Real Estate market gets boost with allocation of Rs. 7060 Crore for development of 100 smart cities
Real estate is an integral part of the emerging markets’ growth phenomenon. In India, for example, real estate has played a large part in driving economic growth.
In the 2014-15 Budget Session, the Finance Minister of India Mr. Arun Jaitely is allotted the 7,060 Crores of Rupees for the 100 Smart Cities. The Indian Prime Minister Mr. Narendra Modi is going to develop the 100 Smart Cities as Satellite Towns of Larger Cities by modernizing the present Cities.
By allocating money exclusively for smart city projects, the Centre will therefore be able to gently nudge the more entrepreneurial of cities while convincing the late adopters that smart technology is worth it.
Industry experts say that the government should be efficient in granting real estate project approvals, ensure the activation of the regulation and development bill, provide connectivity and infrastructure development in the country etc. At present, the challenge is to develop the Tier II and Tier III cities equivalent to metro cities. Due to the increasing migration from rural to urban cities, there is a need for the creation of new smarter cities which will serve the housing needs of thousands of families and also boost the employment options. According to sources, there is a plan of creating some 25 cities aligned to the development of Delhi Mumbai Industrial corridor and these cities will have industrial estates, power plants, residential colonies and other related facilities.
"To encourage development of smart cities, requirement of the built-up area and capital conditions for FDI is being reduced from 50,000 square metres to 20,000 square metres and from $10 million to $5 million, respectively with a three year post completion lock in," the Minister said.
He added that projects committing at least 30 per cent of the total project cost for low cost affordable housing, will be exempted from minimum built up area and capitalisation requirements, with the condition of three year lock-in.