IMPACT OF GLOBAL FINANCIAL CRISIS ON FDI FLOWS IN INDIA A SPECIAL REFERENCE TO HOUSING SECTOR

-BY VISHAL KUMAR GARG K.RAO PRASHANT JYOTY

--FOREIGN DIRECT INVESTMENT

Foreign direct investment (FDI) or foreign investment refers to the net inflows of investment to acquire a lasting management interest (10 percent or more of voting stock) in an enterprise operating in an economy other than that of the investor.

--REAL ESTATE SECTOR IN INDIA

In India after agriculture, the real estate sector is the second largest industry. Indian real estate has huge potential demand in almost every sector especially commercial, residential, retail, and industrial, hospitality, healthcare etc... In India the population density is 995 people per square kilometer.

Advantages of FDIs in India in Real Estate sector:

Employment opportunity.
Technology advancement. Better infrastructural facilities. Efficiency in funds management in India.

Disadvantages of FDIs:

Frame work of policy and strategies.

Takeovers and acquisitions. Inflation.

FDI scheme for Real Estate sector in India :

In 2002 Indian government allowed 100 % FDI investment in a real estate project with criteria of minimum 100 acres of land project.
In 2005 an emphasis was laid in real estate sector and government relaxed these rules with criteria of :

* 25 acres for development of serviced housing plots. * 50,000 sq km for construction development project.

FDI FLOW IN INDIA IN REAL ESTATE SECTOR:

In 2011 1st and 2nd qrt 2875

In 2005-06 171

In 2010-11 7,870

In 2006-07 2,121

In crores

In 200910 13,586

In 200708 8,749

In 2008-09 12,621

GDP Rates in India:

FDI Inflows in Housing in Comparison with Other Sectors:

Top 10 Countries investing in India:

CONCLUSION:
India has witnessed a steady growth in the economy with the FDIs inflows. Interestingly, given the booming property market across the country FDIs are not confined to metros and big cities alone. Thus since 2005, various real estate projects have been given a green signal by RBIs. But certain factors such as the economic conditions of the developing economies in the world are putting pressures on the recovery of FDIs flows. The policy for FDIs has changed overtime with the changing requirements. Indias share in the global FDIs regime is still minuscule which needs further liberalization in the policies.