New Delhi [India]: The Indian Real Estate sector witnessed significant improvement in 2017, with a total Foreign Direct Investment of USD 257 million, the Economic Survey 2017-18 noted.
The figures, which are double than that of last year, can be attributed to recent reforms and policies taken by the government, including the Pradhan Mantri Awas Yojana (PMAY), sanctioning over 3.1 million houses for the affordable housing segment in urban regions till November 2017.
Of this, about 1.6 million houses have been grounded and are at various stages of construction, and about 0.4 million houses have been built under the mission.
PPP policy for affordable housing is another measure that was announced in September 2017 for affordable housing segment to provide further impetus to the ambitious ‘Housing for all by 2022’ mission.
Credit Linked Subsidy Scheme (CLSS) under PMAY was extended to the Middle Income Group (MIG) segment, which got included in the scheme from January 2017.
Furthermore, with the enactment of Real Estate (Regulation & Development) Act, 2016, it is anticipated that accountability would lead to higher growth across the real estate value chain, while compulsory disclosures and registrations would ensure transparency.
On the tourism front, the survey noted that Foreign Tourist Arrivals (FTAs) saw a 9.7 percent growth to 8.8 million and Foreign Exchange Earnings (FEEs) at 8.8 percent to USD 22.9 billion in 2016.
FTAs during 2017 was 10.2 million, with a growth of 15.6 percent, while FEEs from tourism were USD 27.7 billion, with a growth of 20.8 percent over 2016.
Furthermore, domestic tourist visits grew by 12.7 percent to 1,614 million in 2016 from 1,432 million in 2015. Tamil Nadu, Uttar Pradesh, Andhra Pradesh, Madhya Pradesh and Karnataka were the top five destination states in 2016.
On the FDI front for the services sector, on the whole, equity inflows to the sector grew by 15 percent during 2017-18 (April-October), largely due to a number of reforms such as the National Intellectual Property Rights (IPR) policy, implementation of GST, reforms for ease of doing business.
The survey noted that the scale of reforms can be gauged from the fact that during this period, 25 sectors, including services activities and covering 100 areas of FDI policy, have undergone reforms.
FDI policy provisions were radically overhauled across sectors such as construction development, broadcasting, retail trading, air transport, insurance, and pension.
At present, more than 90 percent of FDI inflows is through automatic route.
After the successful implementation of the e-filing and online processing of FDI application by the Foreign Investment Promotion Board (FIPB), the government announced to phase out the FIPB in the Union Budget 2017-18.
Recently, the Union Cabinet approved amendments in FDI policy allowing 100 per cent FDI under automatic route for Single Brand Retail Trading. Foreign airlines also have been allowed to invest up to 49 percent in Air India, the survey noted.
While there is ambiguity in the classification of FDI in services, it is the combined FDI share of the top 10 service sectors such as financial and non-financial services falling under the Department of Industrial Policy and Promotion (DIPP)’s service sector definition; as well as telecommunications; trading; computer hardware and software; construction; hotels and tourism; hospital and diagnostic centers; consultancy services; sea transport; and information and broadcasting that can be taken as the best estimate of services FDI.
However, these could include some non-service elements. The share of these services is 56.6 percent of the cumulative FDI equity inflows during the period April 2000-October 2017 and 65.8 percent of FDI equity inflows during 2017-18 (April-October).
In 2016-17, FDI equity inflows to the services sector (top 10 sectors including construction) declined by 0.9 percent to USD 26.4 billion, though the overall FDI equity inflows grew by 8.7 percent. However, during 2017-18 (April-October), the FDI equity inflows to these services sector grew by 15.0 percent, as compared to 0.8per cent growth in total FDI equity inflows, mainly due to higher FDI in two sectors- telecommunications, and computer software and hardware, the survey said. (ANI)