by admin | May 25, 2021 | Opinions
By Vinod Behl,
The year 2017 could well go down as one of the most painful for the bruised real estate and housing sector, reeling under the short-term disruptive impact of a series of reforms. But then, riding high on these landmark reforms, the regulated and organised realty is set to ride out the rough terrain to emerge as a healthy and sustainable asset class in the medium to long run.
The agony of the real estate sector was particularly reflected in the worst-hit residential real estate. The long delays in completing projects and large-scale delivery defaults badly shattered the confidence and trust of home buyers, who were at war with developers and fighting it out in the courts — which saw a few developers landing in jail.
In the wake of all this, home buyers took a back seat, especially refraining from buying under-construction housing units and thereby badly hitting sales. According to industry statistics, there were about 685,000 unsold units across seven major cities till September this year. The high unsold inventory, together with the burden of complying with RERA (Real Estate Regulatory Act) led to a big slump in the launch of new units, though home buyers did pick up ready-to-move dwelling units as they were assured of the safety of their investment.
In view of RERA squeezing funds for residential properties, many developers took to commercial real estate, especially as investors preferred this segment due to better capital appreciation and good returns, particularly in pre-leased properties. Investors also showed keen interest in the retail sector, with national and international brands entering into newer destinations in search of organised mall space. Global PE fund Blackstone invested in a number of malls. Total retail supply, retailers’ expansion plans and investments indicate healthy retail growth in emerging cities.
Despite being a year of hardships, 2017 may well be termed as the year of reforms aimed at removing regulatory hurdles and paving the way for the sector’s growth. These progressive policies brought in transparency, which was reflected in the substantial improvement in India’s rankings in JLL’s Global Real Estate Transparency Index. Major structural reforms and changes in FDI norms made Indian real estate much more attractive to domestic and foreign investors, with a 70 per cent increase in FDI in construction as a percentage of the total FDI over last three years.
The landmark RERA reform empowered and protected consumers against cheating by unscrupulous property developers. Several of its stringent provisions are not only deterrent but punitive in nature to ensure a fair deal to consumers in terms of price, quality and timely delivery of property — besides fast-track redressal of their grievances.
Home buyers got a further protective umbrella with the Mumbai High Court ruling that RERA will be applicable to ongoing projects as envisaged in the model Central Act, nullifying the dilution of some provisions by a few states and in turn protecting the interests of home buyers.
Besides RERA, another big reform that was undertaken this year was the Goods and Services Tax (GST). Currently applicable to under-construction properties, it is aimed at doing away with multiple taxes and checking double taxation, resulting in the benefit of cost reduction which developers are required to pass on to consumers.
To give full benefit of GST to consumers, the government is now extending it beyond the construction stage to final constructed buildings.
The Benami Property Act, aided by demonetisation, together with restrictions on cash transactions, to a large extent rid real estate of black money (responsible for the artificial spurt in prices), making property more affordable. In fact, all the government’s policies — such as according infrastructure status to affordable housing and PPPs for affordable housing — were all directed at promoting this mass segment to achieve the aim of “Housing for All”.
The Housing and Urban Affairs Ministry approved the construction of 112,000 additional affordable houses for the urban poor over and above the 3,076,000 houses sanctioned earlier. That affordable housing was the flavour of the season was clearly evident from the fact that 62 per cent of all new launches in H1 2017 were in the affordable category (less than Rs 4 million price tag), with the trend of “compact homes” catching up.
This year’s budget further provided a booster to the sector. Granting infrastructure status to affordable housing and abolition of the FIPB requirement were significant policy initiatives to help the capital-starved sector.
The other notable measures included provision of additional refinance of Rs 20,000 crore (over $3 billion) for the National Housing Bank (NHB), hike in housing outlay from Rs 15,000 crore to Rs 23,000 crore and allocation of Rs 396,000 crore for infrastructure development.
The pro-consumer budget took several other far-reaching initiatives, including increase in personal income tax limit with additional benefit in tax slabs, long-term capital gains tax benefits on housing, enhancing the scope of the Credit-Linked Subsidy Scheme (CLSS) under the Pradhan Mantri Awas Yojana (PMAY) by extending the loan tenure from 15 to 20 years and replacing built-up area with carpet area as qualifying criteria for benefits of the PMAY scheme. This scheme has now been further extended beyond the EWS/LIG segment to include the MIG segment.
Spurred by the positive sentiment generated by continuous structural reforms, expected improvement in the economic and employment scenario and tapering off of the disruptive impact of RERA and GST, in the months ahead, the real estate and housing sector is headed for consolidation, with a new eco-system marked by transparency and corporate governance.
(Vinod Behl is editor, Realty Plus, a leading real estate monthly. The views expressed are personal. He can be reached at vbehl2008@gmail.com)
—IANS
by admin | May 25, 2021 | Business, Corporate, Corporate Buzz, Corporate Governance, Economy, Large Enterprise, Markets, News
By Aparajita Gupta,
New Delhi : It was a year of turmoil for the hyper-competitive Indian telecom sector as the balance-sheets of many major players kept bleeding, prompting the government to form an panel to chalk out plans to bail out firms.
Reliance Industries’ Jio continued to disrupt the market with its free or low-priced offers while three or four majors fought for the telecom pie tooth and nail. Despite assurances to the sector, the central government’s policy did not help: the Goods and Services Tax (GST) hiked the tax on the sector from 15 per cent to 18 per cent.
Also, the Telecom Regulator Authority of India (TRAI) reduced the Interconnection Usage Charges (IUC) to 6 paise from 14 paise per minute from October 1, 2017, putting additional pressure on the incumbents.
However, a few mergers and acquisitions in the sector sparked hopes of a better tomorrow as consolidation would help the majors to cope with challenges better, even as the cumulative debt of telcos rose to around Rs 4.6 lakh crore and the revenues fell. The sector’s adjusted gross revenue fell to Rs 30,759 crore for the quarter ending September 2017 — a year-on-year decrease of 18.1 per cent.
“This is a consequence of a number of developments over the years, including the entry of new operators in 2009 and the voice tariff war. This was followed by expensive auctions for spectrum (2016), needed by the telcos to offer communications services,” Rajan S. Mathews, Director General, Cellular Operators’ Association of India (COAI), told IANS.
“In 2018, consolidation in the sector is likely to take shape and the telcos will get the benefit of synergy in operations and the overall costs are likely to come down. Eventually, pricing power could also return, enabling longer-term sustainability overall,” he added.
However, Mahesh Uppal, Director of consultancy firm Com First, feels competition from Reliance Jio would continue to hurt margins of the incumbents.
“With Jio guaranteeing free calls to its subscribers, other players will find it difficult to sustain revenues from voice calls. They will be forced to do the same. They will then compete aggressively in the market for data services, especially by providing larger data packs at even cheaper prices. It is not clear whether players will compete more vigorously on quality of service. This might take more time,” Uppal told IANS.
But Amresh Nandan, Research Director, Gartner, said Jio’s disruption with free voice and data offers would eventually subside and become normal.
“Beyond a point, quality and reliability of service matter most. As that takes centre-stage, which has started to happen, free or even discounted services won’t help. If Jio comes up with products beyond connectivity — that enables greater interaction and transactions for consumers with necessary quality and reliability, then the competitive scenario may change,” he said.
Talking about mergers and acquisitions, Uppal said the sector was in the process of reaching an optimal number of players. “I expect the eventual survivors to be Airtel, Jio, the combination of Idea and Vodafone and the government-owned MTNL-BSNL,” Uppal said.
Nandan said mergers and acquisitions were good for the market from the economic perspective.
“Four telcos are dominant in the market and it should lead to a better scenario. However, real value from these deals will take time. These M&As are yet to reach operational culmination, which in itself will shake-up things a bit more,” he added.
“As far as consolidation is concerned, no market in the world has more than five telecom operators, but in India, there were more than 10. In 2018, the Bharti Airtel-Tata Teleservices-Telenor combine and the Idea Cellular-Vodafone combine would take shape,” said Mathews.
The country saw almost 40 per cent jump in 10 months in the number of wireless broadband users from 217.95 million at the end of December 2016 to 322.18 million users at the end of October 2017.
The regulator also came up with recommendations on net neutrality during the year, largely in agreement with suggestions made by the industry on “no blocking, no throttling, no fast lanes”, while allowing reasonable traffic management.
However, according to Mathews, the industry was disappointed that the authority did not adopt their recommendation “to have a wider approach to net neutrality, where issues of OTT (over-the-top) players, definition of net neutrality to include issues around connecting the next one billion unconnected users and national development priorities.”
The industry is now awaiting norms for in-flight connectivity, which is scheduled to come from the regulator by the year end.
The highlights of the year were:
** Announcement of merger of Vodafone India and Idea Cellular
** Airtel’s MoU with Tata Teleservices & Tata Teleservices Maharashtra to merge their Consumer Mobile Businesses
** JioPhone’s digital empowerment of 50 crore feature phone users at an effective price of zero
** Reliance Communications completion of merger with MTS
The telecom buzzword for 2018 appears to be 5G — smarter, faster communication. But that’s going to take around two to three years for full deployment.
(Aparajita Gupta can be contacted at aparajita.g@ians.in)
—IANS
by admin | May 25, 2021 | Books
(2017 In Retrospect)
By Saket Suman,
New Delhi : A novel that takes its readers into the abyss of poverty and patriarchy, thereby narrating the sordid uses of power and the agony it unleashes; a dystopian satire that draws a telling portrait of our times; and finally an international bestseller from India weaves together a writer’s experiences as a social and environmental activist — all of this in fiction.
Two years ago, there was a spontaneous protest by leading Indian writers who returned their Sahitya Akademi awards in the wake of what they called a growing climate of intolerance and a threat to free speech in the country. Later, these writers were dubbed as those with “vested interests”, seeking “cheap publicity” at a time when their books had “stopped selling”. Those opposed to them pointed out that, as writers, the ideal way to put their perspectives before the public was through their writings — and few could disagree with this fundamental point.
Cut to the present: The year 2017 witnessed the release of at least three powerful novels, along with two short story anthologies, all of which use the medium of art and fiction to reflect the burden of society.
Leading the charge with huge publicity and global media attention was the return of writer-activist Arundhati Roy with her novel “The Ministry of Utmost Happiness”. The novel came after a hiatus of two long decades, during which Roy was actively involved in a number of social and environmental campaigns — a lot of which is reflected in the offering. From Kashmir to Maoists and transgenders to crony capitalism, it is an inward contemplation of a master storyteller on the times and surroundings she is living in.
“I speak as a reader and a publisher when I say that I turn to fiction, as much as to non-fiction, when I seek to make sense of our times, or any time that has gone past us. ‘The Ministry of Utmost Happiness’ is a stellar example of the sheer humanity of the art of the novel. What such a book does is stand up for integrity: It shows us both searing beauty and the fearsome ugliness. Arundhati Roy’s book is an empathetic, hopeful and fiercely idealistic response to the epic tale of Independent India. What more can one ask of a great Indian novel,” Meru Gokhale, Editor-in-Chief, Literary Publishing, of Penguin Random House India, asked while speaking to IANS.
Soon after Roy’s novel came “When the Moon Shines By Day” by Nayantara Sahgal, a member of the Nehru-Gandhi family and a noted writer who spearheaded the “award wapsi” campaign in 2015. The moon obviously does not shine by day nor does the sun shine by night. “Something is wrong if one is forced to agree with such propositions, or be punished for refusing to agree,” Sahgal said, pointing to the larger narrative that she presents in her novel.
Thus, a character finds her father’s books on medieval history disappearing from bookstores and libraries. Her young domestic help, Abdul, discovers that it is safer to be called Morari Lal on the street, but there is no such protection from vigilante fury for his Dalit friend Suraj. Kamlesh, a diplomat and writer, comes up against official wrath for his anti-war views.
And finally, the year closed with the recent release of Kiran Nagarkar’s “Jasoda”, a commentary on society narrated as fiction. The readers question the protagonist Jasoda, seeking to understand whether she is a mother, murderer or saint?
“You could characterise ‘Jasoda’ as a novel that explores the incidence of female infanticide, its causes and its consequences in Indian society, particularly in the hinterland; or a novel that bridges the urban-rural divide through the theme of migration, a live issue for our times; or a novel that depicts the generation gap between the acquiescent pre-liberalisation generation and the ambitious, confident post-liberalisation generation; or a novel that shows how power tends to be all-consuming, and yet how vulnerable the votaries of power eventually are; or a novel that paints the inequities of gender disparity and discrimination in horrifying, poignant ways,” Udayan Mitra, Publisher, Literary, HarperCollins India, told IANS.
” ‘Jasoda’ is all of this and more; for it is above and beyond everything a Kiran Nagarkar novel, written in his inimitable style and marked by his unique perceptions; it captures and transcends reality. Perhaps the most important thing to remember about the book is that the central character is a woman, she is a mother, and her name is Jasoda — a name everyone familiar with mythology knows. What the book is ultimately about, for me, is how myth and reality are at cross-purposes in today’s India,” he added.
Above and beyond these names are “When Danniel Comes to Judgement” by Keki Daruwalla and “Up Country Tales” by Mark Tully — both short story anthologies — bringing many societal issues to the fore. The biggest achievement of these books lies in the fact that they have transported their settings to the ground realities of the times we are living in, moved away from an elitist urbanscape (the current trend) and, in doing so, they have only rekindled the rich legacy of the likes of Raja Rao, Mulk Raj Anand and R.K. Narayan, who gave expression to traditional cultural ethos of India and its ground realities in their writing.
(Saket Suman can be contacted at saket.s@ians.in)
—IANS
