investments in infrastructure creation and the minimum 100 acre size criterion limits financial viability."

Joy Sanyal, head consulting practice, Chesterton Meghraj, said, "Though FDI is allowed in real estate, no practical implementation has taken place due to impractical minimum capitalisation norm of Rs 100 crore and the minimum size norm of 100 acre. The industry strongly feels that this should be lowered to attract investments."

Sunil Mantri, secretary, Maharashtra Chamber of Housing Industry (MCHI), said: "The existing size limit of 100 acre for 100 per cent FDI investment in integrated townships is on the higher side and needs to be brought down as it is limiting the interest from foreign entities in the country."

The industry is also seeking modifications and clarifications to Section 80 IB (10), including deletion of the condition for commencement of projects before March 1, 2004, and extension of the time limit to 10 years.

Niranjan Hiranandani, managing director, Hiranandani Construction, said, "There should be a definite policy framed in order to harmonise infrastructure and real estate development."

Sanyal added, "There should be special incentives for developers to develop infrastructure in cities."

The industry is also seeking removal of Section 50 of the Income Tax Act.

Hiranandani said, "Section 50 C should be removed because this Section seeks to tax income which might have never been received and it only deals with stamp duty valuation by a state government. It is also silent on property in a Union territory."