Commerce and Industry Minister Kamal Nath will soon unveil the guidelines for foreign direct investment (FDI) in the construction sector, following a go ahead Thursday from the Cabinet Committee on Economic Affairs.

"The cabinet discussed the issue of foreign direct investment in the construction sector. We will issue the guidelines shortly," Kamal Nath said after the meeting chaired by Prime Minister Manmohan Singh.

He declined to dwell further into the issue.

The guidelines, among other issues, will lay down the eligibility criteria for foreign investors, the extent of foreign equity to be permitted and the minimum area for development by the prospective investors, officials said.

The issue of foreign equity in construction was also discussed during a meeting of the Cabinet Committee on Economic Affairs Feb 17 but a decision was deferred in view of the assembly elections in Bihar and Jharkhand.

Commerce ministry officials said that in their proposal they had left it for the cabinet to decide on the extent of foreign investment in the construction sector - whether 51 percent or 100 percent.

The proposal, they said, laid emphasis on incremental construction activity, rather than on acquisition of land.

The government currently permits 100 percent foreign investment in real estate for the construction of integrated townships, commercial complexes and resorts with a minimum area of 100 acres and a capital base of $10 million.

Both Urban Development Minister Ghulam Nabi Azad and Kamal Nath have indicated in the past that they favour relaxation in the minimum area of 100 acres for foreign investment in construction.

"I want to take a holistic approach on the issue of inviting foreign investment in construction and related areas," Kamal Nath had told reporters on the margins of an industry seminar here Tuesday.

"I would not like to term the development of housing and integrated townships as real estate. It just means acquisition of land. We want money for incremental construction and creation of economic activity," the minister had said.

"It will generate employment, rejuvenate industrial sectors like cement and steel, add to our housing stock and improve infrastructure like roads, mass rapid transport system, electricity, water supply and solid waste management."