On India’s 65th Independence Day, Prime Minister Manmohan Singh made a promise to the people that every house in every village will be electrified in five years. Despite several such announcements in the past, the ultimate goal of complete electrification eludes us, though the Union Government has achieved significant success in rural electrification primarily through its Rajiv Gandhi Grameen Vidyutikaran Yojana.
Efforts are also being made to generate and distribute electricity to remote rural areas (where the grid supply hasn’t reached or is severely restricted) through small-scale energy generation systems in an off-grid mode using locally available renewable resources such as biomass, water, sunlight and wind. Such rural electricity access based on decentralised renewable energy (DRE) can bolster socio-economic development and alleviate poverty.
Sadly though, a number of commissioned DRE projects have failed to survive in the long run due to unresolved technical, socio-economic and institutional problems. The sustainable development of the DRE sector is hampered particularly by the high and inequitable tariffs for poor consumers, a lack of performance-based incentives and the perceived threat from the expanding centralised grid at the DRE project location. This article explains these concerns and offers suggestions.
Read more: Business Line
An Inviting Destination For Realty Investors
Conceived under the Capital’s first master plan in 1962, the National Capital Region (NCR) spread across an area of over 33, 578 sq. km is one of the largest urban agglomerations in the country covering Delhi, Uttar Pradesh, Haryana and Rajasthan. According to Gulam Zia, Executive Director, Retail, Advisory and Hospitality, Knight Frank India, from the perspective of return, real estate investment in the country garnered superior returns in comparison to other asset classes over the long term.
Mail Today (Realty Hotspots, Page 4)
Gurgaon has in the recent past emerged as the hub of real estate activity. The city has witnessed an upsurge in the development of almost all asset classes namely, commercial office, hospitality, residential and retail developments in the last few years. Limited supply of quality office spaces at affordable prices and the favourable policies of the Haryana State Government have been some of the key factors for the emergence of the region. Some of the preferred locations for investment in Gurgaon that have seen a variety of new project launches are the Golf Course Road Extension, the Dwarka Expressway and New Gurgaon (Manesar). There are several townships launched by renowned developers such as DLF, IREO, Vatika, Unitech, and Sobha amongst others. Infrastructural developments such as Kundli- Manesar- Palwal Expressway (KMP Expressway), Southern Periphery Road, Gurgaon- Faridabad Road and extension of Metro rail to newer locations will further aid the real estate growth.
Mail Today (Realty Hotspots, Page 6)
Haryana considers fee for transfer of land use license
Haryana government has proposed to levy charges for transfer of change of land use (CLU) licences given to develop commercial colonies or group housing societies.
It means that if any colonizer wants to transfer the licence while selling his land, he or she has to pay 10% of the total licence charges as fee to the government.
“We will be able to generate more revenue by charging the transfer fee as earlier there was no fee for licence transfer,” said S S Dhillon, principal secretary (town and country planning), Haryana.
The government has sought suggestions or objections of people to be submitted by December 21, before giving the final go-ahead to the proposed rule.
The state government is changing these rules after 36 years. As yet, there is no fee for transfer of the licence along with the land. As per the proposed procedure, the colonizer has to deposit 10% of the total licence fee as administrative charges to get in-principle approval from the director of town and country planning. Then, if the buyer fails to submit all the documents within the stipulated time, which would be maximum four months, the in-principle nod would stand expired and administrative charges would be forfeited by the department. However, the licence cannot be transferred to develop another piece of land as colony than the specific area mentioned in the permit, clarified Anurag Rastogi, director of town and country planning.
If materialized, the new rules may be called Haryana Development and Regulation of Urban Areas (amendment) Rules, 1976, said officials.
Read more: The Times of India
India: A hot brand climate?
Notwithstanding India’s recent stock market slide, the country’s economy has seen remarkable growth since the market reforms of the early 1990s. For the first time ever, many Indians have disposable income. This new generation of cosmopolitan consumers likes the prestige of global brands; now, Indian manufacturers must brand to fight back.
As the world’s seventh largest and second most populous country, India has always played a part in world affairs. But now India is making its mark on the map for a different reason.
While the troubles from the steep stock market decline—some investors believe the economy grew too much too soon, noting that the market was at an all-time high before its considerable slump—have caused feelings of uneasiness and anxiety to permeate throughout the country, political and economic reforms over the past few decades have enabled the country to focus on a vision: become a developed nation by 2020.
Thanks to a concentration on high-tech manufacturing, software engineering and outsourced services, a young, vibrant middle class has appeared with significant spending power. And the consumer goods sector can barely keep up with demand.
“The market has expanded many-fold in the past few years (than) it ever did during the decades before,” says Burges Dandiwala of Brand Catalyst, a brand agency based in Mumbai. “With this has come an inflow of foreign brands that are competing with the traditional, long-established Indian products. Before there was essentially a monopoly: one brand of soap for the low end, one brand for the high end, for example. People now find it difficult—there’s a choice for everything. People are just starting to realize the importance of branding.”
Read more: Brand Channel
Luxury Retail Shifts From 5-Stars to High Street
In 2010, when Louis Vuitton downed shutters on a seven-year old store at The Oberoi, New Delhi, many saw it as an early sign of luxury companies looking out for more lucrative retail locations outside of hotels-their only home in India until then-for higher footfalls and more business from a growing number of affluent buyers. Two months ago, the French fashion giant unveiled its first high-street boutique in India at the Khader Nawaz Khan Road in Chennai, a destination lined with some of the swankiest stores. Business is brisk.
‘Bergamo’, which houses the LV store in Chennai will soon have exclusive outlets of Bottega Venetta, Cartier watches and Jimmy Choo. Rentals on the street have been rising- to book a space on KNK Road, one needs to shell out around 250 per square feet per month as compared to 150 psf three years ago.
In the business district of south Mumbai, the Horniman Circle area is getting attention from luxury labels. Starbucks’ first Indian outlet followed on the heels of an Hermes store, and French footwear maker Christian Louboutin will be their neighbour next month. Rentals in the area have shot up dramatically in the last two years from 250 psf to 400 psf, says Shubhranshu Pani, MD-retail, Jones Lang LaSalle. “One brand draws more brands and the place soon becomes kind of a luxury destination,” he adds.
Read more: The Economic Times
Core industries post 6.5% growth in October
Eight core industries’ output grew 6.5 per cent in October on the back of double digit growth in output of coal and petroleum refinery products.
This overall performance is much better than the 0.4 per cent increase recorded in October last year and five per cent increase in September 2012.
This has raised hopes that the IIP numbers for October, which are expected around mid-December, will be much better than the 0.4 per cent contraction seen in September.
The eight core industries – coal, crude oil, natural gas, petroleum refinery products, steel, cement and electricity – have a weightage of 37.90 per cent in the index of industrial production.
For the April-October 2012 period, the cumulative growth rate stood at 3.7 per cent, lower than the 4.3 per cent growth seen in same period last year, official data released on Friday showed.
The growth spike in October is largely attributed to the robust output growth in coal (10.9 per cent) and petroleum refinery products (20.3 per cent).
Both crude oil and natural gas production declined in October on a year-on-year basis.
While steel production grew 5.9 per cent in October, fertiliser production saw growth of two per cent for the month under review.
In October 2011, steel output grew 4.2 per cent and fertilisers output declined 2.1 per cent.
Electricity generation grew 5.2 per cent in October, lower than the 5.3 per cent growth recorded in the same month last year.
Read more: Business Line
Shome calls for ‘moving’ revenue targets with economic cycles
The Centre should look at the concept of ‘moving’ revenue targets linked to economic cycles instead of ‘fixed’ ones, a top fiscal expert, Parthasarthi Shome, has suggested.
This could come in handy when the economy takes a downturn in recessionary times, leading to a sharp fall in revenue collections.
By adopting fixed revenue targets in Budget estimates, revenue authorities are often compelled to use different (including questionable) tactics to achieve the sometimes stiff targets set at the beginning of the year.
In India, for instance, revenue authorities resort to holding back refunds at times when collections take a dip.
If economic growth falters, there is no adjustment mechanism available during the course of the financial year, Shome, who heads the Prime Minister appointed GAAR committee, pointed out at an Assocham event on ‘Trends and recent developments in taxation’.
Rather than making revenue authorities accountable to Parliament for the revenue targets set at the beginning of the year, one could look at the concept of measuring tax gaps, he suggested.
Read more: Business Line
Bridge Over the River Yamuna
The Delhi government is planning to construct another bridge over Yamuna. This bridge will connect Karawal Nagar in east Delhi with Alipur in Outer Delhi alongside the national highway No 1(NH- 1). The new bridge will be constructed somewhere near Sonia Vihar, several kilometres upstream the Wazirabad bridge. At present, the Wazirabad bridge is the only link between Outer Delhi, Singhu border on NH1 and north east Delhi areas.
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NIB on its way, to have powers of approval
Decks have been cleared for setting up of the National Investment Board (NIB) to expedite projects entailing investment of Rs 1,000 crore and above. To be given both monitoring and approval powers, the body could, however, be called the Cabinet Committee on Investment (CCI) if the Cabinet so prefers.
The Cabinet Secretariat was learnt to have received a Cabinet note on the proposed body from the finance ministry on Tuesday and it is likely to be taken up for consideration by the Union Cabinet shortly.
Official sources said that while the NIB would initially deal with infrastructure projects only, there is a proposal to expand its mandate to include manufacturing sector projects as well. The finance ministry has left it to the Cabinet to decide whether it should be called the NIB or CCI.
Regardless of the nomenclature, it would be a Cabinet committee headed by the Prime Minister and modelled on the lines of the Cabinet Committee on Infrastructure. The ministry of environment & forests, which was the first to raise an alarm over the proposal to set up the NIB, and other ministries concerned would be part of the proposed body. It would be housed in either the Cabinet Secretariat or the Prime Minister’s Office (PMO), sources said.
While the PMO gave its nod to an NIB last week, some complications had arisen with the Cabinet Secretariat arguing that giving it the powers to override decisions of other ministries would require many changes in the transaction of business rules of the government. It, therefore, suggested a CCI, to be assisted by a committee of secretaries.
Read more: The Financial Times
2 new rapid rail corridors planned
The Government is planning to develop two new rapid rail transit corridors – Delhi-Rohtak-Hisar and Delhi-Baraut via Shahdara in addition to previously announced Delhi-Alwar, Delhi-Meerut and Delhi-Panipat line, said urban development minister Kamal Nath. “We have today approved two rail corridors which are Delhi-Rohtak upto Hisar and the second is Delhi-Shahdara- Baraut,” he said while speaking to reporters after a meeting with Lieutenant Governor Tejendra Khanna.
See article: Deccan Herald
FDI in pharma: PM to convene meeting on Monday
The Prime Minister, Manmohan Singh, has intervened to sort out the differences between the Finance and Commerce Ministries over the implementation of 100 per cent FDI in pharmaceuticals sector.
The Prime Minister will chair a special meeting on Monday on the issue, which will attended by the Finance, Commerce and Health Ministers.
The Prime Minister’s Office had decided to push FDI in the sector, which is worth Rs 1 lakh crore. Sources said the meeting is also an effort to expedite the implementation of 100 per cent FDI.
The Government sources said the policy will be taken to Cabinet only after the differences are resolved between the ministries in the meeting convened by the PMO.
There were reports that the Department of Industrial Policy and Promotion (DIPP) and the Finance Ministry had differed over certain guidelines in the allowing 100 per cent FDI. The differences, according to reports, were particularly on the involvement of Competition Commission of India in scrutinising mergers and acquisitions.
There are also differences on the process of approval by the Foreign Investment Promotion Board (FIPB). The Finance Ministry had suggested that only those cases involving FDI beyond 49 per cent in existing units should be considered by the FIPB.
The Commerce Ministry, on the other hand, wants foreign investment in existing pharma units to be approved by the FIPB.
See article: Business Line