HP Govt bats for FDI in Realty
The government of Himachal Pradesh has gone ahead in permitting Foreign Direct Investment (FDI) in real estate in the state. This move comes on the heels of the decision of the United Progressive Alliance to allow FDI in the housing sector. The Town and Country Planning and Urban Development Minister of Himachal Pradesh informed that this would facilitate development of new satellite townships near Shimla, Dharamsala, Hamirpur, Solan and Mandi. The development of these townships would be undertaken as a joint venture between the Himachal Pradesh Urban Development Authority (HIMUDA) and private players, who are yet to be identified, in the Public-Private-Partnership (PPP) mode. However, the cabinet is yet to give the go ahead with regards to FDI in real estate.
With most of these towns being overpopulated, there is hardly any scope for further expansion. Hence, the development of townships in these areas would enable to decongest these towns and put a check on illegal ankd improper constructions taking place in the peripheral areas of these towns. Besides, there are many pertinent issues that these towns are facing like water shortages and traffic snarls. With the development of townships through FDI in real estate, most of these issues can be taken care of effectively. Since development of townships requires huge investments, HIMUDA could not afford the expenses on its own. Hence, the possibility of FDI or PPP mode was explored. Eventually, it was decided that the FDI mode was more feasible as the responsibility of investing in large colonies in these five towns would rest considerably with foreign private players.
The exercise of identifying areas for the townships was initiated by the Urban Development Department and the Town and Country Planning Department.The townships are proposed to be set up in Shimla, Solan, Hamirpur, Una and Mandi districts. As revealed by the Urban DEvelopment Minister of Himachal Pradesh, the move by the government towards planned townships would put a check on the sprouting of apartments without basic amenities. Moreover, the townships will be planned in such a manner that they will provide facilities with focus on health, education and employment, besides other essential facilities that residents can enjoy. The HIMUDA will simply act as a facilitator in these projects and refrain from any active role. Exsiting water sources maintained by the government cannot be utilised for the projects with promoters having to develop thier own water sources
The previous BJP government which is not in favour of FDI had collected 72,000 applications for allotting plots/flats through HIMUDA since 2010. A deposit amount of Rs. 5,000 was collected along with each application which amounted to a total of about Rs. 36 crores. Inspite, they made no considerable effort to develop the townships, neither did they direct the HIMUDA to refund the collected amount. However, with the Congress coming to power in the state and the UPA government pushing for FDI in various sectors including realty, the likelihood of the township project getting back on track and seeing the light of day, is very bright.
