With the Centre relaxing rules for allowing FDI in the construction sector, including housing, by reducing the minimum built-up area and capital requirement for foreign investment in such projects, the real estate sector in Gurgaon has welcomed the move.

According to Navin Raheja, the chairman of National Real Estate Development Council (NAREDCO), the move has the potential to more than double FDI inflows into housing, commercial real estate, hotels and townships in the next one year.

"Private equity investors have been showing interest in investing, and liberalization of investment norms in construction and higher return on capital are expected to strengthen the growth of the Indian economy in the coming years on a sustainable basis," Raheja said.

Easing of norms to exit by foreign investors are expected to send the right signals for doing business here because of the investor-friendly regulatory practices in India. "Now, the real estate industry shall endeavor to invite FDI in developed areas for housing, commercial and retail projects particularly in the metropolitan cities and their satellite towns," said Raheja.

Similarly hailing the decision as a catalyst for the real estate sector that has been depressed for the last couple of years, Manoj Shrivastava, the chief operating officer of Homestead (Asia Pacific), said that this decision will also lead to the flow of funds to smaller towns and cities, thus, boosting local economies and creating new jobs across the country.

"The easier norms will help faster completion of projects delayed by a squeeze on funds due to elevated debt levels. The measure is also expected to result in creation of much-needed, low-cost affordable housing in the country and development of smart cities," Shrivastava said.

Pankaj Bansal, the director of M3M Group, said, "The new initiative of the government to relax FDI rules by allowing 100% foreign investment in the construction sector will transform the real estate scenario in the country like it did in 2005. The move allows foreign investment into projects spread over a small area with the minimum floor area requirement being reduced from 50,000 square metres to 20,000 square metres." He said that India attracted $1.2 billion of FDI in the fiscal year end upto March 31, 2014, while the previous year saw $1.3 billion worth of investment.

"A decent $446 million of foreign investment was seen between April and August this year. The concrete step taken by the government has given us new hopes and also raised the expectation," he added.