Developers in the realty sector, which is facing severe credit crunch due to higher interest rates, expect the government to relax norms for repatriation of FDI and external commercial borrowings (ECBs) in the forthcoming Budget for 2012-13.
"The real estate sector has witnessed rapid growth in the recent past. However, raising funds continues to be a big constraint for us. We expect some policy decision on FDI in real estate that will benefit the market greatly," Puranik Builders Managing Director Shailesh Puranik said.
The industry expects the Budget, to be announced on March 16, to relax norms for FDI and ECBs, especially for township projects that will give developers source funds at a much reasonable cost.
Currently, it is not possible for foreign investors to repatriate real estate investment proceeds for three years, which is hampering investment flows, Jone Lang LaSalle Chairman and Country Head Anuj Puri said.
"Relaxing norms for repatriation of realty FDI is the need of the hour. The market environment needs to be rendered more investment-friendly," he said.
Besides this, the sector is hoping to get industry status as it is a major driver for economic growth and generates jobs across various verticals.
"The real estate sector is the second largest employer contributing 5% to the GDP and generating large-scale jobs across its varied verticals.
"The sector should be given an industry status that will enable developers to have access to debt lending at competitive rates from banks and financial institutions," said Sunteck Realty Chairman and Managing Director Kamal Khetan.
Realty players are also expecting sops for affordable housing and want it to be given priority in lending in order to address the acute housing shortage.