The reality show

T K Vineeth
18 May 2003

New Delhi: Unorganised, unrecognised, and where half the transactions go unreported. The Indian real estate industry has more negative adjectives attached to it than any other industry. This high order of anarchy was the insignia of the real estate sector till a few years ago.

Not any more.

For the past few years, especially since the Urban Land (Ceiling and Regulation) Act was repealed, there has been a systematic focus on the industry. While the ULCRA Repeal Act cleared the air, structural changes in legislations ushered in a new spirit of reforms to the industry.

One such promulgation was the decision to allow 100-per cent foreign direct investment (FDI) in real estate. This addressed one of the fundamental reasons that kept the Indian realty bogged down all these years — paucity of fund flow into the sector. One would be prompted to think that the FDI guidelines would have sent global players scrambling for space in Indian real estate. But this is not really happening.

What has happened is just hype. As the initial euphoria wore off, so did the interest of potential investors. Cent per cent FDI for developing integrated township was announced in 2001 and revised guidelines were issued in January 2002. But, so far, just one project has been cleared — a joint venture between Feedback Ventures Pvt Ltd and OCL India Ltd in collaboration with Kontur Bintang Sdn Bhd, incorporated in Malaysia, and Tan Sir G Gangalingam, a Malaysian citizen. With an estimated cost of Rs 748 crore, this project will develop a residential township in Gurgaon.