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- I think the government gets into dilemma when it comes to the real estate sector. Over the past few weeks it has sought to systematically choke external fund flow to this sector. The budget restricted benefits of venture capital investments to nine sectors which many people think was aimed at the real estate sector.
Earlier this month the finance ministry said that preference shares issued to foreign investors ought to be treated as debt. A few days ago the government removed integrated townships from the list of sectors eligible to garner funds through external commercial borrowings (ECB).
The only long-term solution to the property bubble is to increase supply. If India is to urbanise at a rapid pace it needs flourishing real estate companies.CommentQuote0Flag