Context

 Recently, the government has widened the meaning of the Real estate business under its FDI policy.

Key points

• As per the definition under DPIIT(Department of promotion of industry and internal trade) of real estate business, it includes dealing in land and immovable property with an objective of earning a profit therefrom and does not include development of townships, construction of residential or commercial buildings, roads or bridges, educational institutions, recreational facilities, city, and regional level infrastructure, township.
• As per the rule,100% FDI is allowed under the automatic route in construction development townships, housing, built-up infrastructure.
• FDI policy prohibited FDI in the Real estate business and construction of farmhouses and trading in transferable development rights.
• Also earning of rent or income on lease of property, not amounting to transfer will not amount to real estate business.

What is FDI (Foreign direct investment)?

• FDI is the investment by a company in the company or the market of the another country. The investment may involve acquiring foreign business assets, establishing ownership, or controlling interest in a foreign country.
• FDI benefited a country not with money but also with skills, technology, and knowledge. FDI commonly get an easy route in open economies that have skilled workforce and growth prospect.
• The US ranked second to China in attracting FDI in the year 2020.
• India ranked 5th largest recipient of FDI inflows in the world as per the UNCTAD report in 2020.
• In 2021 India stayed out of Kearney's FDI confidence index as per the global consultancy firm report.
• Kearney FDI confidence index surveys annually the global business executives and ranks the markets likely to attract the most investment in the next three years.