India`s GDP was revised downward consistently in the last three quarters of 2012. In 2013, this trend will prevail – though the quantum of revision will be lower. The country`s economic environment will certainly improve in 2013, with a corresponding (though lagging) gain in momentum for real estate. The most tangible benefits of economic improvements on the Indian real estate space will be seen in 2H2013.
The average inflation rate (based on the wholesale price index, or WPI) moderated to 7.4% in 3Q12. This can be seen as sensibly low when compared with the average CPI, which remained at 10.2%. As a result of the slight moderation in WPI inflation, the Reserve Bank of India started softening its cash reserve ratio to improve the credit situation. Further easing of liquidity with the prime objective of reviving the GDP is expected in the first half of 2013. Base rates, which peaked in 3Q12, are likely to start falling in 4Q12 on the heels of monetary easing by the RBI.
Residential Real Estate In 2013
Residential property prices have breached affordability limits in cities like Mumbai. Nevertheless, developers will have to factor in the ground realities of the business while debating the lowering of prices to catalyse sales in 2013. Obtaining the 57-odd permissions to begin construction of a project can take as much as two years. During this time, the cost of acquisition or even just holding the land for a project rises. Builders are already beset with the increased costs of license costs and cost of construction.
Read more: Money Control
Investing in Indian Real Estate An Intriguing Prospect – If You Qualify
India – home to over 1.2 billion people according to its 2011 census, some 17 percent of the world’s population though occupying only 2.4 percent of the land mass. Despite huge growth in urbanisation in the past three decades, more than two-thirds of Indians continue to be rural dwellers. But even so, there are more than 20 cities with populations of over a million people.
In this overview, we take a look at the state of real estate investment across the sub-continent but especially with reference to three of the largest urban centres – Delhi, Kolkata and Mumbai. And we suggest that a key factor in real estate investment going into 2013 should be alignment with the IT-BPO sector.
But first we take a look at who can – and who can’t – buy real estate in India.
From the perspective of property investment, one key fact stands out. By and large, the only people who can buy Indian real estate are Indians. And in the case of agricultural land, permitted buyers must be resident citizens.
India is by no means the only country in the world which places restrictions on foreigners buying real estate, though it must surely be the largest to effectively limit the category of permitted buyers – foreign or resident – by dint of blood ties with the country.
Read more: Invezz
Co-op societies can’t interfere in plot sales
Interference by cooperative housing societies in the sale and transfer of plots by its members may come to an end, with the Delhi high court saying that societies can’t undertake such restrictive practices.
A division bench comprising Justices Sanjay Kishan Kaul and Vipin Sanghi recently ruled against the Soami Nagar cooperative house building society, which had tried to prevent the sale of a plot by its member to an outsider. The society had claimed only followers of Radha Soami faith/sect could purchase the plot after they become members of the society. But HC held this precondition to be bad in law, and gave the Registrar Cooperative Societies a month’s time to remove such restrictive bylaws.
Slamming the society for becoming a “property broker” to earn profit from every land sale, HC asked the new owners of the plot to apply for membership of the society. “It is surprising that the society can go to any lengths to somehow deprive the citizens of this country, who are not members of a sect of religious beliefs of Hindu, of enjoyment and ownership of plots and flats acquired for valuable consideration through registered documents.
Read more: The Times of India
A New Agenda for the Millennium City
Barely two weeks into his latest assignment, Vijay Singh Dahiya, the Commissioner of Municipal Corporation of Gurgaon (MCG), is beginning to get a good grasp of the primary issues concerning on his agenda. He has to deal with problems that are not only civic, but administrative in nature. Dahiya says his strategy, as far as civic issues is concerned, is two pronged — vehicular decongestion and sanitation — to begin with. “We are looking at every possible means to widen up roads in order to ease traffic. Areas where possibility of underpasses or flyovers exist are being seriously considered and work on some of them will begin soon,” said Dahiya. The biggest project is the proposed flyover at Mahavir Chowk. For an estimated cost of Rs 250 crore, this four- km long flyover will connect Rajeev Chowk to Delhi- Gurgaon Expressway way and clear up traffic inside Gurgaon.
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Government to amend rules for levying toll charges
Government today said it would soon amend relevant rules that will allow collection of toll charges on highways only after their expansion is completed.
“The toll that is being charged from the date of awarding of contract for expansion of highways from four lanes to six lanes is being done as per the rules notified in 1997,” Surface Transport Minister C P Joshi said replying to supplementaries in the Lok Sabha.
He said discrepancies in the rules notified in 1997 and 2008 were causing difficulties to motorists across the country.
The minister pointed out that the rules were cleared by Parliament which alone could set them right.
“We will soon move amendments to the rules. The matter would be referred to the Cabinet shortly,” he said.
Joshi also assured the House that the hike in toll fees on roads which would be expanded from four lanes to six lanes would not be more than 25 per cent.
To questions from members, he said it was time they took a conscious decision on whether they were ready for public- private partnership model in construction of highways.
He said investments to the tune of Rs 80,000 crore have been made in the sector in the public-private partnership mode and 20,000 km of roads have been built through such initiatives.
To another question, Joshi said tractors have been exempted from paying toll tax and a waiver of 50 per cent tax has been extended to vehicles registered in district where the toll plaza is located.
See article: The Economic Times
India-Australia to strengthen trade ties
Finance Minister P Chidambaram today said there is huge opportunity for increase in investments from Australia into India, particularly in sectors like mines and minerals, clean and renewable energy, food processing, engineering, manufacturing, marine and fishery.
At a meeting with Wayne Swan, Deputy Prime minister and Treasurer of Australia at his office today, Chidambaram said India-Australia bilateral partnership which was raised to the level of strategic partnership in 2009 has led to a rapid expansion in trade and investment ties between two countries.
The trade between our two countries has more than doubled in the past six years to more than $20 billion. He said India’s investment in Australia has also been increasing and a large number of Indian IT companies have made their presence in Australia and are growing.
Swan welcomed the suggestions and assured full cooperation from their side, the finance ministry said in a statement today. He agreed there was a need to bring the focus back on Doha Round of talks which have gone in background recently.
See article: Business Standard
Rupee weakens by 6 paise vs dollar to 54.32 ahead of US Fed meet
In listless trading, the rupee fell back by six paise to end at 54.32 amid fresh dollar demand from importers ahead of the conclusion of US Fed’s two-day meeting where it is widely expected to expand economic stimulus programme.
Around USD 175 million capital flows in Indian stocks, however, capped the rupee slide as importers, especially oil companies, stepped up dollar purchases, forex dealers said.
At the Interbank Foreign Exchange (Forex) market, the domestic unit resumed slightly lower at 54.29 from overnight close of 54.26. It later moved in a narrow 19-paise range of 54.15 and 54.34 before concluding at 54.32, showing a fall of six paise or 0.11 per cent.
Yesterday, it had risen by 22 paise or 0.40 per cent. Forex dealers said the rupee also tracked the Indian benchmark Sensex’s movement which erased gains after IIP data and retail-level inflation numbers came out. The index closed down by 31.88 points or 0.16 per cent.
As per provisional data, FIIs pumped in Rs 950 crore (USD 175 million approx) in stocks today.
The dollar index was down by 0.10 per cent against a basket of six major currencies amid widespread expectations that the US Federal Reserve policy makers will decide to unleash further stimulus. The New York crude oil was trading above USD 86 a barrel in Europe today.
Read more: The Times of India
Walmart to apply US laws to Indian operations; wants anti-bribery undertaking from store owners
Walmart is demanding anti-bribery undertakings from landlords of its Indian stores along with rights to inspect their books, the latest blowback from its global anti-bribery campaign that has put an unflattering spotlight on its fledgling India operations.
The US supermarket group’s India venture, BhartiBSE -0.68 % Walmart, now at the centre of a raucous political debate on the entry of foreign firms into the supermarkets sector, wants landlords of all its stores in India, including Easyday stores operated by partner Bharti Enterprises, to give undertakings saying they are not party to and will not indulge in corrupt practices, effectively bringing them under the ambit of US anti-bribery laws.
Landlords are not only expected to certify that they have not paid any bribes while building the premises, but also give undertakings that give Bharti Walmart powers to periodically check their books and other documents, a person with direct knowledge of the situation told ET.
A second source confirmed such an exercise was underway, and noted that KPMG had been tasked with securing undertakings from landlords. A landlord of an Easyday store in the NCR said a Bharti Walmart executive had called him earlier this week to inform him about an anti-bribery agreement that landlords must sign as part of the Foreign Corruption Practices Act, or FCPA, a 1977 US law that bars American firms and individuals from bribing government officials in any foreign country wherever they are operating or working in.
Read more: The Economic Times
Indians account for highest immigration into the UK; Polish influx up tenfold
Indians accounted for the highest immigration into the UK of any ethnic group during the decade to end-2011, beating the Irish, who slipped three slots to fourth position, behind the Polish and even Pakistanis.
While in the case of Indians, the movement was from No. 2 to No.1 status, Poland was in fact the surprise item in the UK’s latest 10-year census report, leaping out of nowhere to become the country behind the second highest set of immigrants. The previous census report had the Irish at pole position and Indians as the second highest.
The census also showed that London became the first region in the UK where the white British ethnic population is in a minority – with only about 45% of its population white Britons, down from 60% in 2001 and underlining London Mayor Boris Johnson’s claims about the cosmopolitan character of the city he heads.
Around one in three London residents are born overseas, and 24% are non-UK nationals. As for the UK, of the 7% rise in its population in the so-called ‘noughties’ decade, 60% is attributed to immigration, with the biggest chunk from the Indian subcontinent.
Read more: The Economic Times