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2017 In Retrospect: Realty faces slowdown, up for recovery post RERA

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Real Estate Sector
Under-construction skyscrapers. (File Photo: IANS)

By Bappaditya Chatterjee

Kolkata : The real estate sector, which witnessed a slew of policy measures through the year, experienced a market slowdown but the affordable segment emerged as its growth driver, say property consultants and developers.

The policy reforms, however, promise to make residential real estate dealings more transparent than ever before and the market is expected to see at least a partial recovery in 2018 on the back of revived confidence of home buyers, fewer new launches, improving sales and declining unsold units.

The Centre’s surprise demonetisation announcement late last year was a “real shocker” for the sector. But, simultaneously, it helped the sector to resist unaccounted funds from finding their way into the secondary and even primary sales segments as well as the luxury housing section.

Meanwhile, the Real Estate (Regulation and Development) Act (RERA) was rolled out to improve financial discipline, boost market transparency and give consumers confidence and a clear legal choice for dealing with errant developers and brokers. The Goods and Services Tax (GST) was introduced to improve taxation transparency and the Benami Properties Act got further amended to make it more effective in curbing anonymous real estate transactions and ownership.

“There were reforms galore which literally altered the DNA of the Indian real estate business, focusing on eliminating black money and improving market transparency so as to make the country’s residential real estate a better place for consumers and investors,” Anarock Property Consultants’ Chairman Anuj Puri told IANS.

Real Estate Sector

Greater Noida: Under-construction skyscrapers in Greater Noida. (Photo: IANS)

National Real Estate Development Council Vice Chairman Parveen Jain said all stakeholders adopted a wait and watch policy following the note ban and introduction of RERA and GST.

“This resulted in a somewhat slowdown in the sector as everyone was trying to understand the after-effects of demonetisation and the effects of RERA and GST. No one is willing to venture into new deals until and unless things settle down,” Jain told IANS.

GST, applicable to the purchase of homes in under-construction projects, prompted home buyers to either buy completed projects or hold back their purchase decisions. Also, developers halted sales in projects not registered under RERA across major cities, JLL India CEO and Country Head Ramesh Nair said.

“These factors led to a quarterly sales decline in five of the top seven cities to an all-time low of 4.8 per cent in the third quarter of 2017,” Nair told IANS.

Residential launches up to the third quarter of 2017 saw a decline of 33 per cent compared to the same period in 2016. Simultaneously, affordable housing saw a rise of 27 per cent in the first three quarters, mostly by taking advantage of the new government regulations and incentives for homes in that category.

“Affordable housing is an attractive proposition both for developers and consumers as the demand is huge and largely unmet. The high focus of the central government has resulted in the availability of more funding options for the developers such as ECB, FDI and debt-financing from national financial institutions at highly competitive rates,” Cushman & Wakefield’s Senior Director, Research Services, Siddhart Goel told IANS.

However, the flip side is the implementation RERA by the states. As per the central government schedule, by the end of July 2017, all states should have implemented the RERA with full functionality.

“Many states are still either in the process or don’t have requisite infrastructure. Dilutions in a few RERA rules by a some states, has also hurt buyer confidence,” Knight Frank Chief Economist Samantak Das told IANS.

According to an ICRA study, by the close of third quarter of 2017, most of the major states had notified their real estate rules and set up real estate regulatory authorities as required under the RERA Act. While new project launches have remained subdued even after RERA implementation, the developers continue to push sales in ongoing projects, with expectations of improved customer confidence in those projects which are approved by the state RERA.

However, the inclusion of land and real estate (completed properties) under the ambit of GST has been a topic that has been debated significantly and will ultimately require a political solution since land is a state subject and any such move will require the concurrence of state governments.

“Any such move could bolster the transparency and compliance of real estate transactions (especially in the secondary market) since there would be an incentive to report transactions at market price to claim full tax benefit,” said Shubham Jain, Vice President and Sector Head-Corporate Ratings, ICRA Limited.

The industry is expected to somewhat stabilise in 2018 as both real estate developers and customers become attuned to the changed regulatory scenario.

Developers are likely to take a cautious approach as far as new project launches are concerned, given the over-supply situation in various markets, along with their own stressed balance sheet positions.

The focus is likely to remain on liquidation of existing stock and reduction of the debt overhang before new projects are launched. This is already visible from the trend of decreasing quantum of absolute stock of unsold inventory available with the developers.

IANS

India

India shouldn’t replicate China’s urbanisation models: NITI Aayog VC

Given India’s diversity, it cannot afford “inequitable and unbalanced urbanisation, said Niti Aayog VC Rajiv Kumar

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Rajiv Kumar

Instead of replicating foreign models that may lead to inequitable and unbalanced urbanisation, India needs to create growth hubs across the country, NITI Aayog Vice Chairman Rajiv Kumar said on Thursday.

Given India’s diversity, it cannot afford “inequitable and unbalanced urbanisation”, he said.

“It’s unfortunate that we continuously look for foreign models…

We cannot let India replicate what China has done,” Rajiv Kumar said during the national workshop on “Municipal Finance and Effective & Accelerated Implementation of Smart Cities” here.

He said that development in China had happened only along the coastline whereas other areas had remained backward, forcing millions of people to move inward to their homelands during the Chinese New Year and India cannot have millions of people moving from one part of the nation to the other on festivals like Diwali or Holi.

“To minimise the presence of dualistic structure and to connect villages with all the urban facilities, we need to introduce the concept of ‘rurban’,” he said.

“In order to empower our cities, we need economic-political legitimacy, technologically smart solutions and intellectual legitimacy,” he added.

“Unless we make our cities generators of India, we won’t get intellectual legitimacy.”

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Skilling enterprises, start-up developers key to India’s digital dream: IBM

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With digital transformation comes the daunting task of preparing a workforce for technologies like Big Data, Cloud, Artificial Intelligence (AI) and Internet of Things (IoT) that can address the massive demand coming from governments and businesses in India.

According to a top IBM executive, the time is ripe to start the journey right from schools and universities, leading to up-skilling and re-skilling the enterprise and start-up developers’ community in the country.

Between 2010 and 2030, India’s working population is expected to expand from 750 million to almost one billion.

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“Without adequate education and training, such population growth poses an increased risk of the emergence of a growing class of under or unemployed. Skill is emerging as the new currency across businesses globally and in India,” Seema Kumar, Country Leader, Developer Ecosystem and Start-ups, IBM India/South Asia, told IANS.

“We believe the industry is no more bifurcated into blue-collar and white-collar jobs. The ‘new collar’ job community is embracing technology rapidly, forging deeper relationships with ecosystem partners and acquiring ‘in-demand’ skill-sets,” Kumar emphasised.

Sensing the urgent need to build a talent pool for the future, IBM recently announced a collaboration with the Telecom Sector Skill Council (TSSC) to spur emerging technology skills in the domestic telecom industry.

The agreement outlines a roadmap to build capabilities in the areas of information and communication technology (ICT) to provide the required and relevant skills for the telecom Industry.

“This collaboration will provide an opportunity to students and young professionals to get skilled in emerging technologies including Big Data, Cloud Computing, IoT and mobile applications that have a huge potential in the telecom sector,” Kumar said.

IBM’s student developers’ programme (career education) that infuses software capabilities that are industry specific and market relevant has helped more than 24,000 students and faculty members develop industry-relevant software capabilities.

Developers are the new marketers and decision-makers across organisations and it has become imperative to make them the centre of the core strategy.

“We also have collaboration with US-based Galvanize and Coursera to offer cognitive and Cloud curriculum to developers to help them equip with new age requirements around data science and Machine Learning (ML), etc,” the IBM executive said.

In 2017, IBM organised “IBM DeveloperConnect Roadshow” in Mumbai, Bengaluru and Hyderabad where it offered day-long workshops that combined technical sessions and hands-on activities, led by technical experts from IBM around data science, ML and Cloud.

“We are going to organise the ‘IBM Code’ day for developers in Bengaluru on February 14 which is another step towards introducing the developer community to IBM technologies,” Kumar told IANS.

IBM also has an online learning platform Cognitiveclass.ai that offers several online courses in the area of data science, AI, big data and Blockchain.

“We also work with external Edtech partners who offer structured courses and curriculum based on these technologies. For instance, Jigsaw Academy is leveraging the IBM Data Science experience platform and CognitiveClass.ai to offer advanced customised learning to students and professionals on data science,” Kumar noted.

Similarly, GlobalKnowledge is a training partner offering detailed courses on Cloud and cognitive development, also enabling professional certifications in these domains.

“Today, we are witnessing start-ups adopting Cloud at a fast pace, looking at creating enterprise class solutions and use best practices at a competitive cost, more agile systems and greater efficiency,” Kumar said.

IBM Cloud Private is an integrated Cloud platform built on a Kubernetes-based container architecture.

It is a pre-packaged offering with enterprise-grade content, bringing Cloud native environment to Private Clouds so that start-ups can maintain control over core data while giving developers the flexibility to easily update and launch new apps in a secure manner.

“We foresee start-ups in the FinTech, e-commerce and HealthTech space leveraging IBM Cloud Private for on-premises software portfolio or easily integrate next-generation data and software optimised for Cloud,” Kumar added.

By : Nishant Arora

(Nishant Arora can be contacted at [email protected])

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Delhi’s first automated vehicle fitness centre to start this month

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automated vehicle fitness centre

Delhi’s first automated commercial vehicle fitness testing centre will be opened during the current month, Delhi Transport Minister Kailash Gahlot said.

All commercial vehicles, including buses, taxis, autorickshaws, heavy and light commercial vehicle, among others, have to undergo testing and get a fitness certificate.

The testing centre at Jhuljhuli of west Delhi would be better compared to visual inspection currently done at the testing facility in Burari of North Delhi, according to officials.

New commercial vehicles have to be tested and also every year after the first two years, for the vehicle’s overall performance and its condition.

“For the past one month, we have been doing fitness testing of school buses and AITP (All India Tourist Permit) buses at the Jhuljhuli centre on a pilot basis,” Delhi Transport Department Special Commissioner K.K. Dahiya told IANS.

The testing of different parts of a vehicle like brakes and headlights will be done by machines and a test result would be generated.

Dahiya said that the new centre would take pressure off the only vehicle fitness testing centre in Burari.

The Jhuljhuli centre, set up in three acres of land, is a joint venture between the Union Ministry of Road Transport and Highways and the Delhi government.

Dahiya said that the Burari centre will continue to function and they plan to automate the centre by the end of the current year.

A Transport Department official told IANS that the automated centre would end corruption as it would not be up to the inspecting officer to give the fitness certificate and the whole process would be more transparent.

“If the vehicles are in a better condition it would also decrease road accidents,” the officer said.

According to officials, the drivers waiting area of the centre is under construction.

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