Home sales in India could rebound in 2013, helped by quicker project approvals and lower cost of finance, according to analysts.
“Residential markets have entered CY13 on an encouraging note, with robust offtake seen in new launches across markets over the last three months,” global financial services group JP Morgan said in its January report. “We expect volumes in residential markets to improve over the next 12 months on pick-up in pace of new launches coupled with price discounting and mortgage rate cuts.”
According to CRISILBSE -1.79 % Research, absorption of new residential units across six key cities – Mumbai, the National Capital Region, Pune, Bangalore, Chennai and Hyderabad – is expected to increase at a compound annual growth rate (CAGR) of 7% to 251 million sq ft in the next two years. During this period, Mumbai is expected to record the highest CAGR of 14% due to pent-up demand, while capital values across regions are expected to rise marginally in the second half of 2013, the research body said.
The projection is a contrast to numbers reported for last year. According to JP Morgan, sales of residential units across major markets like Mumbai and NCR had dipped between 7% and 38% in first three quarters of 2012. Only Bangalore and Kolkata bucked the trend, recording growths of 3% and 6%, respectively.
Read more: The Economic Times
Commercial project ‘Spire Edge’ at Manesar designated as World Trade Center
The iconic World Trade Center, popularly known as WTC, is now virtually near the national capital with a plush 1.6 million sq ft commercial project starting at Manesar in Haryana.
Spire Edge, a mixed-use commercial project, has been designated as the ‘World Trade Center’, making it as the third operational WTC in India.
“After lot of rigorous assessment by World Trade Centers Association (WTCA), Spire Edge has got the status of WTC. This is the third operational WTC in the country after Mumbai and Bangalore,” WTC Manesar Senior General Manager Khair Ull Nissa told reporters here.
The 10-acre project, developed at an estimated cost of Rs 1,000 crore, will now be a member of an elite global business network that includes more than 330 WTCs in 100 countries, she said.
WTCA is a US-based non-profit organisation that promotes global trade by establishing WTCs across the world.
It provides various support function and networking links that help local companies to engage in global trade.
Read more: The Economic Times
2000-km freight corridor in two years: Bansal
Railways minister Pawan Kumar Bansal has set an ambitious target of building 2,000km of dedicated freight corridor (DFC) tracks over the next two years.
A 66-km DFC track of this ambitious project – from Sonnagar to Mughalsarai – is also planned to be made operational by December.
Bansal is likely to announce these plans in his upcoming budget speech later this month Implementation plans on this prestigious project – which is being monitored by Prime Minister Manmohan Singh – are being fast-tracked.
Following last month’s award of a Rs. 3,300-crore contract for building DFC lines on the 340-km stretch (from Kanpur to Khurja), the railways have readied plans to award work for the construction of another 640-km track from Rewari to Palanpur (western corridor) at an estimated cost of Rs.6,000 crores.
Three Japanese firms are vying for this major contract, which is likely to be awarded before the railway budget.
These include the Mitsui and the Sujitsu.
By July, additional contracts worth Rs.8,000 crore are scheduled to be awarded for building tracks on two sections.
There is the Palanpur-Baroda section on the western corridor at a cost of Rs.3,000 crore.
Per capita income rises 11.7% in 2012-13
India’s per capita income, a gauge for measuring living standard, is estimated to have gone up 11.7 per cent to Rs 5,729 per month in 2012-13 at current prices, compared with Rs 5,130 in the previous fiscal.
The estimated rate of growth in per capita income for the current fiscal, however, is lower than the previous fiscal when it grew by 13.7 per cent.
“The per capita income at current prices during 2012-13 is estimated to be Rs 68,747 as compared to Rs 61,564 during 2011-12, showing a rise of 11.7 per cent,” an official release by the Central Statistics Office (CSO) on Advance Estimate of National Income, 2012-13 showed today.
The per capita income in real terms (at 2004-05 constant prices) during 2012-13 is likely to attain a level of Rs 39,143 as compared to the First Revised Estimate for the year 2011-12 of Rs 38,037, it said.
The Gross Fixed Capital Formation (GFCF) at current prices is estimated at Rs 29.94 lakh crore in 2012-13 as against Rs 27.49 lakh crore in 2011-12, the release said.
However, at 2004-05 constant prices, the GFCF is estimated at Rs 19.44 lakh crore in the current fiscal as against Rs 18.97 lakh crore in the previous fiscal, it added.
The data also estimated an increase of 13.8 per cent in the Government Final Consumption Expenditure (GFCE) to Rs 11.87 lakh crore at current prices for 2012-13 against Rs 10.43 lakh crore in 2011-12.
On Private Final Consumption Expenditure (PFCE) for the current fiscal, it has estimated an increase of 12.8 per cent to Rs 57.06 lakh crore at current prices as against Rs 50.56 lakh crore in the previous fiscal.
8% growth for India will take tough decision, time: IMF
It will take India some tough decisions and several years before it can think of going back to a growth era of 8 per cent and more, which was an easy walk through till a few years ago, International Monetary Fund (IMF) has said.
“To go back to eight per cent (annual growth rate) you (India) need to see move on a lot of fronts and investment picking up very robustly.
“It will depend very much on whether the government can deliver on all the reforms that they’ve committed to and sustain this reform momentum,” Laura Papi, IMF Assistant Director, formerly with its Asia and Pacific Department, told reporters during a conference call Wednesday.
“We think that an important array of reforms is needed to get back to 8 per cent growth including legislative moves. The Land Acquisition Bill requires, of course, parliamentary approval, the GST requires even a constitutional amendment, etc. Labour laws are even further out and less likely,” she said in response to a question.
The IMF had yesterday said India’s growth rate is expected to drop to 5.4 per cent in 2012-13 from 6.5 per cent the previous year.
This is a substantial drop from the impressive growth rate of an average of 8.3 per cent India registered between 2004 and 2011.
“Outlook is for subdued growth and a fairly modest recovery for this year still accompanied by quite high inflation and elevated current deficit.
Read more: Business Line
Portugal keen to invest in infra, water sectors
Portugal is keen on investing in the Indian infrastructure, water management, waste management and alternative energy sectors.
According to Jorge Roza de Oliveira, Portugal’s Ambassador in India , the country was looking for opportunities to invest in emerging economies such as India, China and some of the Gulf nations.
“Ideally, we should look at investments in emerging economies like India. There is a huge prospect for bilateral trade but it is yet to be explored to its full potential,” de Oliveira said during an interactive session organised by the Confederation of Indian Industry (CII) here on Thursday.
India’s imports from Portugal stood at nearly $310 million in 2011-12 while exports stood at $525 million.
“I would be happy if the bilateral trade move up to $ 1 billion,” de Oliveira said.
Some Portugal-based companies, he said, already have a presence in electrical products, tools, solar energy and cements.
According to de Oliveira, a trade delegation headed by the Foreign Minister of Portugal is expected to arrive here in the first week of March. The trade delegation will comprise representatives from 50-odd companies.
India Inc’s investment abroad jumps 179% in January
Overseas direct investment by India Inc soared by 179 per cent in the month of January to $3.303 billion against $1.184 billion in the year-ago period.
This investment comes even as Indian companies are holding back investments in the country due to adverse demand conditions, both in the domestic and overseas markets.
Overseas investment by Indian companies is in the form of equity, debt, and guarantees issued.
The big ones
Among the big overseas investments made by Indian companies in January 2013 include: Bharat Petroresources Ltd ($439 million), Cox & Kings India ($249 million), Essar Steel ($155 million), Tata International ($128 million), and Videocon Oil Ventures ($127 million).
Downturn in overseas markets may be prompting Indian companies to pick up overseas assets at a relatively cheaper valuation, said a banker.
Indian companies’ overseas investment in the first 10 months of the current financial year have been about $3 billion lower, aggregating $23.325 billion ($26.468 billion).
The peak overseas investment in the current financial year was in the month of June when Indian corporates made investments aggregating $3.532 billion.
Transportation and Logistics
India could rank among top 3 aviation markets by 2020
A strong market growth rate, coupled with infrastructure expansion, will help the Indian civil aviation sector get back on its wings as the economy recovers, according to a FICCI-PwC report.
Indian civil aviation sector has continued to experience high passenger growth (domestic traffic CAGR is 17 per cent from 2009 to 2011), and if the trend continues, it could rank among the top three aviation markets in the world by 2020, the report added.
However, volatility in fuel prices, combined with high tax on aviation turbine fuel and other national policy-related issues, continue to challenge the sector’s growth, the report said. The recent increase of FDI up to 49 per cent in civil aviation might also not result in substantial increase in investment, since it has been imposed on the aggregate of FDI and FII.
The report also recommends a hike to the 26 per cent cap on FDI in defence, as it has failed to attract foreign investment. India has received only $ 4 million in the past 10 years since FDI was allowed in the defence sector, while the entire economy has received over $180 billion.
According to the FICCI-PwC report, India’s military aviation sector needs better access to technology, funding, and the Government needs to rationalise the tax and regulatory framework to keep pace with their global counterparts. The report stated that the medium and long-term perspective plans should be shared with industry in a transparent manner, without compromising on national security. This will provide the industry information and confidence to invest in a production process that is measured in decades than years.
Read more: Business Line