The government today announced the guidelines for allowing 100 per cent foreign direct investment (FDI) in the development of integrated townships and regional urban infrastructure facilities.
According to the guidelines, a company would have to develop a minimum of 100 acres for which the norms and standards are to be followed as per the local bylaws and rules. In the absence of such bylaws, the investor will have to develop a minimum of 2,000 dwelling units for a population of about 10,000.
The government has fixed a minimum capitalisation norm of $10 million for a wholly-owned subsidiary and $5 million for joint-ventures with an Indian partner. The investor would be required to bring in funds upfront.
A minimum lock-in period of three years from the completion of the minimum capitalisation shall apply before the repatriation of the original investment is permitted, the guidelines said.
A minimum of 50 per cent of the integrated project development must be completed within a period of five years from the date of possession of the first piece of land, the guidelines said. In cases, where the investor intends to exit earlier due to reasons beyond his control, the Foreign Investment Promotion Board (FIPB) will take a decision on a case-to-case basis.
The investing foreign company should achieve clear milestones once its proposal has been approved, the guidelines specified and added the development of land and the allied infrastructure would form an integral part of the township's development.
While the development of an integrated township would include housing, commercial premises, hotels, resorts and city, the urban infrastructure facilities would comprise roads and bridges, mass rapid transit systems and manufacture of building materials.
The foreign company intending to invest should be registered as an Indian company under the Companies Act, 1956, and will then be allowed to take up land assembly and its development as a part of the integrated township development.
All the cases would be processed by the FIPB on the recommendations of the ministry of urban development and poverty alleviation and other concerned ministries. The ministry of urban development and poverty alleviation will develop an exclusive cell to deal with such cases. The core business of the company seeking to make investment should be integrated township development with a record of successful execution of such projects elsewhere, the guidelines said.
It has been specified that the land with assembled area for peripheral services such as police stations, milk booths would be handed over free of cost to the concerned agency.
The developer will retain the land for community services including schools, shopping complex, community centres, ration shops and hospitals. These services will be arranged by the developer himself and shall be made operational before the houses are occupied. The guidelines stipulated that the developer, after properly developing playgrounds and parks, would make them available to the local authorities free of cost.
