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The Indian real estate market does have a major role in paving the path of the country's economy. In terms of employment generation, the real estate sector stands second to agriculture and has a major contribution towards the gross domestic product (GDP). Approximately 5% of India's GDP is contributed by the real estate sector. Next five years.The rapid pace of economic growth in Brazil, Russia, India and China (BRIC nations) will help the property markets soar high at a faster pace than the UK and US real estate markets. It is expected that the property sector in India would improve from the early 2010 and would gather US$ 12.11 billion in terms of real estate investment in the next five years would see this contribution level go up to 6%.
special treatment to the real estate sector, is surely going to impact the Indian real estate market in a positive manner.
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100% FDI is allowed in realty projects by the automatic route. In case of integrated townships, the minimum area that would be developed has come down from 100 acres to 25 acres. The minimum capital investment for wholly-owned subsidiaries and joint ventures is US$ 10 million and US$ 5 million, individually. The original investment is entirely liable to be repatriated after three years. 51% of FDI is allowed in single-brand retail outlets and 100% FDI in cash-and-carry outlets by the automatic route. The norms for developing special economic zones (SEZs) have been simplified for getting tax free benefits.
Developers, at present, would have their land being segmented as an SEZ right at the introductory stage of approval. This shall happen only if one submits the legal documents proving land ownership. The latest budget (2009-2010) also has provided various sops to the Indian real estate market. Developers have been given a tax holiday on profits arising from the projects that started backing 2007-08. All such projects should be complete prior to March 1, 2012. The potential of the Indian real estate market is huge. The norms and strategies by the Government are getting all the more relaxed only to give a fillip to this sector.