Business Daily from THE HINDU group of publications
Saturday, Jul 11, 2009
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Business Daily from THE HINDU group of publications Saturday, Jul 11, 2009 ePaper | Mobile/PDA Version | Audio | Blogs |
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Industry & Economy
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Foreign Direct Investment Govt mulls easing of FDI norms for hotel, tourism projects Our Bureau New Delhi, July 10 To encourage foreign direct investment in the hospitality sector, the Government is considering a proposal to remove conditions pertaining to minimum area development and minimum capitalisation norms for mixed development projects in hotel and tourism space. A draft note for the same has been prepared by the Ministry of Commerce and Industry. It has been proposed that these conditions under Press Note 2 (2005) would not apply to such mixed use projects, if a minimum of 50 per cent of the built-up space is earmarked for hotel and tourism activities, including beach resorts, restaurants, and tourist complexes; and at least 20 per cent of the built-up space is used for development of hotel rooms.
The proposal was circulated in early 2008 and submitted for consideration by theCabinet Committee on Economic Affairs (CCEA) in September 2008. However, since the proposal was not taken up by the CCEA and given the time gap, it has now been re-drafted. At present, 100 per cent FDI is permitted in standalone hotel projects. Further, the Government is mulling making certain changes in the FDI policy for construction development to boost FDI inflows into smaller projects. It mulls reduction of minimum area to be developed from the present 25 acres to 10 acres for serviced housing plots and reduction in minimum built-up area for construction development projects to 10,000 sq metres (from the existing 50,000 square metres of built-up area). Sources said FDI flows into the construction development space would continue subject to lock-in period of three years. More Stories on : Foreign Direct Investment | Tourism | Hotels
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