The government today issued guiding principle on big-ticket transforms to the foreign direct investment (FDI) norms that were decided by the Union Cabinet on January 30.
It, however, remained quiet on clarifying a change in rules for FDI in real estate, maybe due to fear of larger capital inflows.
The move to delink the FDI provisions from investments by foreign institutional investors (FII) in real estate under the portfolio investment scheme was predictable to lead to better stock market play in real estate scrips.
A press note could not be issued. An official told that it is not clear why the Cabinet has not cleared the proposal to de-link FDI and FII norms (in real estate).
Interestingly, on the day the Cabinet met to grant the changes, a plain-paper background note distributed by the government said the Cabinet had approved a explanation that FII investments would be distinct from FDI and be outside the purview of press note 2 (2005).The de-linking conditions were suggested by the DIPP.