RBI sells dollars, curbs speculation as hits 54.3

Mumbai: The Reserve Bank of India on Thursday sold dollars through public sector banks and announced steps to curb speculation in the foreign exchange market by banks and corporates as it intervened to pull back the rupee from an all-time low of 54.3 against the dollar and help it close at 53.65. 

    After market hours, the 
RBI also announced a reduction in trading limits for banks. It added that forward contracts by businesses and foreign institutional investors, once cancelled, cannot be rebooked. Forward contracts are deals to sell the dollar at a fixed price in future. Exporters and investors enter into such deals to hedge against the risk of any sharp movement in the currency. 
SUPPORTING ROLE 
Impact of RBI measures: Thursday's steps will leave almost no room for speculation in forex markets. They will bring the rupee back a bit. But liquidity in the forex market is expected to dry up 
Expectations from today's mid-term policy review: No more rate hikes. RBI may announce its intent to ease rates in future. If RBI does ease liquidity or reduce rates, equity markets could take off, easing pressure on the rupee 
What else the RBI can do to support the rupee: 
There are several measures—sell dollars directly to oil companies, offer NRIs higher returns, or it could announce a scheme for overseas Indians to bring in their funds 'Short-term steps to stabilize mkt' 
    The restrictions come in a week in which the rupee has seen its sharpest declines. The currency which closed last weekend at 52.04 had fallen to 54.3 by noon on Thursday. During the current year, the currency has fallen by more than 18%. Many traders were expecting the rupee to hit 55 against the dollar, had it not been for the central bank's intervention. The sharp depreciation has made crude imports more expensive and threatens to add to inflation which has only now started showing signs of easing. 
    RBI's hand was forced by the sharp depreciation as the negative expectations were turning out to be self-fulfilling. The central bank acted only a day ahead of its mid-term policy review on Friday when it is expected to announce its monetary stance for the current quarter. RBI is widely expected to hold rates after industrial production dipped 5.1% in October. 
    Announcing new measures in interbank dealings, RBI said banks must square up their dollar position by the end of the day. This has been enforced by reducing the net overnight open position limit for banks. On forward contracts, RBI said all such deals booked by both exporters and importers will henceforth be on a fully deliverable basis. If any participant is forced to contract the forward contract, he will not be eligible to receive any exchange gain. 
    "These are short-term measures which market participants understand are aimed at stabilizing the market," said Ashish Vaidya, head of fixed income, currency and commodities trading, at UBS. He added that while the rupee was expected to firm up, liquidity in the forex markets would reduce. 
    Dealers said the measures meant that convertibility on merchant account — which gave traders the freedom to book and rebook contracts at will — was temporarily suspended. This is not the last of the measures expected by the central bank. Other steps that RBI could possibly take include selling dollars directly to oil companies to prevent lumpy demand from driving up the dollar. The central bank could also look at offering non-resident Indians higher returns by removing limits on interest rates on NRI deposits. "The government could also look at a scheme to encourage Indians to bring home money parked overseas through a one-time scheme," said K NDey, director, Basix Forex. 
    There is another school of thought among bankers that believes that once RBI starts easing rates, equity markets will pick up and money will start flowing into India as growth picks up. However, with inflation remaining outside RBI's comfort zone, bankers feel a rate cut is unlikely on Friday.

Re Crashes to Record Low as Investors Rush for $ Cover

Re, the worst performing Asian currency, ends day at 52.84 a dollar   The rupee tumbled to its alltime low as jittery global investors pulled out funds amid fears of deteriorating economic health. With the country's index of industrial production (IIP) contracting more than 5% and the government admitting to a higher-than-reported trade deficit — $9-billion export surge goof-up — global investors are looking for exits.  International investors took flight to safety of the US dollar amid heightened fears that the fifth rescue plan in two years to rescue the European monetary union might unravel as the vital European Central Bank has not committed to bail countries out. With fears of tightening liquidity for US dollars in the international markets, importers — mainly oil companies — rushed to raise funds, accelerating the downfall. The rupee, the worst performing Asian currency, fell 1.5% to 52.84 per dollar, surpassing the previous intra-day low of 52.73 on November 22. Morgan Stanley estimates the Indian currency will fall to 54.80 by the second quarter of 2012.  "The fall is mainly due to FIIs selling out on weak economic fundamentals and also the fall in the euro against the dollar," said NS Venkatesh, head, treasury, IDBI Bank. "Right now, we don't have the wherewithal to handle the score of issues, so the exchange rate might suffer in the very short run, before bouncing back.''  International investors, who poured in a record $29 billion last year, are pulling out funds. They sold equities worth . 428.3 crore. Notwithstanding the high demand for Indian government and coporate bonds during the last auction of permits to buy them, fresh funds are now flowing in, pressuring the rupee. The weak currency has also dealt a blow with slowing exports and surging imports — the nation imports more than threefourths of its needs. Furthermore, the revision in the export data dented sentiment.  India's export numbers in November stand at $22.3 billion, a growth of about 3.7% from a year earlier, the slowest pace in more than two years. Rahul Khullar, commerce secretary, has clarified that the export numbers for the last eight months have been exaggerated by $9 billion. "Notwithstanding the misclassification, there were errors in double counting, which inflated exports by about $9 billion," he said.  The revised numbers of overseas sales in the April-November period stood at $192.7 billion. The Reserve Bank of India, whose foreign exchange reserves have fallen more than $13.5 billion since October end to $306.8 billion did not intervene vigorously.

Forex Reserves Jump over $2 b to $306 b

While bank credit rose . 37,123 crore, deposits grew by only . 19,568 crore in Nov

Beating the trend of past four weeks, India's forex reserves rose $2.5 billion during the week ended December 2, largely on higher valuation of gold in reserves and also due to revaluation of nondollar assets in reserves. 

According to latest figures released by the Reserve Bank of India (RBI), total foreign exchange reserves are at $306 billion as on December 2. Foreign currency assets, comprising dollars, British pounds and euro, among others, rose $2,479 million during the week. The value of gold in reserves rose by $1,145 million. 
While special drawing rights (SDRs) — the reserve currency with the International Monetary Fund — and the reserve capital with the IMF rose $12 million and $7 million, respectively. 
The rupee was steadily weakening against the dollar and the Reserve Bank of India has tried to arrest the currency's fall amid international financial markets turbulence by selling dollars, according to a section of the market. However, the central bank could have refrained from interfering in the currency market in the latest week as the currency 
    market was relatively stable during the week. 
In other developments, bank credit rose . 37,123 crore, or 0.9%, in November. Outstanding bank credit is at . 42-lakh crore as on November 30. While deposits grew by only . 19,568 crore, or 0.3%, during the period. Outstanding bank deposits are at . 56 lakh crore. The government borrowed . 36,137 crore as on December 2 under its ways and means advance facility with the RBI.

Salute to Shewag

SAY WAH! VIRU BEATS SACHIN'S ODI RECORD

Virender Sehwag on Thursday hit 219 against West Indies at Indore, becoming only the second batsman to score an ODI double ton 
Sehwag now holds world record for highest ODI score, beating Sachin Tendulkar's 200 not out 
Viru only player in world to have posted highest ODI & Test scores for his country (he made 319 in a Test against SA) 
Only batsman to score triple ton (he has 2) in Tests and a double century in ODIs 
Hit 142 in boundaries (25x4, 7x6), the second highest in an innings after Shane Watson's 150 (15x4, 15x6) 
Both ODI double tons came in MP (Sachin's was in Gwalior). Same curator, Samundar Singh 
418/5 India's highest ODI total ever. WI dismissed for 265, as India take winning 3-1 lead in 5-match series

This is child abuse 
— Chris Gayle ON TWITTER

I am very happy that... my teammate and an Indian has broken my record. Well done Viru 
    — Sachin Tendulkar

India’s billionaires talk of getting out

The government may have saved its political skin by putting FDI in retail on hold, but it has added to the sense of gloom that's engulfing India Inc. For the past several weeks, there's been a depressing drumbeat of stories of Indian businessmen choosing the relatively lowgrowth, high-stability option of investing abroad over the 

uncertainty of launching new ventures at home. 
    Says the India head of a fabled global investment bank, "For me, there's no slowdown. My plate's full with mandates from Indian companies looking at acquisitions abroad." 
    But it's not just about the flight of investments anymore. Several Indian billionaires say they are frustrated enough to want to shift base overseas and run their increasingly transnational business empires from cities like London and Singapore. "I'm sick and tired of what's happening here. Idon't want to live in this country anymore," said one of India's biggest barons. 
    The reasons are mainly two-fold: the policy paralysis brought on by a politically weak and scam-struck government, compounded by obstructionist competitive politics; and the climate of fear that has spread because of the raids on and arrests of businessmen. They have a third, more specific grouse (not that it's new): the time and hassle it takes to get environmental clearance and acquire land. 
    Bulge-bracket businessmen—from industries as diverse as telecom and textiles, aviation and steel, real estate and minerals—are talking 'Quit India', but obviously not in public. 
    They may be exaggerating their angst, but for the first time since the dawn of liberalization 20 years ago, the India story seems to be dimming compared to the welcoming lights of foreign shores. As RPG Enterprises chairman Harsh Goenka quips, "We are looking for the red carpet, not for red tape."Why put CEOs in jail: Rahul Bajaj 'If You Want Them For Interrogation, Take Away Their Passport' 
    The foreign lure is showing up on three fronts: 
•Indians buying personal assets overseas 
    
•A significant jump in outward remittances 
    
• Company owners focusing on generating more offshore currency through larger global investments in a bid to hedge themselves against India 
    The latest industrial production and GDP figures are cautionary indicators against India complacently comparing itself with the dismal economic situation in the US and the Eurozone. According to a just-released survey by industry body CII, CEOs are anything but bullish about their 2012 investment plans. 
Homing In On London 
In the past year, many highprofile Indians have bought homes in London's toniest neighborhoods. Bharti's Sunil Mittal, who purchased a home in Grosvenor Square a few months ago, is spending more time working out of there to keep up with the firm's global needs. The Munjals are said to have bought two homes in Kensington. DLF's K P Singh, Essar's Ravi Ruia and Sahara's Subrata Roy often live and work out of the city that once ruled India. Real estate circles in London often refer to the Berkeley and Grosvenor Square areas as upmarket 'Indian ghettos'. 
    Says a former top banker based in London, "Cities like London and Singapore are safe havens and the rule of law is clear. There is a sense of individual security and privacy." 
    Ajay Piramal of Piramal Lifesciences has also bought himself a sprawling home in London, although he isn't shifting base. He points to India's problems: "You don't know what regulation is going to hit. Sometimes it is not even rational. Very old cases are being pulled out. This doesn't give you a sense of certainty." 
    The ongoing policy paralysis is forcing entrepreneurs to look beyond Indian shores. Says Sunil Mittal, "There's a sense that the bureaucracy has stopped taking decisions as they fear that action might be taken against them in future even for honest mistakes." 
    According to a private banker, it's not just the very rich who are now purchasing assets in the west. "Property deals of $10 million are now happening routinely. Beverly Hills (in Los Angeles) is one place where promoters of listed midcap firms are keenly investing," she says. 
    In the past two years, Indians have significantly increased the amounts they spend on foreign property. Outward remittances topped the billion-dollar mark for the first time in fiscal year 2010-11. "When one person can legally take $200,000 a year, a family can easily buy a million-dollar home," says a senior foreign bank executive. 
Hedging Against India Story 
Apart from personal property deals, India Inc clearly wants to do business at a global level. More and more CEOs say they prefer assured, steady growth to the policy volatility and systemic hassles that come with investing in India. 
    "We look overseas because it's a question of ease of doing business. We are wondering how we can get 50% of our revenues from overseas in the next few years. We are simply fed up of red tapism and the harassment involved," says Goenka. 
    "Of course we are hedging against the India bets by investing globally. If India were so attractive right now, why would people look beyond?" asks Piramal, who is looking to deploy his cash stash of over $2 billion. Recently, the CEO of a large Indian MNC in the country told his managers that all India investments were being brought to a halt. 
    Kumar Mangalam Birla, whose firm Hindalco gets over 30% of its business from Europe, has also said that for now, he's rather look outside. In a recent interview with ET Now, he said, "I think that the environment is not so conducive to growth; there is a lot of policy back and forth that's happening unfortunately…One would want to wait for things to get better. I think it's a good time to start looking overseas." 
    Godrej Group chairman Adi Godrej is clear that India needs to get its act right, "especially in sectors like infrastructure and mining, where government is important and we have been more adversely affected". 
    The data too just keeps getting more depressing. The target of 8% growth seems elusive, with GDP growth having slowed to 6.9% in the July-September quarter. 
    CII points out that stalled environment clearances and land issues have cast a pall over investor confidence. It also cites quality of governance, slow pace of decisionmaking, high transaction costs and corruption as reasons for the pessimism about investing in India. 
Crisis Of Confidence 
Animal spirits are clearly at a low right now, acknowledges ICICI Bank chairman KV Kamath. "Negativity as a whole pushes you down," he says, adding that he has seen such trends every time the country has been hit by a slowdown in the last 40 years. 
    A banker says that of his top 100 clients, 75 are sulking and say they have no incentive to offer to potential investors. It's a far cry from the ebullient Indian promoter, hungry to buy assets and expand, that one had got used to. 
Fear Factor 
The Group of 14 eminent citizens (drawn mostly from business), in their letters to the nation's leadership, have said India Inc is tired of being harassed by a system that expects them to pay bribes. Bureaucracy on one hand and random investigations on the other have had a depressing effect on corporates. "Why put CEOs in jail," asks Rahul Bajaj, the out-spoken chairman of the Bajaj Group. The arrests in the recent 2G scam have had India Inc on the run for months, especially since the bail pleas of promoters and senior executives were repeatedly rejected. "Till they are convicted, why are they in jail? If you want them for interrogation, take away their passport. The only argument CBI gives is that they will tamper with evidence but that's no logic." 
Lost Decade? 
Ironically, India is still growing faster than most of the world. The global slowdown offered the Indian government an excellent opportunity to woo investors. Instead, points out corporate lawyer Harish Salve, "Not only have we scared away foreign investors, we have scared away even Indian investors. They are worried about investing in their own country." 
    "Decision making has come to a standstill," laments HDFC chairman Deepak Parekh. "Look at power sector reforms where meetings have been indefinitely postponed. We have lent massive sums of money to the sector but they have issues of land and government approvals." 
    Is India on the verge of losing what began as a Dream Decade? "It is. Because of lack of decisions and drift," says Piramal. Adds Godrej, "We are surely embarrassing ourselves…Some of the governance issues being exposed are hurting us." 
ALARM BELLS

—Ajay Piramal

—Kumar Birla

Decision making has come to a standstill. Look at power sector reforms where meetings have been indefinitely postponed. We have lent massive sums of money to the sector but they have issues of land and government approvals 
Deepak Parekh | CHAIRMAN, HDFC

Not only have we scared away foreign investors, we have scared away even Indian investors. They are worried about investing in their own country 
Harish Salve | SENIOR SUPREME 
COURT LAWYER

We are looking for the red carpet, not for red tape 
Harsh Goenka | CHAIRMAN, RPG 
ENTERPRISES

India Re dives to lifetime low of 52.73

Oil Cos Stack Up Dollar, RBI & Govt Indicate Inability To Prop Up Rupee

New Delhi/Mumbai: The rupee continued its free fall and touched a nadir of 52.73 against the dollar, before recovering a little to close at 52.32, amid indications from RBI and the government that there was little that authorities could do to prop up the currency. 
    The Indian currency closed 16 paise lower compared to Tuesday's close which was a record low. The steep fall on Monday morning trade was due to heavy dollar demand from oil companies. Expectations of a further decline are also prompting importers to buy dollars, dealers said. There are clear indications from the market that the falling trend is going to last for a while. In the offshore market, three-month forward contracts traded at 53.46 to the dollar, compared with 53.05 on Monday. Forwards are agreements to buy or sell assets at a set price and date. Non-deliverable contracts are settled in dollars. 
    Even in the futures market, which is used by companies tohedge their currency risks against a steep appreciation or depreciation, traders were betting on the rupee trading at 52.80 in late January. The rupee is among the most depreciated currencies this year, having lost close to 15% in 2011, and is the worst performer among the 10 most-traded currencies in Asia. 
    "The present situation is worse than the 2008 crisis which was essentially a problem faced by corporates. This time it is countries that are at risk which is a more serious problem. There is complete negativity on all fronts and it is not possible to forecast how low it can fall," said K N Dey, director at Basix Forex. Although RBI described the continuous slide as "disruptive", it indicated that there waslittle it could do. "We expect that a reverse adjustment (in the rupee) will take place when the European situation resolves itself," governor D Subbarao told reporters in Hyderabad. 
    Finance minister Pranab Mukherjee was blunt, and said, "RBI intervention may not help." RBI typically steps in through public sector banks such as SBI to either sell or buydollars and check extreme volatility in the currency. Typically, in a situation like this, the central bank would sell dollars. But fearing that its actions could suck out Indian currency from the system and put further pressure on interest rates, the central bank has been selling the greenback in small lots. But that has not helped. "Our policy is that if the macro-economic situation is impacted due to the exchange rate fluctuation or undue volatility, we will have to
intervene. We are yet to decide whether to intervene or not at the moment," Subbarao said. 
    The fall in the currency has sparked fresh pessimism in the market and even Mukherjee recognized that inflation management efforts would be hit. "As a result (of depreciation) whatever little benefit could have been derived from the softening of international commodity prices, has been wiped out," the FM said. 
WHAT POLICYMAKERS SAY RBI reserves firepower for the worst Subbarao Says Rupee Will Firm Only After Europe Resolves Its Problems 
Mumbai: One aspect of the rupee's sharp fall last week that has surprised markets is the Reserve Bank of India's muted response during the week. Dealers feel that the central bank is reserving its firepower as the global situation could worsen. 
    On Tuesday, RBI governor D Subbarao told newspersons in Bangalore that the rupee would firm only after Europe resolves its problems. "We expect the reverse adjustment will take place when the European situation resolves itself. Until then, obviously, I can't comment whether RBI is intervening or not but we are watching the market," he said. 
    Dealers feel that although the central bank is sitting on forex reserves of over $300 billlon they are not free reserves as they represents liability towards portfolio investors. "Last time when the rupee had crossed 50 the sensex had dropped below 8,500. This time the sensex is at 16,000, if the central bank were to support the rupee at this level it may encourage portfolio investors to further book profits," said a dealer. 
    According to Subbarao, the central bank will intervene when it is consistent with RBI's policy. "Our policy remains the same, which is to manage volatility in exchange rate and to ensure that exchange-rate volatility does not impair macroeconomic stability." 
    Subbarao's stance was reiterated by deputy governor Subir Gokaran in Mumbai. Speaking to reporters, Gokarn said that RBI did not have any target for the rupee but any action by the central bank must factor medium-term risks. He added that RBI was weighing possible actions on the rupee. 
    Subbarao said the proposed legislation on food security may result in pushing up prices. The governor also said that higher income was driving an increase in protein consumption adding to demand pressures. 
    Delivering a speech at the Indian Society of Agricultural Marketing in Hyderabad, Subbarao said: "The National Food Security Bill, 2011 is another potential source of pressure on inflation, and its inflationary impact will depend on the extent to which it will raise demand for food grains relative to the normal increase in supply." The proposed bill targets two categories of households—priority households and general households—which covers 75% of rural population and 50% of the urban population. The price restrictions are quite exacting and failure by the government to meet the obligations entails payment of a food security allowance to the beneficiary. "Estimates suggest that 68% of the country's 1.2 billion population will get a legal entitlement for food grains after the bill is enacted, significantly raising the annual grain procurement demand even as the available marketed surplus would not increase correspondingly.

RBI is monitoring the situation closely and will take the required action in light of the international developments as situation unfolds. However, RBI intervention (in the forex market) will not help Pranab Mukherjee | FINANCE MINISTER

Our policy is that if the 
macro-economic situation 
is impacted due to the 
exchange rate fluctuation or undue volatility, we will have to intervene. We are yet to decide whether to intervene or not at the moment. The intervention in the forex market will be in accordance with the RBI's policy. But in real terms I cannot tell (when the central bank will intervene) 
D Subbarao | RBI GOVERNOR

We should not overreact to movements in the exchange rate. But, also understand that there are good reasons for what is happening. 
Expectations of economic events in certain parts of the developed world together with asset preferences are driving investors into taking decisions, which affect not only exchange rates but the prices of commodities 
Rahul Khullar | COMMERCE SECRETARY

Rupeeat all-time low of 52.15, to impact everyday life

Imports Cost More; Overseas Travel, Edu Hurt

Mumbai/New Delhi: The rupee hit a low of 52.15 against the US dollar on Monday, making imports, overseas travel and studies at foreign universities more expensive but cheered exporters and families that depend on remittances. 
    Based on Monday's closing price, the rupee has never been cheaper 
against the dollar, although it had flirted with the 52.20 mark in March 2009 following the global financial crisis. But unlike then, when the slide halted as global markets recovered, this time round, foreign exchange dealers are betting on a further fall. 
    There are projections of the currency falling to 55 against the greenback as economic fundamentals stay weak. If the doomsayers get it right, life isn't going to be easy. The sharp fall evoked an almost immediate response from edible oil company Adani Wilmar, which raised prices, while those selling palm and other oils that are mainly imported are expected to follow suit. White goods and phone makers are mulling a 2-10% hike. 
SOME GAIN, LOTS OF PAIN 
WINNERS 
Families of those working overseas will get more rupees for dollars remitted by them Exporters get more rupees for the same price in dollars Tourism may get small boost as foreigners will have to pay fewer dollars for vacationing in India Companies that manufacture export substitutes will get protection through cheap imports 
LOSERS 
Students will have to pay higher fee and living charges in rupee terms. Medicare to also get more expensive 
Overseas travel to get more expensive as you will have to shell out more rupees for the same amount of dollars 
Imports to get costlier, hit oil and commodities. Adani Wilmar hikes edible oil prices 
Hampers govt's efforts to use imports to tame inflation 
Companies will have to pay more for repaying foreign debt. They also stand to lose if they had not hedged properly—the likely scenario since few would have foreseen the rupee hitting 52/$ 
Higher oil import bill could put greater strain on govt finances, given clamour for higher subsidies 
WHY DID IT HAPPEN? 
Investors rushing to US dollar in flight for safety. Other currencies, including rupee, have plummeted as demand for dollar has soared FIIs exiting Indian stocks to put money in US T-bills 
HOW FAR WILL IT FALL? 
Expected to decline to around 52.50 against dollar. Traders say it may hit 55 next year, given the weak fundamentals of the economy Hike in short-term rates may not helpAweakening rupee is also eating into the gains 
of falling international commodity prices with markets staying edgy due to fresh talk of recession and the inability of US lawmakers to push through a $1.2 trillion spending cut. 
    Reflecting the nervousness, the BSE sensex slumped 425 points and fell below the 16,000 mark to close at 15,946. The last time the sensex closed below 16,000 was on October 5, 2011 after Moody's downgraded SBI's credit rating. 
    With the global economic forecast remaining bleak, foreign investors are pulling out of risky and emerging market assets and embracing safe haven options such as the dollar and US treasury bonds. 
    Following Monday's fall, the rupee has declined more than seven rupees against the dollar since August 1. A weaker rupee adds to inflation by pushing up cost of imports, particularly crude. Every weakening rupee adds Rs 8,000 crore to the crude bill. 
    The slide adds to the government's policy worries given the high inflation level, a slowing economy and rising trade deficit. 
    It's just not oil and other imports, you will have to shell out more Indian currency for foreign travel, overseas education and medical treatment abroad. For companies, the increase in dollar value pushes up the cost of imports and of dollar funding. Exporters who have hedged by selling dollars in the forward market will take a mark-to-market hit as their dollars will fetch less than what they have promised to sell it at. 
    Monday's trigger for the currency market turmoil was pessimism over a senate deal to cut the US deficit. Bankers are anticipating a shortage in dollar funding and are hoardingcash by parking them in shortterm US treasuries which are the most liquid of all investments. Compared to the 8.5% returns that banks receive in Indian markets, lenders receive almost zero interest on three-year treasuries. 
    Dealers say that because of the risk aversion, a hike in short-term rates—RBI's traditional tool for stabilizing the rupee—may not work. 
    "RBI can address this problem in the short term by opening up the capital account. But a long-term solution will require structural reforms that will lead to a positive current account and trade balance," said Ashish Vaidya, head of fixed income currency and commodities at UBS India. 
    He added that since most international financial institutions were shrinking their balance sheets it was unlikely that even capital account easing would bring in more dollars.

Civic devpt plans to go online

Will Lead To Transparency, Cut Down On Red Tape: Officials

Mumbai: The state government will upload development plans (DPs) of all municipal corporations and councils online. 

    The urban development department (UDD) on Wednesday issued an order to 347 corporations and councils, which are charging Rs 250 or more for each remark on a plot size of DP sheet, to immediately take steps in this direction. The plans, since attached to the revenue side of government functioning, are not available even under the Right to Information (RTI) Act. 
    State officials hope this will create greater transparency in the working of local bodies and cut down on redtape at the lowest levels of bureaucracy. 
    "It is a step in the right direction and will give power to citizens to check if they are being duped by phony real estate agents while purchasing a house or if a playground in their neighborhood is being misused. This also means a handful of people will now apply for a manual copy of the DP sheet, cutting down on the workload of municipal workers," an official of civic development plan department said. 
    The government has scanned all the DP sheets and will upload them by March 25, 2012, UDD officials said. "The exercise will be carried out systematically to ensure even minor details of a DP are included," an official said. 
    The DP defines land use patterns in the city and details floor space index (FSI) norms for various areas. The plan also contains terms for schools, colleges, and open spaces for a populace, among other reservations. The need for a DP is felt in large cities and urban areas that are growing rapidly and becoming dense. This makes it necessary to divide them into zones, with statutory provisions controlling an area's growth systematically. The DP laws prohibit dangerous and 'obnoxious' use of construction in these zones: residential, commercial, industrial and agricultural. 
    "When uploaded, the plans will facilitate systematic planning, ensuring benefits to the community at large," a civic official said. 
    The civic body is planning its third DP, which may be completed by 2016. However, the official deadline is still 2014. The current plan got published in 1983 and public suggestions were invited. The plan was approved by the state government in 1991. The first DP for Mumbai was prepared in 1964. 
WHAT'S A DEVELOPMENT PLAN As per Section of 22 of the Maharashtra Regional and Town Planning (MRTP) Act, 1966, a DP includes 
    Use of land, such as for residential, industrial, commercial, agricultural and recreational purposes 
    Reservation of land for public purposes: Schools, colleges, medical, public health, markets, social welfare, open spaces, gardens, theatres, museums, religious and other government buildings 
    Reservation of land for transport and communications: Roads, waterways, airports 
    Provisions for permission related to open spaces to be left around structures, character and size of building, density of population, sub-division of plots, parking spaces, among other building matters 
    Plan also controls tenement density per acre, FSI use for a locality for 'general welfare' of a zone