INDIA GROWTH STORY

Alarm in K'taka, TN as Naidu 2.0 goes on biz hunt

noreply@blogger.com (Ways2earn) — Sun, 23 Nov 2014 05:23:00 +0000

Uses New State's Tax Breaks To Woo Tech, Mfg Investment

For many years after he lost office in 2004, Chandrababu Naidu would flinch when complimented on his industry-friendly approach as chief minister of united Andhra Pradesh. He seemed wary of owning up to his past, attributing his electoral loss to the pursuit of liberal economic policies that were seen to be focused around Hyderabad and ignored the rest of the state, particularly rural AP.

Back in the saddle this June, Naidu 2.0 is closer to his old avatar. His pincer raids on Karnataka and Tamil Nadu have raised hackles in both Bengaluru and Chennai, with Karnataka chief minister Siddara maiah complaining to PM Narendra Modi about the unfair tax breaks AP gets because of its `new state' status. No surprises for guessing that J Jayalalithaa had also shot off a similar missive to the PM.

That the CM of a state that's synonymous with IT and accounts for almost 40% of India's technology industry is worried about Naidu's charm offensive is a good indicator of how serious Karnataka is taking Naidu's threat.

Naidu wants to attract $2 billion in IT investments over the next 5 years to AP . He also wants to create 50 lakh tech jobs, take broadband connectivity (1,000 mbps or gigabit) to every village and make at least one person e-literate in every household. With AP chief minister Chandrababu Naidu going all out to attract investments to his state, the Karnataka and Tamil Nadu governments are panicking. Not only does Naidu want to attract $2billion in IT investments in five years, to boost entrepreneurship he plans to create one-million sq ft of incubation space by 2019.

In early November, Naidu was in Bengaluru for the nth time, meeting industry captains and entrepreneurs. He made a pit stop at Cisco's campus where he addressed employees at an all-hands meeting, perhaps the first townhall hosted to welcome the head of a local state. He shared his vision on how technology would be the backbone of his state. He also met senior executives from firms like Flipkart, First American Corporation, ITC Infotech and ABB. Besides, Naidu inaugurated the Bengaluru facility of Nutanix, one of Silicon Valley's hottest start-ups, before sitting through a session on e-governance and financial inclusion at the start-up incubator founded by American-Indian billionaire Vinod Khosla.

He visited Khosla Labs and was keen to explore the possibility of using Aadhaar at MeeSeva (at your service in Telugu), a single portal for government-tocustomer and government-tobusiness services. "He had a lot of questions on how GIS could help solve civic problems. Our whole pitch was about governing using data, about running cities using a single dashboard, and he was very impressed," Srikanth Nadhamuni, CEO of Khosla Labs, told TOI.

"He's a very forward thinking leader, an entrepreneur at heart, someone very keen on public service," said Dheeraj Pandey , foun der of Nutanix, the five-year-old, California-based company. Naidu got to know of Nutanix thanks to B V Jagadeesh, an AmericanIndian entrepreneur who grew up in Bengaluru and is an investor in a range of start-ups, including Nutanix.

Naidu's forays to Bengaluru have a specific purpose: To lure investments into the backward Rayalaseema region of AP. Naidu, in his state, is being accused of being partial to the region around Vijayawada, leaving the drylands of Rayalaseema—where his rival Jagan Reddy is strong — out of his development agenda. In TN, Naidu's focus is to get manufacturing investment to move across the border to Sri City, a special economic zone located in Tada, which is 55 km from Chennai.

Naidu is pushing Tada so that major investments that can leverage proximity to Chennai can be located here. Japanese auto giant Isuzu first zeroed in on Chennai for its India plant before opting for Sri City. Lack of industrial land and power in TN combined with access to a high-quality port at Krishnapatnam in Nellore is moving industrial projects across the border. This is naturally causing jitters in Chennai.

In fact, much to Karnataka's chagrin, Naidu got Hero MotorCorp to set up its first factory in in AP . Siddaramaiah had then said, "We offered maximum concessions to the company (tax holidays, excise duty exemption, concessions in entry tax, interest-free loan of central sales tax). But AP offered them free land. We cannot do that because other companies will also ask for it. We cannot compete with AP on this.'' Power is another plus for Naidu. With his government is promising uninterrupted power to factories, the AP-TN border area is turning attractive for industry . "Power is the elixir for industrialization. While AP is surplus, Telangana appears to be struggling on the power front, but for the recent power purchase agreement between Telangana and Chhattisgarh," TS Raghupathy , advisor to India Cements, said.

In fact, what Naidu is doing to TN is exactly what that state did to Karnataka a couple of decades ago. Between 1978 and 1985, a flurry of investments meant for Bangalore stopped just inside the Tamil Nadu border.TVS Motor, Ashok Leyland, Ti tan and several others pumped in hundreds of crores into Hosur, 40km from Bangalore.

Manufacturing investments, obviously , are big on Naidu's mind. End November will see Naidu in Japan where he will pitch for Japanese companies to set up shop in Tada, even while seeking investments for his new capital. This is reminiscent of what he did earlier. In December 1999, Naidu had flown to Bangalore and pleaded with members of the Confederation of Indian Industry to consider AP . He pitched proximity to the interstate border and assured investors of royal treatment.

"More than what he said it was his audacity to call for investments from another state that appealed to businessmen.He was the first CM to woo investors from other states. Previously, CMs only went to Delhi to showcase their states," said T Ramappa, then secretary of the Federation of Karnataka Chambers of Commerce and Industry.

Babu--as Naidu is referred to in AP--did not restrict himself to Bangalore. In the manner of a salesman, he travelled to the US and sat outside the office of Bill Gates for a few hours to meet him. The result: Micro soft set up a development centre in Hyderabad and kickstarted an IT enclave in the Nizam's city.

Many other tech firms followed although by the time they actually came up Naidu had lost polls. They included Infosys, Wipro, Facebook and Google.

Naidu also offered free land to the ISB and got it located in Hyderabad though its first choice was Maharashtra. Impressed by the upcoming Hyderabad, even US President Bill Clinton decided to drop by (as did his successor George Bush).

This time around Naidu's mission is different. Although he claims that creation of a modern IT industry in AP is also his mission, insiders know that with a large coastline, export-oriented manufacturing near the ports offers a greater opportunity.

Moreover, strapped for cash, Naidu requires a lot of investment for the new capital that he wants to build on the river Krishna across the city of Vijayawada.

"I wanted to develop Visakhapatnam after Hyderabad, but by the time the turn came I had lost elections," he says candidly.

Now Visakhapatnam — a port city with a Navy base, two ports and a significant cosmopolitan crowd — is sought to be promoted as the Mumbai of the East.

This is a trifle ambitious considering the city is still reeling from a major cyclone and being on the east coast is vulnerable to more such storms in future.

According to latest reports, Singapore is weighing Naidu's plea to help prepare a blue print for AP's capital. S M Krishna, when he was chief minister of Karnataka, went head-tohead with Naidu to attract IT investments and turn Bangalore into a Singapore. If Naidu has his way, perhaps it will be Vijayawada that will become India's Singapore.

(With inputs from N D Shivakumar in Bangalore)

Exit Polls Give BJP The Thumbs-Up

noreply@blogger.com (Ways2earn) — Thu, 16 Oct 2014 02:20:00 +0000

Set To Form Govt In M'rashtra & Haryana, But Not All Projections Give It Clear Majority Sena May Finish 2nd, Cong 3rd, MNS To Fare Worse Than In 2009

BJP will form the next government in both Maharashtra and Haryana, exit polls predicted on Wednesday . The only thing they did not agree on was whether the party would win a clear majority on its own. If the polls are proved right, it will validate BJP's bold gamble in going it alone in both states, as well as its focus on a Narendra Modi-centred campaign that dwelt more on governance issues than on the communal rhetoric often associated with the saffron party .

Of the four exit polls that made projections for Maharashtra, one--by Today's Chanakya--gave BJP 151 seats or a clear majority in the 288member assembly . Another, done by AC Nielsen for ABP News, predicted that the par ty would just hit the half-way mark of 144. The CVoter poll conducted for Times Now gave BJP 138 seats and the Cicero poll for the India Today group gave it 124. According to the latter two, while BJP would need some support from others, it should hardly find that a problem.

Interestingly , Shiv Sena too is not seen as a major loser, at least in terms of seats, from the break-up of the 25-yearold alliance with BJP . All the polls agreed that it would finish second and improve significantly on its 2009 tally of 44 seats, though the numbers varied from 59 to 77. Three of the four polls put Congress in third spot, just a little ahead of NCP , while one had it the other way round. MNS would get fewer than the 13 seats it won in 2009, all polls said.

In Haryana, which recorded an all-time high turnout of 73%, only three polls made predictions. Two of them gave BJP a clear majority, while the third had it hitting the half-way mark. The ABP News poll suggested BJP will win 54 seats in the 90-member House, Chanakya 52 and CVoter 45. If any of these comes true, BJP will comfortably form the government in the state.

Modi's popularity still a vote-catcher?

PM Narendra Modi's dominance looks set to be entrenched with exit polls indicating that BJP chief Amit Shah's gamble of going it alone in Maharashtra and Haryana may have paid off.The gains indicated suggest continuing popularity of Modi and his message of development and probity. P 14

Vodafone wins Rs 3,200cr tax case

noreply@blogger.com (Ways2earn) — Sat, 11 Oct 2014 03:17:00 +0000

No Levy On Transfer Of Shares To Mauritius-Based Parent, Rules HC

Vodafone got a shot in the arm on Friday after the Bombay high court ruled in its favour in the transfer pricing case relating to undervaluation of share capital issued by Vodafone India Services Private Limited (Vodafone India) to its Mauritius parent.

The tax department sought to bring the transaction of issue of share capital within the transfer pricing ambit. It held that the differential between the price at which shares were issued by Vodafone India and the valuation done by the tax department to be in the nature of a loan to the Mauritius-based parent company . In other words, equity was recharacterized as a loan. The tax department raised a demand of around Rs 3,200 crore.

However, the high court held that issue of shares does not give rise to any income and there can be no question of any transfer pricing adjustment. A bench of Chief Justice Mohit Shah and Justice M S Sanklecha ruled, "Issue of shares at a premium by the petitioner to its non-resident holding company does not give rise to any income from an admitted international transaction." For the purpose of application of transfer pricing provisions, one of the prerequisites is that there must be an international transaction between associated enterprises (Vodafone India and the Mauritius company in this case). However, in the absence of income, no international transaction can arise.

"There is no charge express or implied, in letter or in spirit to tax issue of shares at a premium as income. In this case, the revenue seems to be confusing the measure to a charge and calling the measure a notional income. We find that there is absence of any charge in the Act to subject issue of shares at a premium to tax," ob served the high court.

Vodafone said in a statement on Friday that the company "has maintained consistently throughout the legal proceedings that this transaction was not taxable. We welcome the decision today in the Bombay high court".

On August 21, 2008, Vodafone India had issued 2,89,224 equity shares of Rs 10 each at a premium of Rs 8,500 per share.

However, the transfer pricing officer revalued the shares at Rs 53,775 per share. Based on arm's length pricing adjustment, the tax department held a total shortfall of Rs 1,308.91 crore to be a deemed loan given by Vodafone India to its holding company. Periodical interest income was also held chargeable to tax in the hands of Vodafone India.

Sanjay Tolia, leader, transfer pricing at PwC India, said, "It is a welcome judgment as the transaction of issue of shares by Vodafone was nothing but a capital account transaction, and consequently the share premium, if any, ought to be capital receipt. The transfer pricing provisions permit the transaction to be re-quantified but not to be re-characterized. Hence, there was no question of the transaction resulting in 'income' taxable in India. The judgment will not only serve as a precedent in the legal arena but will also lend the much needed boost to foreign investors." Pranav Sayta, tax partner, EY India, said, "The verdict not only spells victory for Vodafone but also holds hope for other companies which are facing a similar dispute. One has to wait and see whether the tax department accepts this order or decides to appeal before the Supreme Court." Shell and two Essar Group companies are among several other MNCs contesting similar transfer pricing cases.

RIL, Punj Lloyd bag defence deals

noreply@blogger.com (Ways2earn) — Wed, 08 Oct 2014 03:08:00 +0000

A small change in foreign investment rules—by doing away with minimum 51% holding by a single Indian entity in a defence venture—has helped Mukesh Ambani's Reliance Aerospace and Punj Lloyd bag licences that they had been waiting for.

While increasing the foreign direct investment (FDI) cap for defence to 49%, the government did away with the clause that had been in the policy for years, as part of a strategy to attract investment in local manufacturing units. In special cases, 100% FDI has been allowed. The earlier rule did not allow Reliance Aerospace to get the licences to manufacture weapon launchers for combat aircraft as the promoters hold 45.3% in Reliance Industries. Similarly, the promoters of Punj Lloyd together have a 37% stake, which restricted a wholly owned subsidiary's ability to bag licences to manufacture torpedoes, rocket launchers and combat vehicle, sources familiar with the development told TOI.

While the government did not disclose any details, an official statement said that a committee had cleared 19 proposals from several large Indian corporate houses — including the Tatas, Mahindra and Bharat Forge — to bag licences for defence manufacturing.

In at least 14 other cases, the government has informed companies that licences are no longer required. These included Tata Advanced System's proposal to manufacture aircraft and spacecraft components, Mahindra Aerostructure, which wants to make parts of aircraft and Reliance Aerospace's flight control system manufacturing plans.

Even before FDI rules were changed, the department of industrial policy and promotion had reduced the number of items in the defence sector that need licences and freed dualuse items, such as radars and aircraft components that have civilian use too, from licensing requirement.

For years, the defence ministry has frowned upon the entry of the private sector into the arena even as it had relied on imports, often involving middlemen. In fact, during UPA's term in office, the commerce and industry ministry's plea to increase the FDI cap for the sector was repeatedly blocked by A K Antony , the then defence minister. In recent months, however, the mood has changed as the department of defence production has backed private and foreign capital in local ventures.

Now, the government is working on further easing the rules, including doing away with annual capacity ceiling in industrial licences and also permit of sale of licensed items to other entities under the control of the home ministry , state governments, PSUs and other valid defence licensed companies without approval.

POLL KHOL SAWAAL A fun clip on election promises

noreply@blogger.com (Ways2earn) — Sun, 05 Oct 2014 03:41:00 +0000

NAMORICA - Modi pledges a stable tax policy to woo US business

noreply@blogger.com (Ways2earn) — Tue, 30 Sep 2014 03:14:00 +0000

`Will Use Coal Scam Order To Clean Up Past'

Prime Miniser Narendra Modi made a powerful pitch on Monday to top honchos of American business and industry , with the promise of a stable tax policy and an assertion that he wants to convert the Supreme Court ruling on coal block allocation into an opportunity to move forward and "clean up the past".

"It is my conviction that tax stability is essential for confidence building," Modi told the chiefs of top US companies over a breakfast meet, among them Google chairman Eric Schmidt, Citigroup chief Michael Corbat, Mastercard CEO Ajay Banga, Pepsico's Indra Nooyi, Cargill's David W MacLennan, Caterpillar's Douglas Oberhelman, Merck's Kenneth Frazier, Carlyle Group's David Rubenstein, and Warburg Pincus' Charles Kaye. He also met CEOs of six other companies, including Boeing, IBM, and GE, in oneon-one meetings.

Modi's comment on a stable tax regime comes amidst severe criticism of the UPA's policies, including retrospective amendments to the law to claim taxes from Vodafone after it acquired Hutch's telecom assets in India. Modi and his team have not shied away from referring to the policies as "tax terrorism".

Asking the CEOs to be part of India's growth story, Modi pledged to smoothen the path for them. "Infrastructu re development is a big opportunity; it creates jobs & enhances the quality of life of our citizens," Modi said.

"India is open-minded. We want change that is not one-sided. Am discussing with citizens, industrialists & investors," the MEA spokesman quoted Modi as saying in a tweet. PM Narendra Modi, during a breakfast meet with industry leaders in the US on Monday, promised a stable tax policy. In the past, tax administration and frequent changes in government policies have been cited as major hurdles to investing in India. In recent years, even Indian business houses have often shunned investing in the country, preferring to go overseas.

The Modi government is keen to revive the investment cycle and is wooing investors, especially in the manufacturing sector, although the PM made it clear last week that the government does not believe in doles and concessions to attract flows into the country. Describing the meeting as "excellent and very good", business leaders said the PM heard their concerns and listed out the government's priority areas. "He answers questions brilliantly and is very focused on improving India. So, we are thrilled to be working with him," Nooyi said.

Mastercard CEO Ajay Banga said Modi can execute plans like he did in Gujarat.

"I have every belief he can do that. I believe then you can have a very good decade or ahead of growth in India and that would make every American investor happy to put their capital, technology and their people into India." Banga said Modi was focused on generating jobs for which there was a need to improve manufacturing, tourism and infrastructure. "His view is that he will get those with clear policies as well as about willingness to execute and he made the point many times over and I think from his perspective of his focus and his energy around Asia," he said.

While Boeing CEO James McNerney, who met Modi separately, promised to "accelerate engagement with India", GE's Immelt said his company is looking to scale up investments. "We discussed India. We are enthusiastic about the changes and the reforms in India and we are anxious to do our part in making India a better place," Goldman Sachs CEO Lloyd Blankfein said.

In a boost to govt, S&P revises India outlook to `stable'

noreply@blogger.com (Ways2earn) — Sat, 27 Sep 2014 03:59:00 +0000

First Such Rating Since Modi Took Over

After years of pessimism on the economy , there were finally signs of positive perception on Friday as Standard & Poor's revised India's rating outlook from `negative' to `stable'. This indicates that there are fewer chances of government and other public sector bonds being treated as junk papers.

The revision is the first measure undertaken by any rating agency since the Modi government took office about four months ago, "Our outlook revision reflects our view that India's improved political setting offers a conducive environment for reforms, which could boost growth prospects and improve fiscal management," S&P said in a statement, which coincided with PM Narendra Modi's US visit, where he will court international investors.

Although India still retains the lowest investment grade rating of BBB+, the news made the rupee gain the most in six weeks and closed 61.15 to a dollar, compared to 61.35 on Thursday . Bond prices too strengthened on expectation that a better outlook may result in higher investment and more dollar flows into the economy .

Besides, it raised hopes of a rating upgrade in the coming months. Finance secretary Arvind Mayaram said the agency is expected to upgrade India's rating in the future."The country is well on a path of faster than anticipated fiscal consolidation and it could be a positive surprise going forward," SBI chief Arundhati Bhattacharya said. But S&P—the only major agency that threatened a downgrade of India's rating in the wake of rising current account and fiscal deficit in April 2012—said it will wait for the economy to grow faster and the fiscal, external or inflation parameters to improve before it decides on an upgrade. It cited at least two constraints—India's weak public finances that may stay weak for some time and low per capita income, which results in a low tax base and gives the government less flexibility in taking dramatic measures during times of economic stress.

The change in S&P's outlook was, however, driven by several factors, which included an improvement in the current account situation on the back on curbs on gold imports as well as India's credit strength, from low level of foreign debt and improved cash availability overseas. The country's "well entrenched democratic political system" and the strong electoral mandate were cited as the third key reason by the agency. "Although the paralyzing effect of legislative gridlock can blunt government effectiveness, our outlook revision indicates that we believe the current government's strong mandate will enable it to implement many of its administrative, fiscal, and economic reforms."

The ratings company said it expected the government to adhere to the fiscal consolidation plan and estimated an improvement in the fiscal performance due to the possible rollout of goods and services tax (GST)--something that the BJP government has identified as a key thrust area.

Sell-off in CIL, ONGC, NHPC may fetch record Rs 46,000cr

noreply@blogger.com (Ways2earn) — Thu, 11 Sep 2014 15:40:00 +0000

Coal India Alone May Match '12-13 Divestment Gains

The government on Wednesday kicked off the most ambitious disinvestment programme ever, aiming to mop up a record Rs 46,000 crore by selling shares in blue-chip public sector companies-Coal India, ONGC and National Hydroelectric Power Corporation (NHPC).

While the exact dates are yet to be finalized, SAIL's disinvestment, which was cleared earlier, is likely later this month, with a 10% stake sale in Coal India expected around Diwali.The energy behemoth will help the government raise around Rs 23,600 crore based on its current share price. If prices hold, this sale alone could match the best ever disinvestment receip ts of Rs 23,957 crore in 2012-13, when the government had sold shares of NTPC and NMDC, among others.

ONGC, where the govern ment can garner close to Rs 19,000 crore via a 5% sale, is expected later in the year as the Centre is awaiting clarity on gas prices before the issue, sources in the government told TOI. Somewhere during the course of the year, it will also sell 11.3% in NHPC which, going by current price, will help generate around Rs 3,100 crore.

Apart from helping improve the government's fiscal health, the issues come with the additional attraction of a higher quota for retail investors as 20% of the sale in case of offer-for-sale, or auction through stock exchanges, will be set aside for small investors.Now, market regulator Sebi has provided additional flexibility for these issues. There are several other companies, such as BHEL, Power Finance Corporation and REC, which are also on the disinvestment department's radar but their stake sale has not been cleared by the cabinet committee on economic affairs. Then, there is Axis Bank, where the government is looking to sell shares held by the Specified Undertaking of the erstwhile UTI, although ITC and L&T, two other prominent stocks, are being retained. The government holds these shares after it cleared all liabilities of UTI. Further, the Centre is looking to offload its remaining shares in Hindustan Zinc and Balco, which had been sold to Anil Agarwal's Sterlite Industries during the Atal Bihari Vajpayee government's term.

Finance minister Arun Jaitley -who attended Wednesday's cabinet meeting within hours of being discharged from hospital -has budgeted for disinvestment receipts of over Rs 58,000 crore during the current fiscal. Going by current trends, he appears to be on course to meet the target.

How to invest in property with Rs 2 lakh

noreply@blogger.com (Ways2earn) — Mon, 01 Sep 2014 12:57:00 +0000

You no longer need deep pockets to invest in property. Find out how Reits will help you participate in the real estate market

If you have Rs 2 lakh to invest, your bank may roll out a red carpet, your stock broker may inundate you with hot tips and the neighbourhood jeweller may even offer a discount on making charges. However, you will probably get laughed out of the estate agent's office.Not anymore. With Sebi issuing final guidelines for real estate investment trusts (REITs), you will soon be able to get a piece of the action in the property market with as little as Rs 2 lakh.

REITs are just like mutual funds, but instead of using the money collected from investors to buy stocks and bonds, they invest in property .Last month, the Union Budget removed an important hurdle by giving pass-through taxation status to REITs. Last fortnight, Sebi issued the guidelines, settling several of the concerns raised by the real estate industry . The launch of REITs will increase the flow of funds to the cashstarved real estate industry . "Even if half of the currently available Grade A office space gets converted to REIT and is listed in the next 2-3 years, it can mean an inflow of Rs 60,000-72,000 crore," says Anuj Puri, chairman and country head, JLL India.High entry barrier Whether you invest in a residential property or commercial space in a metro or tier I city, the minimum investment is normally upwards of `30-40 lakh. Sebi's guidelines for REITs have pegged the minimum investment at Rs 2 lakh, which will allow retail investors to participate in the real estate market. In the secondary market, the minimum holding could be even lower at Rs 1 lakh. "REITs will allow even middle income individuals to invest in real estate. Without this, they can't participate because of the huge entry barrier," says Keki Mistry, vice-chairman and CEO, HDFC. The low ticket size means that investors can diversify their portfolios by including real estate without investing huge amounts in the asset class. The high entry barrier is not the only problem with investments in real estate.With no real estate regulator in place, individual investors are at the mercy of politically connected builders in India. If, however, they invest in a REIT, they will be able to join hands and get bargaining power against the developers.

The other benefit is diversification. When one invests in a real estate project, the returns are dependent on how well that project is received in the market and the rental income it is able to command. On the other hand, REITs invest in several projects and, therefore, provide the benefit of diversification to the investor. With a low entry barrier of Rs 1 lakh in the secondary market when units are listed, an investor can spread his investment across 3-4 REITs launched by different asset managers. The liquidity offered by REITs is another positive feature of this mode. While selling a property can take weeks, even months, REITs will inject liquidity into the investment by listing the units on the stock exchanges. The day is not far when one will be able to buy and sell property at the click of the mouse.How attractive is the investment?
While Sebi has given the go-ahead to REITs, right now they can invest only in commercial real estate. This narrows the scope considerably because most of the action in the sector is in residential real estate. Even in commercial projects, 80% of the investment must be in rent-earning projects. The balance 20% can be in other assets, including projects under construction (restricted to 10% of the total REIT assets), listed or unlisted debt of real estate companies, equity shares of real estate companies having 75% income from realty activities, government securities and money market instruments.

Though some may see this as an unnecessary restriction, the straitjacket of rental yielding projects is actually a blessing in disguise. First, there is major difference between rental yield from commercial and residential properties in India now. "While rental yield on commercial property is slightly lower than the interest rate, the one on residential property is very low. So REITs will not work in the residential market now," says Mistry . If rental yield from commercial projects is less than the prevailing interest rate, why should one consider investing in REITs? "The rental yield is not very attractive now, but is expected to rise in the future," says Ujwala Rao, national director, capital markets, JLL.Besides, there is always the possibility of capital appreciation that will push up the NAV .Bottom of the cycle Still, there are several factors that investors need to keep in mind. As of now, the commercial real estate market is in doldrums. "In several pockets, the price of commercial real estate is around 30% cheaper compared to residential real estate," says Kapoor. Though there is an escalation clause in most commercial real estate projects, it is a users' market and, therefore, they are able to renegotiate the rents downwards. This also means that commercial real estate is reasonably priced right now. There is a greater scope for appreciation. As the economy picks up momentum and commercial activity increases, things are likely to improve. "This is the time to get into commercial real estate because it is at the bottom of the cycle," says Kapoor. Other experts join the chorus of optimism. "For REIT to work, you need a buoyant real estate market. Nothing much had been happening in the past 3-4 years, but things have started picking up now," says Mistry . "Commercial real estate is linked to economic recovery . Rentals may remain under pressure for the next 12-18 months given the oversupply , but with the speed of supply moderating in the coming years, the situation should improve," says Mittal.Taxation of REIT income This was the biggest bone of contention for REITs. The recent budget offered some relief when the finance minister announced that REITs will be a pass-through vehicle. In the earlier structure, both the trust as well as the investors had to pay tax. Now, the trust will not pay tax on income. Only the investor will be taxed when he gets the income or sells the units. However, experts warn that this pass-through benefit is not applicable to all types of incomes from the REIT (see table) "The pass-through benefit is only for interest income earned by the REIT from its special purpose vehicle (SPV). As of now, there is no pass-through for rent or other income received by the REIT from property directly held by it," says Sriram Govind, core member of the international tax team, Nishith Desai Associates. He says the REIT has to pay corporate tax on such income earned by the SPV . Similarly, the REIT will also have to pay capital gains tax on sale of shares of the SPV . There is also no relaxation on the dividend distribution tax on payouts by the SPV to the REIT," says Govind.Though the dividend received from SPVs is taxfree for REIT as well as investors, the SPV would have already paid corporate tax and dividend distribution tax on such income. Factor this tax into the calculation of returns from REITs.

Though the dividend distribution tax is a prickly problem, what more than makes up for it is the treatment of capital gains from the REIT.Since there is a securities transaction tax (STT) on the listed REITs, the long-term capital gains will be tax-free while short-term capital gains will be taxed at a concessional rate of 15%.

However, you need to hold the REIT units for at least three years to qualify for long-term capital gains. In addition, the investor has to pay tax on part of the income received during the period. "The listed pass-through vehicles are at a tax disadvantage," says Feroze Azeez, director, Investment Products, Anand Rathi Private Wealth Management.

Since some of the income from the REIT will be tax-free and some other will be taxable, the big question is, how will investors know the difference? "There will be some reporting mechanism and the break-up will come at the time of income distribution from the REIT," says Rao of JLL.

Interestingly , REITs offer a better deal to NRIs on the tax front. The withholding tax for them is only 5% compared to 10% for resident Indians.And the amount received may be tax-free for them, at least in most countries, while the Indian investors have to pay tax based on their slab rates. If the NRI has to pay tax on the income in the country of residence, he can claim this 5% as a rebate.What are the risks?
The biggest risk can come in the form of developers keeping their prime rent-earning properties and dumping their not-so-good assets on REITs. Though there will be professional valuers, the real estate market is notorious for its opacity . It is still a builder's market and the investors don't have any access to the valuation process. Though the introduction of REITs is expected to improve the situation, the lack of transparency and the black money component in the real estate deals is another possible risk.Finally , there may be stable regular income, but the capital appreciation or depreciation depends on the market price of commercial real estate and, therefore, will be volatile.

Sebi's guidelines for REITs is only the first step. There are bound to be teething problems when the market starts functioning. However, this has paved the way for a more vibrant market for real estate. If you want to invest in real estate but don't have deep pockets, you can consider REITs as the vehicle that can take you there.

CBDT Sets Up High-Powered Panel To Decide Retro Tax Cases (Vodafone)

noreply@blogger.com (Ways2earn) — Sun, 31 Aug 2014 08:39:00 +0000

It may be recalled that in Vodafone International vs. UOI 341 ITR 1 the Supreme Court held that a transfer of shares of an offshore company would not chargeable to tax in India even if all the assets of the company were situated in India. To suprecede the judgement, a retrospective amendment was inserted in s. 9(1)(i) of the Income-tax Act, 1961 by the Finance Act 2012 w.r.e.f. 1.4.1962. The Shome Committee also issued a detailed report on the subject. The CBDT has now issued an Order dated 28.08.2014 u/s 119 of the Act and set up a Committee to implement the said provisions of s. 9(1)(i). The Order provides that if the AO considers that any income is deemed to accrue or arise in India before 1st April, 2012 through transfer of a capital asset situate in India in consequence of the amendments introduced with retrospective effect, he shall shall seek prior approval of the Committee for the proposed action. The Committee is required to examine the proposed action of the AO and, after providing an opportunity to the assessee, take a decision on the proposed action within 60 days. The Committee's decision is binding on the AO

Over 2L flats remain unsold due to demand-supply gap

noreply@blogger.com (Ways2earn) — Wed, 27 Aug 2014 04:41:00 +0000

The unabated demand-supply gap in the residential property market has created a pile-up of 2,13,742 unsold units, according to a Knight Frank India report released on Tuesday . The unsold inventory could take almost three years to sell.

The half-yearly report, India Real Estate Outlook,analyses the residential and office market performance in the Mumbai metropolitan region (MMR) between January and June 2014.

Demand in the region dropped by a whopping 25% during this period in comparison with the same period last year. "Buyers continued to sit on the fence for the most part of H1 2014 in anticipa tion that the new and stable leadership at the Centre would revive the ailing economy ," it said The most expensive location (south Mumbai) accounts for less than 1% of the 4,47,294 under-construction units in the MMR. " A comparison with all other micromarkets in MMR shows that the inventory level in south Mumbai market will take maximum time of 18 quarters (4.5 years) to sell," it said.

Central Mumbai, on the other hand, emerged as a prominent residential market on the back of premium residential and social segment and corporate headquarters from manufacturing, media and consulting sectors. It will take almost four years to clear the inventory that has been in the market for the past nine quarters.

The western suburbs saw a 19% jump in new launches compared to 12% during the same period last year. This belt has an unsold inventory of over three years.

With developers deferring fresh launches, new project completions dropped by 25% in H1 2014 compared to the same period last year.

`1 lakh cr of your money: What’ve banks done with it?

noreply@blogger.com (Ways2earn) — Sat, 23 Aug 2014 15:18:00 +0000

dna exposes one of the best-kept secrets in the Indian banking industry: Fraud cases on the rise

Mumbai: Bank funds of about Rs 1 lakh crore are caught up in frauds or under investigation by the Central Bureau of Investigation (CBI).

But banks are greening their books by selling off bad loans to asset reconstruction companies (ARCs) or by restructuring payments (where the tenure of loan is altered when there is a repayment issue) or plain writing it off to make their balance-sheets rosier.

As on June 30, about Rs 2.54 lakh crore of bank loans turned into bad loans after borrowers defaulted on repayments. Add another Rs 4.46 lakh crore of restructured assets and you have around Rs 7 lakh crore out of the Rs 61.98 lakh crore of bank loans (read depositors' money) that are under stress.

Frauds and vigilance investigations have become commonplace. Depositors' money is getting wasted on operationalising promoters' business plans that are being drawn up to swindle money from banks. Most frauds are staged by dubious businessmen, who are hand-in-glove with corrupt bankers.

Which are the notable frauds reported?

Banks are closely monitoring the Bhushan Steel case (Rs 40,000 crore) while the account has still not turned bad. Kingfisher (Rs 4,022 crore), Deccan Chronicle (Rs 4,000 crore), Zoom Developers (Rs 2,400 crore). Winsome Diamonds (Rs 6,581 crore) and First Leasing Financial (Rs 1,000 crore) are some of the other big cases.

Aren't banks punished?

The RBI recently carried out an independent scrutiny of the loan and current accounts of Deccan Chronicle Holdings and slapped a combined monetary penalty of Rs 1.5 crore on 12 banks for violation of various rules. They were five public sector and seven private banks. While the maximum penalty of Rs 40 lakh was imposed on ICICI Bank, others penalised include Andhra Bank, Axis Bank, Canara Bank, Corporation Bank, HDFC Bank, IDBI Bank, IndusInd Bank, Kotak Mahindra, Ratnakar Bank, State Bank of Hyderabad and Yes Bank.

How do banks report drop in bad loans?

Despite an increase in frauds, many big banks like SBI and ICICI Bank have reported lower bad loans in the first quarter of 2014-15. Banks have sold bad loans of close to Rs 30,000 crore to ARCs till the end of the first quarter ended June 30, 2014. Banks have started selling off loans that are just 60 days due for repayment to avoid an NPA tag on their balance-sheets.

What do ARCs do?

Asset reconstruction companies (ARCs) specialise in recovery of loans or reviving the fortunes of stressed companies. Banks like SBI, ICICI Bank and IDBI Bank together have set up an ARC --ARCIL. There are private ARCs owned by Edelweiss and JM Financial.

How do banks

sell bad loans?

Banks often sell the loans at a discount of 20-40%. ARCs pay 15% of the bad loans in cash and the remaining as security receipts, to be encashed over 8 years. All public sector banks sell loans through an auction process. Private sector banks sell them through bilateral deals.

What is RBI doing

about it?

RBI said in its annual report released on Thursday. The increase in the level of restructured standard advances since 2012-13 reflects potential hidden stress in the quality of loan assets. The improvement in NPAs during Q4 of 2013-14 needs to be cautiously examined in the face of the increased of?oad of loans to ARCs by banks.

Is it planning any concrete action?

The RBI is proposing to cut down bank exposure to companies by half, so that funding to companies is drastically brought down. Tightening norms will help banks in risk mitigation during cyclical downturns.

Modi makes a clean break, ends Plan era, wants to build Team India

noreply@blogger.com (Ways2earn) — Sat, 16 Aug 2014 04:45:00 +0000

PM Makes Strong Pitch To Involve People In National Reconstruction Project Suggests 10-Yr Freeze On All Divisive Issues

Prime Minister Narendra Modi on Friday made a marked break from the past in his maiden Independence Day speech with many firsts --notably by scrapping the Nehruvian vestige, the Planning Commission, and by ending his 65-minute extempore speech with the slogan of "Vande Mataram".

Unlike in the past when prime ministers announced government schemes from the ramparts of the Red Fort on August 15, Modi exhorted countrymen to rise to their full potential, realize their responsibilities and shape their own destinies.

To this direction, he pushed people towards cleanline ss, sought protection of women by urging parents to ensure their boys are raised right, told MPs to create model villages with their MPLAD funds, nudged industry to move towards "zero defect" manu facturing, and asked bureaucrats to stop fighting among themselves and get on with their common task of governance.

Instead of the traditional "mai-baap sarkar" that prov ided goods and services to a passive populace, the prime minister sought to involve the people in a national "cando" reconstruction project. Some of the things that he said sounded repetitive but that was possibly to emphasize their importance in his scheme of development.
On India's fractious politics of caste and religion, he came up with another first -a 10-year moratorium on violence triggered by these divisive issues.

"Let's resolve for once in our hearts, let's put a moratorium on all such activities for 10 years, we shall march ahead to a society which will be free from all such tensions," he said. Modi made a pitch for a sub-continental project to eradicate poverty , saying how that was once issue that dragged India and its neighbours down. While his emphasis on neighbours isn't new, what was new is that he avoided mentioning Pakistan in any adversarial context.

The one big government measure that the Prime Minister announced for the poor was a mega financial inclusion plan as well as an accident insurance cover of Rs 1 lakh. The other big announcement was, of course, the dismantling of the Planning Commission, which would be replaced, said sources, by a new body called the National Development and Reforms Commission which would have active participation from states and whose brief would extend to collaborating with the private sector.

The winding up of the Planning Commission was an important, but not the sole symbol of the change that Modi wants to bring in. As he said, "I am saying from the rampart of the Red Fort that it is a very old system and it will have to be rejuvenated, it will have to be changed a lot. Sometimes it costs more to repair the old house, but, it gives us no satisfaction." Modi's speech reflected his attention to details and his focus on shoring up governance.
But Modi moved beyond his known concern about delivery mechanisms and invoked the need to develop a national character and a sense of national purpose. This was reflected in his call for improving public hygiene standards and building toilet for women and the girl child. He had already moved the issue high on the hierarchy of public concerns, but the speech saw the PM seeking to turn the government goal into a national mission by linking it to the issue of gender justice and dignity of the poor.

For the full report, log on to http:www.timesofindia.com

Chembur resident gets state’s first e-challan

noreply@blogger.com (Ways2earn) — Thu, 07 Aug 2014 02:26:00 +0000

A Chembur resident has become the first person in the state to be issued an e-challan. He was sent the challan for a traffic violation committed in Navi Mumbai, as his vehicle had stepped on the zebra crossing at the NRI Junction, Palm Beach Road. The offence was recorded on a CCTV at the crossing.

Traffic police surprised motorists with a quiet launch of the CCTV-based e-challan system in Navi Mumbai Municipal Corporation's jurisdiction last month. The drive began with Palm Beach Road, where 24 cameras have been installed at nine locations. "We sent 15 e-challans through registered post. CCTV footage is

used to identify the car number and owner using data updated by the transport department,'' said DCP (traffic), Vijay Patil.

"E-challan will improve discipline among drivers," said K L Prasad, police commissioner,

Navi Mumbai. The city has 262 CCTVs and the police commissioner's office has asked the civic body to install another 400.

While the CCTVs capture traffic images in which the vehicle number is identified, the

command centre at the police commissioner's office takes a screenshot and also keeps the video clipping as evidence. An e-challan is prepared and posted with a covering letter from the traffic inspector. While the e-challan includes an image of the vehicle committing the violation, the covering letter provides details of the offence, the location and the option to pay a compounded fine or approach the court. At present, the fine can be paid at the CBD traffic chowky on the Sion-Panvel highway. It has to be paid within seven days from the receipt of the letter or the department forwards the case to the jurisdictional court at CBD Belapur.

"An online payment gateway will be soon be operational. The defaulter can then pay the fine online," added Patil.

"Delhi too has an evidencebased challan. I am sure it will enable greater compliance," said Rajesh Agarwal, the state government's principal secretary (IT), who chaired the CCTV committee.

Entire Backbay may be opened up for development

noreply@blogger.com (Ways2earn) — Mon, 04 Aug 2014 03:18:00 +0000

The Mahim shoreline is not the only stretch in Mumbai to be declared a bay by the state coastal authority , opening it further to construction.
The entire Backbay area, extending from Nariman Point and Cuffe Parade to Girgaum Chowpatty , has also been classified as a bay based on a report by the National Hydrographic Institute in Dehradun.

The shift in nomenclature, effected earlier this year, could create a bonanza for builders in south Mumbai in the months ahead. The state urban development department and the BMC are already grappling with the prospect of seeing large parts of Mumbai's coastline open up to rampant construction due to the process of redefinition. Till 2011, Coastal Regulation Zone (CRZ) norms had restricted construction activity up to 500m from the sea's high tide line. But an amendment in that year reduced the minimum distance for construction activity near a bay from 500m to just 100m, while retaining the old protection for seafronts.

3.5-acre plot freed, P 5 Taking advantage of the change, many Mumbai builders with prime plots near the coast rushed to the National Hydrographic Institute and the Institute of Remote Sensing (IRS) in Chennai. The institutes reportedly certified several areas as bays and marked out the plots as being outside the 100m zone.

The director of hydrography clarified that Backbay has been depicted as a bay on the institute's official navigational charts. Based on this classification, the Maharashtra Coastal Zone Management Authority (MCZMA), earlier this year, green-lighted construction on a 3.5-acre plot in Gamdevi, which earlier fell within the 500m CRZ protection line. The builder is rumoured to be developer Sudhakar Shetty. He could not be reached for comment despite several attempts by TOI.

"The builder got a favourable mention in the minutes of the MCZMA, which put his plot close to Girgaum Chowpatty out of the purview of CRZ," said a source.

Debi Goenka of the Conservation Action Trust said the shorelines in Mumbai could technically be defined as bays. "The problem is with the Union environment ministry, then headed by Jairam Ramesh, which allowed CRZ restrictions for bays to be reduced from 500m to 100m," he said. Architect and housing activist P K Das warned any attempt to dilute CRZ will lead to "development anarchy".

Government sources al

leged the MCZMA was selectively granting environmental clearances to some plots.

As reported by TOI on July 24, the urban development department and the BMC objected to the MCZMA clearing building projects by removing them from CRZ on the basis of the new bay definition. The state government stayed the coastal authority's approvals.

But R A Rajeev, the IAS officer who was removed as state environment secretary (he was chairman of MCZMA) last week, said the authority did not take any controversial decisions. "The MCZMA approved projects based on reports by the hydrographer and authorized agencies of the environment ministry. The authority sim

ply followed their observations on the demarcation of these plots," he told TOI.

"We did not pick and choose cases. Every project was scrutinized. Some were cleared by the Bombay high court," said Rajeev, adding that there were 15 such cases in the pipeline.

A new coastal zone management plan (CZMP) for Mumbai is currently being prepared by IRS Chennai.

Builders whose plots abut Backbay are waiting anxiously to free their plots from CRZ.

"They are hoping the draft CZMP plan would be approved by the National Coastal Zone Management Authority and published accordingly, showing these areas as a bay," said a source.

TIMES VIEW: It's ultimately experts who will determine whether these areas qualify as bays or not. But there is something drastically wrong in the law and the process if a mere change in nomenclature of an area can mean so much of difference in terms of development. Mumbai is already bursting at its seams and can barely provide the infrastructure its residents need; it's imperative the city gets a dose of planned development.

THE WORLD AT YOUR FEET - High income, low tax... House that!

noreply@blogger.com (Ways2earn) — Sun, 03 Aug 2014 04:40:00 +0000

Buy that new penthouse, reap lakhs in tax savings. Here's how the math works

The upside of being a `high-net-worth individual' (HNWI) is that you get a fatter pay cheque than most people.
The downside is that a big chunk of it will be taken away by the taxman. But there are ways of getting around that; in fact you can save a lot of tax by buying a house -as long as you let it out and not live in it.

Kuldeep Kumar, executive director of PricewaterhouseCoopers, says that's because, under Sec tion 24 of the Income Tax Act, you are al lowed deduction of the entire interest payment on your home loan from your taxable income -provided you club the rental income from the house with it.

After the new Budget, home buyers are allowed a deduction of Rs 2,00,000 on interest payment of their home loan. But no such limit exists if you can show your purchase as an investment, and not for personal use. The tax benefit is huge, says Vivek Jain, a senior chartered ac countant. If you are wonder ing how, the math is simple: with interest rates at around 10% per annum and rentals from a residential property hovering around 3% of capital value even in the metros, your actual outgo amounts to about 7% every year. This "net loss" is what you can rightfully claim as deduction from your taxable income.

LOSS IS GAIN

Here's how the calculation works out. Let's say you have an income of Rs 1.20 crore per annum, putting you in the 33.99% tax bracket. You buy a house worth Rs 3.30 crore for which you pay Rs 30 lakh up front and get financing of Rs 3 crore from a bank. At 10% interest rate, your EMI will be Rs 2,89,506. In the first year, your total payout will be Rs 34,74,072 -Rs 29,77,656 as interest payment and the rest towards repayment of principal. Going by market trends, your annual rental income would at most be Rs 11,50,000, or 3.5% of capital value. After deducting 30% as maintenance expense, your net taxable rental income will be Rs 8,05,000 (70% of 11,50,000). Deduct this from the interest amount (Rs 29,77,656) and your "net loss" stands at Rs 21,72,656. This amount will be deducted from your taxable income, reducing your tax liability by as much as Rs 7,38,486.

RETURNS OF RENT

With part of EMI being used to pay the principal, the interest burden will decline with each year; the second year, it will be reduced to Rs 29,25,675.
With rental income rising by , say, 5% during the period, the net loss will come down to Rs 20,80,425 and you get to save Rs 7,07,136 as tax in Year Two.
Interest amounts will fall further but a simple calculation shows that even if rentals keep increasing at 5% CAGR, your income from rent will exceed your interest outgo only in the 15th year.

FLOOR POWER

Buyers who are yet to get possession of their flat stand to gain as well, says Kumar.
The entire accumulated interest payout during the construction period can be claimed as deduction over the next five years once possession is taken.

After 15 years, you can sell the house and reinvest the money in a new one. Of course, you can always invest in more than one property and save even more tax. All it takes is an even fatter pay cheque.

168mn sq ft unsold in Mumbai Metropolitan Region

noreply@blogger.com (Ways2earn) — Fri, 01 Aug 2014 03:00:00 +0000

Read83Time(s)

Mumbai Metropolitan Region (MMR) has an unsold inventory of 168 million sq ft. These apartments will take 45 months to sell, a large time lag considering it should not take more than eight months to a year. The data comes from the latest Liases Foras report released on Thursday .

"This huge unsold inventory is a clear indication that buyers cannot afford high property rates,'' said Pankaj Kapoor, head of this real estate research firm. MMR comprises Mumbai, Dahisar to Virar, Thane, Navi Mumbai, Dombivli, Kalyan and Diva as the main centres.

The weighted average price in MMR is Rs 13,012 a sq ft, which was hovering around Rs 12,748 a sq ft in the last quarter. The report also revealed that sales dipped by a marginal 2% from the last quarter.

Most new projects launched in the present quarter had a price tag of over Rs 2 crore for an apartment. "We predict prolonged inefficiency, prices have to reduce for demand to increase. Sales won't improve till prices reduce,'' said Kapoor. Earlier, prices increased 7-8% per quarter.
"This is not happening now.
It's a stagnant situation,'' he added.

"The year 2014-15 began on a rather muted note with a 9% sequential decline in area sales across six major cities in India. With an exception of Bangalore, all tier I cities have shown a drop in sales. The city registered a 10% growth in sales for the quarter,'' said the report.

NCR led with a 20% decline, followed by Chennai and Hyderabad with 18% and 13%. MMR, however, was almost stagnant with a meagre 2% drop in sales.

For the first quarter of 2014-15, sales in Bangalore have been the highest, followed by NCR and Pune.
"Most sales in the city can be attributable to new launches in peripheral regions. But the performance in the secondary market has been average in the city,'' it added.

The cost range for new launches has been fragmented across the cities. In NCR and Pune it has been the affordable segment, while in Bangalore it has been the mid-segment. At the same time, MMR showed increased level of activity in the affordable and ultra-luxury segment.

63-yr record: Santa Cruz got 1,469mm rain in July

noreply@blogger.com (Ways2earn) — Fri, 01 Aug 2014 02:03:00 +0000

24-Hr Torrent Adds Month's Water Stock

July has brought record rainfall for Mumbai and considerably reduced concerns about the extent of water cuts the city may have to face in the next one year. The rainfall for the month in Santa Cruz--1,469mm--has been the highest for July since 1951 and has surpassed even the 1,454mm recorded in 2005, the year of the 26/7 deluge.

In June, Santa Cruz had received only 87.3mm rainfall, the lowest in 63 years, forcing the BMC to impose a 20% water cut. The heavy rain in the past 24 hours itself (July 30-31) has given the city more than 30 days of water stock as the catchment areas have accumulated 1.16 million litres.
With the showers on July 2930 having added 50 days of stock, Mumbai now has water stock for over six months.

Within a week, the catchment areas have seen a 100% rise in stock. While the stock in the seven lakes that supply water to Mumbai was 3.33 lakh million litres on July 25, it rose to 8.03 lakh million litres on July 31.

The BMC, which has now halved water cuts to 10%, may cancel the cuts altogether if the good rainfall persists.

However, heavy rain affected railway services and threw road traffic out of gear.

Fourteen CR services-four of them on the Harbour line--were cancelled due to water-logging and signal failure. Trains were running at least 25 minutes late on the main CR line till late night.
Trains on the Metro network, too, ran late by 15 minutes.

Heavy traffic jams were reported at Sion, Wadala, Mulund, Kanjurmarg and parts of central Mumbai, and the Bandra-Worli sea link saw a major snarl at 10.30 am. On the Mumbai-Nashik highway, a major crack on the new Kasara Ghat road resulted in traffic being affected for some time.

Two drowned, one killed in landslide

Two men drowned in separate incidents in the city on Thursday, while a six-year-old boy was killed in a landslide in Chembur. Rafiq Shah (17) drowned after he went for a swim in the Versova beach in the afternoon, and Khalid Ansari, a Bhiwandi resident, drowned in the local Nadi Naka river, where he had gone swimming. Six-year-old Ganesh Kurade was killed early Thursday morning when a landslide flattened six shanties near Ashok Nagar in Chembur. Two other residents of Ashok Nagar suffered minor injuries.

Weathermen expect 90-95% of rainfall in Aug, lakes and dams inch towards overflow mark

noreply@blogger.com (Ways2earn) — Wed, 30 Jul 2014 06:39:00 +0000

A heavy downpour in the 24 hours between Monday and Tuesday added 32 days of water stock to the seven lakes supplying the city. The lakes now have four months' supply. Also, not only has the season's rainfall deficit been covered but Santa Cruz has got excess rainfall of 78.1mm and Colaba 101.5mm. Weather men have issued a warning of very heavy rainfall-from 7cm to 14cm--in the next 24 hours. Some parts of Thane and Konkan districts may get as much as 24cm.

Between Monday and Tuesday , though, the island city got just 48.3mm and Santa Cruz 26.6mm.
On the other hand, the Vasai-Virar region, Palghar, Dahanu and tribal belts of Jawahar and Mokhada got 176mm, which saw villages get cut off from the city and flooded important roads and residential townships such as Vasant Nagri, Evershine Nagar Nirman Nagar.

The Vasai Virar municipal fire brigade rescued villagers stranded along the highway in Virar. A 10-year-old boy was reportedly carried away by strong water currents in Palghar.

Pelhar dam in Nala Sopara that supplies Vasai-Virar began to overflow. Usgaon dam in the Vasai-Virar region reached 86% of its capacity . Damni dam on Surya river in Palghar also began to overflow.

Water stock in the seven lakes that feed the Mumbai region swelled to 4.9 lakh million litres on Tuesday from 3.7 lakh million litres on Monday .
Tansa and Bhatsa gained the most, 276mm and 247mm, respectively , compared with 66mm and 45mm between Sunday and Monday . Modak Sagar is 3 metres below the overflow mark and Vihar is 4 metres short.

"Bhatsa and Modak Sagar, which have a huge capacity , received widespread rainfall of 247mm and 216mm, respectively . Tulsi is much smaller, which could be why it overflowed. Interior parts of Maharashtra received moderate rainfall while it was fairly widespread in north madhya Maharashtra. The south-west monsoon has been very vigorous on account of an offshore trough as well as strong winds. We expect 95-96% of rainfall in August, of the long-range forecast," said K S Hosalikar, deputy director general meteorology , Regional Meteorological Centre, Mumbai.

Navi Mumbai, between 7am to 7.30pm, got an average rainfall of 50.6mm. Airoli recorded the highest of 63mm followed by Vashi with 50mm, Nerul with 43mm and Belapur 44mm. Morbe dam capacity increased to 77.9 metres from Monday's 76.4 metres.

Thane got a total of 55mm rainfall. There was one inci dent of wall collapse at Wagle Estate and one person was reported missing while swimming inside a lake at Kalwa.

The downpour brought down minimum temperatures in Colaba to 24.8 degrees Celsius and Santa Cruz to 25.7.

On Tuesday , between 8.30am and 8.30pm, Colaba recorded 11.6mm rainfall and Santa Cruz 45.3mm. The is land city and the suburbs have received more than 50% of the season's required total.

Meanwhile, traffic was comparatively smooth on Tuesday , as it was a public holiday. There some stretches, though, like the Western Express Highway which continued to witness snarls.

The cratered flyover at Malad on WEH caused backlogs around noon. "The northbound stretch of Pedder Road was jammed around 3 pm. The stretch before Mahalaxmi signal was particularly bad," said another motorist.

Slow-moving traffic was reported from Babulnath to Haji Ali, on S V Road opposite Juhu Aerodrome, Vasai, near Huma Adlabs at Kanjur Marg, Aarey flyover on WEH, near Dahisar check naka and near Dindoshi on WEH.

A tree fall threw traffic out of gear at near Hiranandani Junction at Powai.

Heavy water logging was reported at JVLR, Andheri Link Road, Kanjur Marg, L B S Marg near Gandhi Nagar, Sujay Hospital at Andheri East, Andheri Subway and Marol Naka to WEH.

State govt makes conversion of agricultural land simpler

noreply@blogger.com (Ways2earn) — Thu, 17 Jul 2014 04:12:00 +0000

In a move that could boost development in Maharashtra, the state cabinet has simplified the process to convert agricultural land in cities and towns into nonagricultural land. The owners of these plots will no longer have to take prior permission of the collector for the conversion if the plots are earmarked in the region's devel opment plan for residential townships or industrial units.

The collector's nod, which was so far mandatory, had given rise to complaints of undue delays and corruption. The move will pare both, officials said. By rough estimates, tens of thousands of hectares will be unlocked because of the cabinet's Wednesday decision. The state cabinet decision to simplify conversion of agricultural land for non-agricultural use will benefit the municipal corporations and councils in Mumbai, Thane, Navi Mumbai, Kalyan-Dombivli, Ulhasnagar, Vasai-Virar, Nalasopara, Ambernath, Kulgaon-Badlapur, Panvel, Alibaug, among other places.

"Land owners will have to seek the permission of the municipal body for their non-agricultural plans.
Once the municipal corporation or municipal council gives the go-ahead, the owner just needs to intimate the collector within 30 days. No permission from the collector is required. Revenue officials will then recover a onetime land conversion tax and a non-agriculture cess," said an official after the state cabinet approved the move.

This process will apply to those who are direct owners of the land. For those who have leased land from the government, the collector's permission is still required, though the conversion procedure has been made simpler for them as well. "The leaseholder will have to offer a certain share of the profitable deal on the land to the government," said an official.

According to sources, masses of application for In rural areas, a databank will be created to speedily dispose of the masses of land conversion applications land conversion to non-agricultural use are pending, particularly in Mumbai region and around, stalling development. In rural areas, where there are no municipal corporations or councils, revenue officials will now be asked to create a databank of conversion applications, so that decisions can be made quickly , another official said.

Affordable housing to become cheaper

noreply@blogger.com (Ways2earn) — Wed, 16 Jul 2014 06:42:00 +0000

Home loan seekers will soon find themselves being increasingly wooed by banks, and affordable housing projects could get cheaper with the RBI announcing a raft of measures that encourage bank lending to this segment.

The RBI has said that in addition to small-value loans, home loans to individuals up to Rs 50 lakh (for houses of value up to Rs 65 lakh) in metros and loans up to Rs 40 lakh (home value Rs 50 lakh) in other centres will be considered as affordable housing.
Extending these loans will entitle banks to float infrastructure bonds up to seven years. Money raised under these bonds will not be subject to RBI's mandatory reserve requirements. Bankers said that they were preparing for a pick-up in home loans in light of the increase in tax breaks from Rs 1.5 lakh to Rs 2 lakh. "The infrastructure status to affordable housing projects would make it easier for developers to get finance. Banks in any case were going after home loans given the absence of pick-up in corporate credit," said K R Kamath, chairman, Punjab National Bank.

He added that banks also prefer home loans because these are less risky as the lending is diversified and also provides them an opportunity to cross-sell other services to borrowers.

"The measures make home loans more attractive but I do not know to what extent it will impact rates as most banks are already extending home loans close to their base rate," said Kamath. Base rate is the benchmark rate below which banks are not allowed to price their loans.

The finance minister in the Budget had said that banks would be allowed to float long-term bonds for lending to infrastructure.
Explaining the rationale to extend this facility for hous ing, the RBI said "Apart from what is technically defined as infrastructure, affordable housing is another segment of the economy which both requires long-term funding and is of critical importance. Accordingly , the Reserve Bank intends to ease the way for banks to raise long-term resources to finance their long-term loans to infrastructure as well as affordable housing. This will help promote both growth and stability , as well as improve the supply side."

The RBI said that granting the exemptions will mitigate the asset-liability management (ALM) problems faced by banks in extending project loans to infrastructure and core industries sectors. "A collateral benefit if bank bond issuances prove successful is the development of the domestic corporate bond market," the RBI said.

Prime 5.3-acre Prabhadevi plot freed from CRZ norms

noreply@blogger.com (Ways2earn) — Fri, 04 Jul 2014 03:11:00 +0000

Builder Gains As State Dubs Mahim A Bay

A developer of a prime Prabhadevi plot is the first major beneficiary of the state coastal authority's intriguing redefinition of the Mahim shore as a bay. The reclassification has virtually pulled builder Hubtown's 5.3-acre land out of the highly-restrictive coastal regulation zone (CRZ), unlocking its full development potential.

CRZ norms restrict construction activity up to 500m from the sea's high tide line. But the rules were qualified in an amendment three years ago. The amendment stipulated that seafronts would continue to get the same protection, but at bays the construction restriction would be reduced from 500m to just 100m. When the Maharashtra Coastal Zone Management Authority (MCZMA) redefined the Mahim coast as a bay earlier this year, the builder quickly submitted a proposal to get its plot removed from CRZ and the 500m protection ring. Hubtown backed its application with a report from the Institute of Remote Sensing (IRS) in Chennai, showing the plot almost outside the 100m zone of the Mahim coast.

The builder's proposal "convinced" the authority , which approved it in a meeting in May end. "The IRS report shows a part of the plot in CRZ and a part outside it. The actual demarcation has been done by IRS.
The coastal authority accepted the IRS report and decided the CRZ status accordingly ," said a state environmental department official.

Officials said this is the first big instance of development enabled by the redefinition of Mahim as a "bay". In the wake of Mahim coast's reclassification as a bay—where environmental protections are weaker—government officials expect a rush of applications from builders across the city whose plots fall under coast regulation zone (CRZ).

Hubtown had purchased the defunct Hindoostan Mills in Prabhadevi for Rs 350 crore in 2007, but was unable to utilize the full development potential because of CRZ restrictions. Last year, chief minister Prithviraj Chavan cancelled an abnormally high floor space index (FSI) of 7.6 sanctioned by his predecessor for a hotel project on the property. The developer was eventually left

with a much-reduced FSI of 1.33 because of the CRZ restrictions.

Several of these impediments have got lifted because of the MCZMA's decision on Mahim coast. The plot was earlier reserved solely for industrial use and its status could not be changed to build residential buildings as it fell under CRZ. But now that it has been taken out of CRZ, its reservation can be changed for residential purposes.

Also, with the plot virtually removed from CRZ, the builder can now procure additional construction rights under the government's public parking policy. The state provides extra FSI to any builder who builds a public parking facility on a part of his land free of cost for the civ

ic administration.

Vimal Shah of Hubtown said the builder's immediate plan was to utilize the base FSI of 1.33 to build a residential complex instead of a hotel.

"It is shocking that environmental agencies are allowing builders to reduce the extent of the CRZ belt from 500 metres to 100 metres," said Debi Goenka, executive trustee of the Mumbai-based Conservation Action Trust.

"Unlike creeks and estuaries, the entire frontage of the bay is impacted by wave and tidal action twice a day.

Therefore the logic that was used to reduce the width of the CRZ along creeks from 500 metres to 100 metres obviously cannot be applied to bays," said Goenka.

Pay At Least 100% More For Your Rail Pass

noreply@blogger.com (Ways2earn) — Sat, 21 Jun 2014 04:25:00 +0000

LIFE IN CITY WILL BECOME EVEN COSTLIER WITH UNPRECEDENTED SUBURBAN FARE HIKE On Some Routes, It's Set To Treble

Less than two months after voting overwhelmingly for the BJP-Sena alliance in the Lok Sabha elections, Mumbaikars got the shock of their lives on Friday when the new government doubled--in some cases, trebled--prices of suburban railway season tickets.
The hike, effective from June 25, comes just weeks before the railway budget will be tabled in Parliament.

More than half of Mumbai's population commutes by train. Western Railway ferries 35 lakh commuters every day and Central Railway 40 lakh, making for a daily total of 75 lakh commuters, in a city with a population of about 1.4 crore. Nearly 55 lakh of these commuters hold season tickets.

The unprecedented increase will be severe: some of the fares, released by officials, indicate that season ticket fares may soar nearly three times on some routes. The worst-hit will be commuters staying in the extended suburbs of Thane, Borivli, Kalyan and Virar.

Railway officials, however, argued that suburban fares are highly subsidized and the rise would partially offset their losses. WR records an annual loss of Rs 88 crore and CR Rs 571 crore.

The hikes in daily ticket fares are not as high; first-class fares have risen by between Rs 5 and Rs 20. Second-class daily ticket prices have been left unto uched except for the CST-Kalyan fare, which increases by Rs 5 (from Rs 15 to Rs 20).

Apart from the 14.2% hike in fares across all classes, the Railway Board has also decided to tweak the system of calculating season ticket fares. A Railway Board official said, "The fare for the monthly season ticket was calculated on 15 single journeys per month. However, from June 25, commuters would be charged for 30 single journeys per month."

A railway official said, "Back-of-the-envelope calculations show that the CST-Thane or Churchgate-Borivli first class season ticket holder will have to shell out Rs 1,310 per month against Rs 655 earlier. A monthly first class season ticket for Ka lyan, Vasai or Virar (from CST or Churchgate) would cost around Rs 2,000."

An average commuter staying between Mira Road and Virar or Kalwa to Badlapur-Ambernath will have to pay more than his monthly society maintenance bill. Karan Nayak, a resident of Dombivli, said, "I have a monthly maintenance bill of Rs 1,200 but the season ticket would now cost me Rs 1,900. I will have no option but to switch to travelling by second class."

A railway official said that the suburban operating ratio of CR and WR stood at 194% and 191%, respectively , for the year 2012-13. e said, "We have spent H crores on upgrading the suburban system through MUTP-I and II. That money has to be recovered to ensure that there are enough funds in the railway's kitty to undertake expansion and modernization projects."

An MRVC official justified the hike on the grounds that season ticket holders are paid conveyance by their employ ers. He said, "Why should we subsidize a person by charging only for 15 journeys when he is undertaking more than thrice that number per month?" TIMES VIEW: This paper has consistently argued against politically opportunistic, populist measures that end up hurting the economy in the long run. We believe that while governments need to subsidize the supply of what economists call `public goods and services' (could be anything from health and education to fuel and transport), especially for the weaker sections of society, pricing of such goods and services shouldn't be completely out of line with the realities of the market. Given the state of the railways' finances, a fare hike was perhaps unavoidable (although we believe we are being made to pay for inefficiency, waste and corruption).

But what Mumbai's commuters face is an increase of unconscionable proportions. It's a crushing burden, especially when one considers that the suburban network is the lifeline of this city, transporting more than half its population every day.
Millions of them are poor -they travel not for pleasure, but to eke out a living. Where will they overnight find the money to pay double and treble the existing fare? It'll only encourage ticketless travel. The government needs to reconsider the extent of the fare increase.

Metro wins over office-goers with speed & comforts

noreply@blogger.com (Ways2earn) — Tue, 10 Jun 2014 03:24:00 +0000

Commuters Say They Will Switch Permanently To New Ride In Town

The Mumbai Metro appears set to become one of the mainstays of the city's transporta

tion complex, a distinction that the suburban rail network has held for decades but the Monorail could not achieve.
An estimated 3 lakh commuters used the Metro on Monday , its second day of operation.
Among them were joyriders, but the bulk consisted of office-goers, many of whom, pleased by their comfortable commute, decided not to return to their old modes of transport.

an IT professional whose office is in Chakala. "Every day , I used to either take a bus or an auto from Vikhroli to Andheri. Now, I can go to Ghatkopar station, take the Metro and reach my destination in less than 15 minutes. This is amazing."

Similar delight was expressed by others. Vaibhav Yadav, a 25-year-old film editor who travels regularly from Ghatkopar to Andheri, said till last week he went to Dadar by train, crossed over to Western Railway and caught another crowded train for Andheri.
"The worst part was waiting at Andheri station for a bus to Lokhandwala Complex." On Monday , Yadav saved more than an hour as he reached D N

According to the Mumbai Metro One Private Ltd (MMOPL), about 2.2 lakh passengers used the Metro by 7pm on Monday . Extrapolating from the figure, the service operator estimated that the ridership at day's end is likely to be around 3 lakh. On Sunday , about 2.4 lakh passengers had tried the service, which, according to the MMOPL, was the highest first-day ridership of all metro projects in India.

An MMOPL official said, "Although many joyriders came on Monday , the bigger share was commuters who had switched over from road transport." He added that 40,000 smart cards were sold on Day 2, indicating that the Metro is already building a base of regular commuters. "The response is encouraging. We are confident of meeting our targets."

The system is designed to handle 7 lakh commuters a day .

Many passengers heaped rich praises on the comfort of Metro travel. "This is the best and fastest way to move between eastern and western suburbs," said Ajit Panigrahi,

Nagar in under 20 minutes and took an auto to Lokhandwala.
"This is the cheapest mode of travel. And given the city's sultry weather, the air-conditioned journey is a real boon for Mumbaikars," Yadav said.

Ravi Singh, who commutes daily from Andheri station to his office in J B Nagar, said he will now forsake his usual BEST route number 340. "The bus goes under the Metro and uses the same route from Andheri to Ghatkopar. Since the Metro is faster and cheaper, I will prefer that," he said.

Samrat Teli (33) described the Metro as "the smartest way to travel".
"It will be very popular among young officegoers. If you want to save time, this is the best alternative. Also, it is a pleasant experience to travel in these new coaches." Teli, who goes from Badlapur to Andheri for work, said the large stations, escalators and the staff left a positive impression on him.

Green nods go online with time limits

noreply@blogger.com (Ways2earn) — Fri, 06 Jun 2014 05:45:00 +0000

The government on Thursday kicked off online environment clearances for industrial and infrastructure projects which have for long been hobbled by the slow pace of green approvals.

As part of the transition to an e-window mechanism, for the next three weeks, project developers will be required to submit a hard copy of the application besides filing it online. From July 1, the system will be fully online, environment and forests minister Prakash Javadekar said.

There will be a time limit for the entire approval process, with stage-wise timelines.

"Efforts will be made to bring down the timelines for each stage," he said.

The e-clearance mechanism is the first in a series of online approvals that the government proposes to put in place. In the next stage, forest clearances will be made online and work has begun to give mining-related approvals also through the same route.

The environment ministry had initially planned to have a common platform for state and the Centre for green clearances. The online mechanism will now deal with approvals given by the Union ministry and its related offices. The government has not launched the system of "deemed approval" either, which will mean that a clearance will be granted if no objection is raised within the stipulated timeframe. This is expected to be in place in the coming months.

The Centre is looking to work with the states to ensure that the process at their end is completed on time so that the environment ministry can grant clearance within a maximum of 60 days, an official said.

There will also be a penalty provision if a delay at any stage remains unexplained. Though this provision is yet to be codified, the ministry appears firm on introducing this clause as early as possible. The move will not just remove physical interface but also enable the government to track an application more effectively and identify "tables" on which proposals are held up. For the past few years, the environment ministry has come to be seen as the biggest stumbling block in project approvals and has been criticized for delays in power, port, road and other projects.

"This step is a beginning of transparency in governance and better functioning of the ministry. One need not visit the office but submit their proposals online," said Javadekar, while addressing an event to celebrate World Environment Day .

The new system, which monitors stage-wise approval and compliance mechanism, will ensure security of information while simultaneously maintaining transparency in dealings between the ministry and the applicant. An applicant, under the online system, will be able to monitor stage-wise process of their application. After basic verification, a password will be generated in four days time and the applicant can check the progress online.

Sensing that only the change of system is not enough to realize the twin objects of growth and environmental protection, the minister wants to see a change in mindset of his `babus' and ropes in the motivational trainer and author Shiv Khera to lecture them during a half-day leadership motivation conference on Friday .