India and the US on Tuesday agreed to work closely to tackle macro-economic issues and tax evasion. The two countries also opened new dialogues on infrastructure financing and financial sector reforms under the US-India Economic and Financial Partnership.
Calling the Indian economy a “promising, rapidly expanding” one, visiting US treasury secretary Timothy Geithner said the country’s “economic success” in the last 15 years has been remarkable. In a joint presser with finance minister P Chidambaram, Geithner said India’s recent economic reform measures would help create the foundation for stronger economic growth.
Importantly, he seemed to recognise the Indian government’s policy paradigm of “inclusive growth” as he said the domestic reforms and well as the cementing of India-US economic ties would spur trade and investment flows between the two countries. The reforms, Geithner said, would ensure that “gains of those growth and investments are shared more broadly by the citizen of India”.
Geithner and US Federal Reserve chairman Ben Bernanke are on a two-day visit to participate in the 3rd cabinet level meeting of the US-India Economic and Financial Partnership
Among others, the meeting was also attended by RBI governor D Subbarao. Three working groups have been formed between the two sides on macro-economic issues, infrastructure financing and financial sectors.
Read more: The Financial Express
Now, Punjab has a department to attract investment
In a bid to accelerate industrial growth in the landlocked agrarian state, Punjab deputy chief minister Sukhbir Badal – riding high on his party’s comeback to power earlier this year – has introduced a first-of-its-kind cabinet portfolio, exclusively for attracting investment in the state. And, it has been headquartered outside Punjab, in the national capital of Delhi.
Christened as department for investment promotion, it will be headed by Sukhbir Badal.
“The department was introduced to revive industry as well as to create employment opportunity. The objective is to remove redtapism and make a single window system functional through industrial reforms,” Sukhbir Badal told TOI.
The initial focus will be on sectors like textiles, food processing and dairy. Set up in Delhi on May 26 this year, it’s being locally managed by Punjab’s resident commissioner Kalpana Baruah, an IAS officer of 1985 batch, who has been given this department’s charge as its principal secretary.
The department has also formed a Punjab Investment Advisory Council (PAIC), which has top honchos of companies as its members. The council has five sub-committees, including healthcare, infrastructure, skill development, industries and IT & IT-enabled services.
These sub-committees are headed by officers of principal secretary rank – Vinny Mahajan (health), PS Aujla (PWD), SS Channy (technical education) and A K Talwar (industries and commerce).
Two meetings have already been held where several captains of industry, including Apollo group chairman Onkar S Kanwar, Max Healthcare chairman Analjit Singh, Avantha group chairman Gautam Thapar and Airtel vice-chairman Rakesh Bharti Mittal, attended.
Read more: The Times of India
State social infrastructure spends beat GDP growth
The state spending (combined spending of state governments and the centre) on social infrastructure has been growing at a compound annual growth rate (CAGR) of 18.7 per cent, ahead of nominal GDP growth at 15.3 per cent. On the other hand, growth in spending on physical infrastructure (15.7 per cent) kept pace with nominal GDP growth. Consequently, the share of spending on social infrastructure in GDP increased from 4.1 per cent to 5 per cent between 2003-04 and 2010-11, while the share of physical infrastructure spending in GDP marginally increased from 4.5 per cent to 4.6 per cent, a recent Crisil Research study revealed.
If these are some of the positive features, there are causes for concern as well. Expenditure on power projects, ports, irrigation, railways have not been growing sufficiently. “The government should reallocate its increased savings accrued from curtailing subsidies in fuel, fertilisers, and food on education, health, and physical infrastructure,” said Crisil Research.
Read more: My Digital FC
The Uneven urban growth of Delhi-NCR
In terms of planned urban growth, the evidence for real estate development being backed by the creation of associated physical infrastructure is higher in Noida and Greater Noida. Gurgaon and Faridabad are at the opposite spectrum, where infrastructure is developed after the real estate potential of an area has been nearly fully exploited. In other words, infrastructure projects in these areas is largely taken up only after an area is already primed for real estate growth. Even so, Gurgaon has seen the maximum capital appreciation for investors and end users.
The upcoming areas of Dwarka Expressway and new sectors on both sides of NH-8 up to Manesar are part of the Master Plan 2021. As a result, infrastructure development in these sectors is now being taken up actively to support the large residential projects expected to reach completion over the next 3-5 years. However, despite this forward-looking approach of capacity building and future planning, it remains to be seen whether the upcoming urban sprawl will be sufficiently supported by necessary infrastructure. Fundamentally, the Master Plan is a statement of intent and not a time-bound guarantee.
The Master Plan
Zoning and master planning is an exercise which allows the authorities to control the direction and extent of a city’s growth boundaries while bringing newer areas under their management. At times, changes are required to ensure that the growth potential is not undermined by slow policy making. Bringing newer areas under development aids and benefits speculators and land owners as well as realtors who have already acquired land before the area was brought under the Master Plan.
Read more: Money Control
Uniform building bylaws in Punjab soon
Punjab government has moved a proposal to have uniform building bylaws in the state so as to ensure planned growth of urban areas and check harassment of public by multiple authorities.
The announcement was made by deputy chief minister Sukhbir Badal on Tuesday.
“Bylaws for different buildings have been creating confusion for both developers and public who often get harassed. Plus, these laws have resulted in haphazard growth in the urban areas. There is a need for uniformity,” Badal Jr said.
At present, bylaws in Punjab are different for buildings under state’s IT department, municipal corporations, local bodies and urban development bodies.
The government has tasked the urban development authorities to come out with a model set of building byelaws which would be applicable to all buildings whether industrial, commercial, IT sector or residential.
The simplification would also result in early clearance of building plans submitted by the people.
“A separate procedure on decentralization of building plan approval system has been conceived to encourage people to opt for sanctioned plan and ensure uniform development of urban areas” said Badal.
In the same meeting, the government also mooted a proposal by a representation of builders to introduce incremental floor area ratio for individual residential plots.
If cleared, the new reform would give a major relief to plot holders.
See article: The Times of India
Delhi Metro Growth Plans Right On Track
Land acquisition hiccups and delays in getting clearances from various agencies in the Capital haven’t stopped Delhi Metro Rail Corporation’s expansion plans from moving “ absolutely according to schedule”. This was stated by DMRC’s Managing Director Mangu Singh in an interview to Mail Today where he emphasised that the ongoing process of adding another 140km of Metro lines in Delhi, Noida and Faridabad is proceeding according to plan. “ We have started work on almost all the proposed corridors and aim to open them for operations by 2016,” he said. Singh said that certain anticipated as well as unforeseen challenges are bound to emerge for any infrastructure project of such magnitude.
Spurt in mid-size hotels
While demand remained steady, the proliferation of mid-scale hotels was largely responsible for a decline in the ARRs for Bangalore during the first half of this year, says a joint survey by Cushman & Wakefield and CII.
India’s top six cities are expected to see 50,000 new hotel rooms across categories in the next 5- 6 years. This is in response to the steady growth the hospitality sector has recorded over the last few years. It is expected to see 14,800 fresh keys by the end of the year. Out of the total expected supply for 2012, 2000 new hotel rooms have already entered the market, according to a joint survey by Cushman & Wakefield and CII.
NCR, with a total room supply of 17,500 rooms, is expected to see the highest fresh hotel room supply in the next 5 years. Mumbai (10, 200) and Bangalore (9, 400) will also see significant addition to the existing inventories in the city. The addition of new inventory will be concentrated in the potential growth areas – especially around airports, commercial growth corridors, industrial corridors and SEZs. These micro markets emerged as a result of business centres that were created in these cities due to growth in IT/ITeS , trade and commerce.
“India’s hospitality sector has been witnessing interest from a variety of segments ranging from – MICE, Wellness Tourism, Spiritual & Pilgrimage Tourism, apart from the traditional business or leisure travel. The demand has been strong from both foreign as well as domestic tourists. Given the rather diverse nature of demand, the hospitality industry is also looking at creating adequate products to service the varied tourist requirements. With the support and initiatives by the governments at various levels, the hospitality sector is moving towards comprehensive growth”, said Akshay Kulkarni, Regional Director – Hospitality, South and South East Asia, Cushman & Wakefield.
Read more: The Economic Times
Demand for home, auto loans doubles after rate cut, says SBI
STATE Bank of India on Tuesday said it is witnessing early signs of revival in credit growth as mid-size companies have started seeking fresh funds.
“There are early signs of credit uptake. Mid-size companies are coming for fresh lending,“ SBI managing director and group executive for national banking A Krishna Kumar said on the sidelines of a banking event here.
He, however, said it is too early to predict a full-fledged credit revival based on these early figures.
Referring to retail credit, which has not been badly impacted in the first half, Kumar said the number of applications have nearly doubled in the home and auto loan segments after the recent reduction in interest rates in these segments. Credit growth has been flat in the second quarter at 0.1 per cent to 16.4 per cent, according to the Reserve Bank of India (RBI) data for the period.
From: Financial Chronicle,10 October, 2012,Mumbai