Press Information Bureau

Government of India

Ministry of Commerce & Industry

30-November-2011 12:05 IST

As per extant Direct Investment (FDI) policy, as contained in ‘Circular 2 of 2011-Consolidated FDI Policy’, FDI, upto 100% is allowed under the automatic route, in ‘Construction development: Township, Housing Built-up infrastructure’, subject to compliance with the conditions of minimum area, minimum capitalization, lock-in period etc. These conditionalties are not applicable to FDI in Hotels & Tourism, Hospitals, Special Economic Zones (SEZs), Education Sector, Old age Homes and investment by NRIs. This dispensation has been extended to the ‘Education Sector’ and ‘Old age Homes’ effective from 01.01.2011.

These steps have been taken to augment the educational infrastructure in the country and bring it up to global standards. Similarly, with growing urbanisation, there is an increasing demand for old-age homes to cater to the needs of senior citizens. The physical infrastructure in this area also is short of the requirements. Hence, it has also been decided to exempt old-age homes also from the general conditionalities applicable to the construction development sector.

This information was given by Shri Jyotiraditya M. Scindia, Minister of State for Commerce and Industry in written reply to a question in the Rajya Sabha today.

DS/GK

FDI conditionality exemptions: construction development conditions waived for education and old-age homes, expanding automatic route access. The policy confirms FDI up to 100% under the automatic route in construction development is subject to conditionalities such as minimum area, minimum capitalization and a lock-in period, but those conditionalities are exempted for hotels and tourism, hospitals, SEZs and NRIs. The Government has extended that exemption to the Education Sector and Old age Homes, removing the general conditionalities (including the lock-in period) for these categories to facilitate infrastructure development.