No need for developer’s NOC for flat sale/transfer

Mumbai: In a major relief to flat buyers and society residents, the state government has said that there is no need for a no-objection certificate from the developer for sale or transfer of flat (resale) in a fully constructed building. 

    The state housing department has issued an official communication in this regard after coming across cases where developers illegally collected money from flat buyers for providing such NOCs. 
    The department claims to have received complaints stating that the developers had collected up to Rs 500 per sq ft in such cases of transfer. This means, for the sale or transfer of a 540 sq ft flat, buyers are forced to cough up an additional Rs 2.7 lakh or so. The department has said there was no requirement for NOC under norms mentioned in the Maharashtra Ownership of Flats Act (MOFA). 
    Ahousing department official said that MOFA norms requiring formation of the society and conveyance of the plot to the society within a stipulated time after completion are not being observed in a large number of cases. Recovery of illegal amounts in the name of NOC for sale or transfer of flats are being reported in several cases, the official added. 
    The department has also written to the inspector general of registration, S Chockalingam, asking him to ensure that officials in the registration department register sale documents without insisting on the NOC from developers. The department says it has received complaints where officials have refused to register the documents without the NOC. 
    The Cidco, which has leased out a number of properties in Navi Mumbai, has also been asked to ensure that developers of these plots comply with MOFA norms. The department has sought Cidco's opinion on whether its permission was needed for transfer/ sale of flats for plots leased by it. The department is of the opinion that the permission—insisted upon at present—is not required. The government has urged societies where developers haven't conveyed plots within stipulated time to apply for deemed conveyance.

Fitch Cuts India’s Growth Forecast

Ratings firm Fitch cut India's growth forecast for the current fiscal to 6% from 6.5% estimated earlier, citing a challenging growth environment. Standard & Poor's has already lowered growth target to 5.5%. Both the agencies have put India's sovereign rating on watch, warning it could be cut to junk grade from just investment grade now.  "India's economic outlook remains challenging. The projections for real GDP growth (has been trimmed) to 6% for FY12-13 from a previous estimate of 6.5%," Fitch said in its Global Economic Outlook report. India's GDP growth dropped to 5.5% in April-June quarter. Fitch has said the high fiscal deficitleaves little room for government to revive growth through spending.  The ratings agency welcomed the government's recent reform push that include decision to allow foreign direct investment in multibrand retail, raise fuel prices and ease foreign borrowing-.Fitch said the high inflation does not give RBI room to cut interest rates.

Rupee may hit 50/$ in a few months: Govt

NewDelhi:The government on Friday said it expects the rupee to appreciate to around 50 against the dollar over the next three-four months on higher foreign inflows, a development that will help rein in subsidies and also check inflation. 

    "The rupee has gone below 53 and that reduces the subsidy requirement. If rupee further strengthens, which we hope it will, with the steps the government is taking, we expect it could even touch 50 in the next 2-3months or four months," economic affairs secretary Arvind Mayaram told reporters. He said the recent policy initiatives are expected to result in higher foreign exchange inflows — through the FII and the FDI channels — and ease the pressure on the rupee. 
    On Friday, the rupee rose to 52.50, a level last seen on May 1 before ending the day at 52.86, 16 paise stronger than the previous close. For a currency that was among the worst performers till recently, this was the fourth straight week of gain and the best quarter since June 2009. Since September 13, when the government initiated the so-called reform measures by raising diesel prices and capping subsidized cooking gas sales, the Indian currency has gained around 5% against the greenback. 
    A gaining currency makes imports cheaper, especially the oil import bill, and cools down inflation. Mayaram said that a one rupee gain translated into 8 basis points reduction in inflation (100 basis points make a percentage point). Going by this argument, nearly a quarter percentage point has been shaved off from inflation in the last two weeks, while the oil subsidy, based on underrecoveries of oil companies that was projected at Rs 1.67 lakh crore, has also come down by around Rs 20,000 crore. A one rupee change against the dollar results in change in under-recoveries by Rs 8,000 crore. The market, however, is not as bullish. In a research note, Bank of America Merrill Lynch economist Indranil Sengupta estimated the rupee to be around Rs 51 to a dollar this fiscal. Most agencies expect the rupee to hover around 51-52 to the dollar given the global uncertainty. 
    But even at these levels, there is a gain for the government. "It is not simply in terms of cutting subsidies that you can contain fiscal deficit, (but) by better management of economy also fiscal deficit can be contained," Mayaram said. He said the government may step up the disinvestment drive and will try to keep the fiscal deficit as close the target as possible. Sensex closes near 15-month high 
Mumbai: The government's moves to increase revenues and an assertion that its borrowing from the market for the second half of the current fiscal will not exceed the budgeted figure led to a strong rally on Dalal Street, lifting the sensex by 183 points to 18,763 — near its 15-month closing high mark. 
    The day's rally, that added Rs 73,000 crore to investors' wealth, was also aided by news from Europe that Spain, one of the struggling economies in the continent, has agreed to an austere budget that would contain its fiscal deficit to some extent. 
    The day's session began on a strong note with sensex up more than 100 points, and soon climbed to its intra-day high at 18,870. 
    Profit-taking late in the session, however, pulled the index down from its high and it closed with a 1% gain. 
    The rally was helped by foreign fund buying with data at the end of the session data showing a net inflow of Rs 1,230 crore. 
    The day's figure took the aggregate monthly FII flows to over Rs 20,000 crore, or about $3.9 billion. 
    Domestic funds, however, remained net sellers with a net selling figure of Rs 679 crore, taking the monthly figure to close to Rs 9,200 crore. 
    Among the top sensex gainers were Hindalco, up 3.4% at Rs 121, Tata Motors gained 3% to Rs 267 and Cipla with its stock up 2.5% at Rs 381. 
    Of the 30 sensex stocks, 26 ended with gains. 
    The strong FII flows also aided in strengthening the rupee, which closed at 52.86 to the dollar, compared to its Thursday close of 53.03, a five-month high.

‘Days of 20% growth will never come back’ Industry Saddled With 2L Cr Debt But Govt Yet To Get The Reality: Vodafone India CEO

Marten Pieters, CEO of Vodafone India, the country's second largest mobile phone operator, has worked in emerging markets for 17 long years but his Indian stint at the British telecoms giant over the last three-and-a-half years has been in one word — challenging. He has a similar opinion on life as an expat in the country's financial capital. A $2.2-billion tax dispute, regulatory issues that have troubled the telecom market and now the falling growth and subscriber numbers, Pieters has had to steer the telco through a tough market which has so far not delivered financially for the company's shareholders. In a candid chat with TOI, the Vodafone India boss says the wait for returns from India may get longer with the uncertainty that surrounds its license extension that comes up after two years. Excerpts:  It has been over five years since the Vodafone Group Plc bought a 67% stake in Hutchison Essar. Has the  Indian market performed as expected and been able to offset the slowdown in  Europe?  Overall, Vodafone has had a very good five years here. We came to India as it was a growth market just like the two other emerging markets we entered at the time — Turkey and South Africa. Till then, we were largely Europecentric. India was by far the biggest market in terms of size and potential but South Africa proved to be financially more profitable. However, India has delivered on the promise at least on the growth front — from 30 million to 153 million subscribers. Our revenue market share has grown from 17 % to 22%. All this while we made an investment of Rs 50,000 crore (including Rs 11,600 crore on 3G spectrum acquisition) in this period, of which the government got Rs 45,000 crore. Shareholders got nothing.  So what has been the big  challenge for you here  in India?  It is a financially troubled industry today and not well understood. It has been a good industry to create value but not for free cash flow production. Over the next two years, we have to get an extension of our licences that will be a huge additional financial stress. We are worried about this…  What is the kind of hit that you will take if you have to renew your licences keeping the benchmark of Rs  14,000 crore — the reserve price set by the government for 5 MHz of pan-India 2G spectrum?  Many billions of dollars, but it depends on a few factors like payment terms. Looking at the reserve price of Rs 14,000 crore, one wonders if that will work. We have to wait and see the outcome of the auction as that might be the benchmark for licence extension too. There is a disconnect between the realities and what the regulatory environment assumes it to be.  How is this disconnect impacting business…  The problem is that people are broke; the industry has a debt of an estimated Rs 2,00,000 crore. So at the moment your balance sheet is stretched and you cannot service your debt. But that reality has not landed with the government, which is a pity. The industry is on its knees and there are a number of new players whose losses are two to three times their revenues. How long can you sustain it? There are constant attacks on our revenue stream. SMS capping, which was done during the unrest in Assam last month, hurt us, as they (users) moved to other (free) applications.  For the first time in a decade, incumbent GSM players lost subscribers as the Indian mobile subscriber  base fell sharply by 20.7  million in August. How are you handling this low  growth phase?  This was due to two reasons, seasonality, but probably the bigger reason is the slowdown. People don't have the money or they are sitting on it. August was bad for business. I am preparing for a situation wherein those 20% growth rates will never come back. The total subscriber base now is over 900 million. How many more will you add? So, we will see flattening out of the real growth but I am still optimistic about India Inc as far as long-term growth is concerned. It is like the US, between 1910 and 1940, when consumerism was at its peak.  What about call tariffs,  where are they headed?  Lot of irrational pricing is there in the market which is not based on longer term costs plus profit margin, it is just opportunistic. We won't see any substantial change in pricing, so long as desperate players operate. The industry will rationalize with longer term sustainable players. I think it is a matter of time. The players who have scale can survive in such an environment if they do not have to pay for spectrum.      SHAREHOLDERS GOT NOTHING  ON INDIA EXPERIENCE  India was by far the biggest market in terms of size and potential but South Africa proved to be financially more profitable. However, India has delivered on the promise at least on the growth front — from 30m to 153m subscribers… All this while we made an investment of Rs 50,000 crore. Shareholders got nothing  ON TARIFFS  Lot of irrational pricing is there in the market which is not based on longer term costs plus profit margin, it is just opportunistic  Marten Pieters | CEO, VODAFONE INDIA

S&P Cuts 2013 India Growth Target to 5.5% on Weak Monsoon, Euro Crisis

Agency slams the country for its infrastructure and policy that have slowed down investments Credit rating agency Standard & Poor's pared India's growth forecast for the current fiscal by a percentage point as part of its Asia-Pacific review, slamming the country for its policy and infrastructure that have slowed down investments.  In a note released on Monday, the agency cut India's expected growth in 2012-13 to 5.5% from 6.5%, in line with the April-June quarter growth of 5.5%. S&P also cut China's growth to 7.5% from 8% for 2012 calendar.  S&P had in April lowered the outlook on India's sovereign debt to negative from stable, giving a one in three chance that its long-term BBB- rating could be cut to below investment grade on its high fiscal and current account deficits among a host of macro-economic concerns.  "The lack of monsoon rains has affected India, for which agriculture still forms a substantial part of the economy. Additionally, the more cautious investor sentiment globally has seen potential investors become more critical of India's policy and infrastructure shortcomings," the agency said in a note that is silent on the recent burst of reforms.  In the last fortnight, the government has raised diesel prices, cut subsidies on cooking gas, allowed foreign investment in multi-brand retail and announced a host of other measures to spur investments. The reduction in subsidies is expected to reduce fiscal deficit by 0.2% of GDP while the strengthening currency will help lower inflation as imported inputs and fuel become cheaper.  Prime Minister's key economic aide and former central banker C Rangarajan stuck to a more optimistic note. "Our own forecast is that the growth rate of economy in the current (financial) year will be 6.7%, that is a better shape than last year. I think, the growth will pick up in the second half of this year....Agriculture performance this year would also be better than what was expected a few months ago..." Rangarajan told reporters in Chennai.  S&P has said India's slower growth is a combined result of a 15% deficit in rainfall for June-September and worsening of the eurozone, but official estimates place the rainfall deficiency much lower at 5%. "Those countries with relatively high export flows to the eurozone include China, India, Japan, Taiwan, and Vietnam," it said.  On a positive note, S&P says India will also benefit from the lower commodity prices because of the slowdown. "This reduction should help to lower inflation risk, and it will also reduce pressure on some Asia countries that subsidise fuel (such as India), but at the same time it will negatively impact commodity-dependent exporters (like Australia)," it said.

SMART THINGS TO KNOW: Real estate terms

1 Carpet area is the area within the walls of an apartment that is for the exclusive use of the buyer. While computing the carpet area, the terrace and balconies are usually considered as half the actual area. 2 Built-up area includes the carpet area and thickness of external walls, internal walls and columns. It is typically 10-20% more than the carpet area and is also sometimes known as the plinth area. 3 The super built-up area includes common amenities, such as the area of lift shafts, lobby, and corridor, proportionately divided among all flats. The common usable areas, such as a swimming pool, garden and clubhouse, may also be included in it. 4 The per square foot rate quoted by the developer is typically applied on the super built-up area to determine the value of the flat. This is the reason super built-up area is also sometimes referred to as the saleable area. 5 Floor Space Index (FSI) is the ratio between the total built-up area and plot area available allowed by the government for a particular locality. Premium FSI refers to permission obtained to build extra floor space by paying a premium. The content on this page is courtesy Centre for Investment Education and Learning (CIEL).

Global Retail’s Big 10 & Our Shopping Future

If you look beyond Walmart & Tesco, you find big retailers that have the money and nerve to do business in India. But what are the challenges for these giant companies, globally & in India?

    With foreign direct investment (FDI) in retail, India's $450-billion retailing industry is about to undergo a big change. What you buy and how you buy will change too. 
    Pushing for this change will be an entire brigade of big retailers. The big daddy of retail — Walmart — has already announced that it will be here in 12-18 months. Others like Metro and Tesco too are figuring out their India strategy. They all will do their best to stir up the Indian shopping experience. 
    In the next five-ten years expect many more global retailers to get into the fray in India. Who will they be? What are they like? And how will they fit into Indians' shopping basket? These are questions with no easy answers. But global pecking order should hold a few clues. More importantly, how is the world of global retailing (born in the 20th century) getting redefined in the 21st century? What are the opportunities and challenges that the big retailers see and how is that reshaping the landscape in the industry? Answers for these questions will help us get a perspective on global retailing. But it will also offer clues into how Indian retailing will shape going forward. 
As India and Indians take tentative steps to embrace modern retail, ET Magazine brings to its readers a global perspective on how the retailing world is stacked up and a few trends that are reshaping it: 
Changing Pecking Order 
First the pecking order. Of course Walmart is the biggest of them all. Based on 2010 retail sales figures, a Deloitte 2012 global report puts the top 10 retailers as follows: Walmart, Carrefour, Tesco, Metro, Kroger, Schwarz, Costco, The Home Depot, Walgreen and Aldi — in the descending order. 
    The nationality of these retailers is revealing. There are five US-based retailers (the biggest consumer market till recently), three German and one each from the UK and France. 
    But that order is seeing some flux. "Many of the new, fast-growing players are coming from China, Japan and Australia," says Shyamak Tata, partner, Deloitte Plc, a consultancy firm. 
    A ranking done by Planet Retail, a global retail consultancy firm, based on total sales of 2011 sees entry of two Asian ( Japanese) retailers Aeon, Seven & I and one French retailer Casino. The entry of Asian retailers in the top 10, mirrors the shift that the world economy is undergoing from the West to the East. Interestingly, US-focussed Home Depot and Walgreen make an exit from the Planet Retail's top 10 ranking. 
    Their pace of growth too tells a story. Look at Carrefour, the second-largest retailer after Walmart. Its total sales are expected to grow from $123 billion in 2006 to $161 billion by 2016, a growth of 31% over a decade, according to the Planet Retail data. As compared to this, Asian retailer Seven & I is expected to grow from $62.5 billion in 2006 to $131 billion by 2016, a rise of almost 110%. 
    But the world's biggest retailer, Walmart, seems to be maintaining its competitive edge. From around $368 billion in 2006 to an estimated $607 billion in 2016, it is expected to log a topline growth of almost 65% over a decade. "The business is undergoing a structural shift. Action is shifting from slow mature markets to emerging ones. And their successful big-box strategy is under threat with e-tailing. Retailers will have to rejig their strategy to maintain edge," says Natalie Berg, global research director, Planet Retail. 
    India angle: As India enters 
    the world of organised retail, 
    its billion-plus population and growing consumption power will receive a lot of attention from global giants seeking growth. Expect to hear many more to announce their India plans in future. 
Retail is a Local Business 
Of course global giants will look at India. But it is important to keep in mind that organised retailing has so far been a very local business — often dominated by local not global players, says Arvind Singhal, chairman, Technopak Advisors. 
    Most of the top retailers in China — from the Brilliance Group, to Suning Home Appliances, Gome Home Appliances to Dashang Group — are Chinese. This is when there are 25 global retailers vying for customers in the $2-trillion plus Chinese market. 
    China isn't an exception. It is the same in most other countries like Japan, Germany, France and the US. Most top global retailers — from Carrefour to Walgreen to Aldi to Home Depot get the bulk of their global sales from their home territory. There are some like The Kroger Co (fifth largest) and Target (11th largest) who only operate out of one country, the US. 
    Many global retailers have ventured out, but finding success hasn't been easy. Carrefour recently withdrew from Malaysia and Thailand and will shut down operations in Singapore. Walmart has had to close down 
its operations in Germany 
and South Korea. 
    In 2006, the US-focussed Home Depot ventured into China by acquiring a local company. But it has been struggling with its operations there. "The complex logistics and understanding of local customers make it very difficult for foreigners to crack 
the market. Local firms have a 
significant edge," says Singhal. 
India angle: India, considered one of the most difficult markets in the world where food habits change every 200 km, may not be any different. The operating cost of an organised retail store is about 15% higher than a kirana store. India has among the highest rents per sq ft of space while the sales per sq ft are among the lowest. Global retailers, as much as Indian, are struggling to make profits. Some like Bharti Group may let its partner Walmart lead the way. The Future Group too might get a global partner on board to continue the journey. But experts expect local players like the Tatas (it has a tie-up with Tesco), Birla and Reliance to show the way provided they get their act right and play their cards well. 
Globalising to Chase Growth 
With slowing growth in their home bases, the retailers are exploring newer markets in the developing world. Take for example Carrefour, which has a vast network of stores across the world but bulk of it sales still come from western Europe. It is now looking at Latin America and Asia seriously. 
    The same is true for the German Schwarz Group which operates Kaufland and deep discounter Lidl stores. The Europe-only player was focussed on central and west European market. However, growth in these places has tapered and it is now looking beyond to eastern Europe, Asia, the Americas and South Africa for growth.
    This journey will not be easy as many like Carrefour, Walmart and 
    Home Depot have realised it 
    first hand. Most of them 
    have had to exit a few countries or rework their strategies in these markets. The big retailers will need to go glocal — use their global experience and tap into local knowledge and 
    management 
    to operate in 
    emerging markets, says Berg. India angle: After lots of trial and tribulations, difficult markets like China have taught global retailers such as Walmart to be flexible and appreciate the importance of local knowledge. Humbled, today it marries well its global learning and best practices with local understanding to handle emerging markets. India, late to the global retailing party, should benefit from this. 
Death of Big Box? 
The story of big retail has largely been built around big-box strategy, which took birth in the middle of the 20th century. The retailers set up large hypermarkets, often outside the main city, where real estate was cheap and used the economies of scale and operational efficiency to make money. His- torically, big retailers have entered a new country through the hypermarket route before a full-fledged rollout. 
But now this model is under threat. A Canadian retailer Rona is pushing for proximity stores while closing down its big-box outlets. Walmart is testing a smaller-format Walmart Express aimed at urban locations. Another retailer Target has opened City Target in downtown Chicago. Targeted at the local population, it will be the first Target store with no parking facility. 
    "Proximity retailing looks to address the convenience of shoppers through easily accessible stores offering an edited assortment to fulfil the top-up/impulse/distress needs of shoppers," says Himanshu Pal of Kantar Retail in a recent report. 
    But why are retailers looking at newer formats? A combination of factors is pushing big-box driven retailers to think small. In mature markets like the US, retailers built big-box stores on the outskirts of the cities, where space was cheap and plenty. That market is saturated. "One last opportunity for them are the cities which are still under penetrated," says Berg. Greying population in mature markets, where people prefer neighbourhood shopping, is catalysing this shift. Not to forget that technology too is shaking up the business — but more on this a bit later. 
    All this means that big retailers, used to making money on bigbox stores, have to learn how to make money from small stores. Located in the middle of the city where real estate is scarce and expensive and replenishing merchandise in these stores is difficult. Making money is even more so in this proximity model which leans on high footfalls and capture rate to make money. 
India angle: This learning will come handy for many of the retailers with aspirations in India. Densely populated India, with costly real estate, will not afford retailers the comfort to go for a full-blown big-box strategy. Indians are also used to shopping for routine stuff at their neighbourhood stores rather than driving long distances. 
Tech-edged Challenge 
Technology has redefined many industries. Retailing isn't an exception. Guess who is keeping Walmart awake at night? Amazon. Three factors — low prices, wide assortment and everything under one roof — helped the big-box retail model become so successful in the past. Now, e-tailers like Amazon offer all that with more convenience, better price and more variety. Not to forget that over time, retailers like Amazon have also built customer trust that they can exploit. 
The growing popularity of "showrooming" is another challenge big retailers face. Showrooming is the act of examining a product in a brick-and-mortar store and then purchasing it online at cheaper rate. It does not help that today's consumers are armed with smartphones and can instantly compare the prices while walking down the aisles of stores and make an informed decision. 
    Further, e-tailing is growing rapidly even as brick-and-mortar-focussed retailers such as Best Buy and Border book stores struggle to survive. Almost all retailers are laying thrust on tapping the internet. Using social media to connect with customers is high on the agenda. Tesco, for example, recently offered double Clubcard points to its customers who used Facebook to like, share and buy its products on its website. Dell is rewarding its customers who promote Dell products online. 
    But they have a long way to go as Walmart discovered recently. To promote one of its products, it announced a contest where it would send American rapper Pitbull to a Walmart store that received the most new Facebook Likes. A cheeky online campaign #ExilePitbull was launched to send Pitbull to the remotest Walmart outlet near Alaska — and it won. 
    Big retailers are also trying hard to reinvent their big-box strategy. Proximity stores that know the neighbourhood well and stock appropriately and cannot easily be replaced by internet shopping is their first weapon. Most retailers are pushing deeper into private labels which help them avoid direct price comparison with other big brands, takes the conversation away from just prices and offers them better margins. Some retailers are also trying newer formats. For example, Auchan in France has innovated on a hybrid model — where you place order online but drive and collect the order from a physical store. The format has seen good success and is being followed by many other retailers. 
India angle: India is late to the organised retail world. It can leapfrog. Expect global retailers, with no legacy issues here, to experiment with some of these new formats when they come.

Walmart 
Presence 
Home base is US; present in 16 countries The big daddy of the retailing world is also the world's second-largest private sector employer with 2 million plus employees. With 8,500-plus stores in 16 countries under 55 different names, it is known for using its global supply chain efficiency to offer low-priced products to its customers. Its size and dominance has also made it an easy target for anti-capitalist, anti-globalisation and labour pressure groups. The big-box retailer, now feeling the heat from e-tailers and changing shopping habits, is shifting thrust to small stores, e-commerce and a global push to gear up for the future. Experts expect it to push its small-store strategy in new emerging markets that it is entering, including India. It recently scaled back operations in Brazil and China to improve profitability. REVENUES $418.9 bn

Carrefour 
Presence 
Home base is France; present in 33 countries The inventor of the big-box model, despite 
its presence in so many countries, is 
struggling today due to its heavy dependence on slow-growing west European economies, demographic shifts (ageing population, single household and urban lifestyles) and new competitive threats (online, smaller formats). Its obsession with "fixing the hypermarket" meant it was late in embracing multi-channel formats. It is now laying thrust on small-box stores (especially in markets like Latin America and Poland). It is expected to also push for the Drive (click & collect) concept. Under shareholder pressure, it is rationalising its operations in unprofitable markets like Singapore, Malaysia, Indonesia, Poland, Taiwan Greece and Turkey. This could mean complete or partial exit from these markets. REVENUES $119 bn

Tesco 
Presence 
Home base is UK; present in 13-plus countries The third-largest retailer holds the top 
rank in the UK and Hungary; is No. 2 in 
Thailand, Ireland and Malaysia and No. 3 in South Korea and Czech Republic. Yet, it is hobbled by a slow growing home market and is investing both attention and resources in overhauling its UK operations. It is also pushing for smaller-format high-footfall stores like Express and Metro stores, e-commerce, m-commerce and click & collect stores to get back in shape. For future growth, it is increasingly looking to emerging markets like China and India. Its entry strategy in new markets is fairly flexible. It typically prefers the M&A route or through joint ventures and once a JV is established and lessons learnt, it then looks to acquire a majority stake in the JV like Hymall China. It is now also open to entering through the franchise route, like in South Korea. REVENUES $92 bn

Metro 
Presence 
Home base is Germany; present in 33 countries The group's operations are split into 
wholesale, food retail, non-food speciality stores and department stores. It is among the top-three players in nine of its markets from Europe to Asia. But under pressure due to slowing economy, demographic and changing shopping habits, it has recently rationalised operations pulling out completely or partially from Morocco, the UK, Indonesia and Norway. It is the only player among Germany's top 5 forecasted to see a decline in sales by 2016. The first in Germany to try click & collect through its Real Drive format, it is pushing for this and small-box city stores to remain competitive. But when it comes to global expansion, it is largely through Metro Cash & Carry, especially in emerging markets like India. Once a market develops sufficiently, it then tends to roll out its other retail formats.REVENUES $88.9 bn

Kroger 
Presence 
Home base is US; present in only 1 country This is America's largest traditional 
grocer that operates under Kroger, 
Ralphs, Fry's and Smith's. It also operates Fred Meyer hypermarkets, several convenience store chains, and fine jewellery stores. It consistently outperforms the channel and key competitors due to its strong competitive positioning and a compelling price/value proposition. Best-in-class shopper 
    analytics and shopper insights developed 
    in partnership with dunnhumby USA enables customised and personalised marketing and promotional programmes down to shopper level. Its problems are it is exclusively reliant on the competitive and Walmartdominated US market, dependent on bigbox strategy and targets baby boomers. Lagging behind in e-commerce, it will face challenges with young, tech-savvy Americans. REVENUES $82 bn

Schwarz 
Presence 
Home base is Germany; present in 26 countries The Europe-only player is mostly focussed on 
western and central Europe and has discount 
stores under two brands Lidl and Kaufman. The privately held retailer, owned by a family trust, has largely followed an organic growth so far. It is now looking beyond saturated European markets, to eastern Europe, Asia, South Africa and the Americas for growth. As a private label-focused retailer, Lidl is increasingly investing in vertical integration to keep costs low. After setting up its own water bottling plants, Lidl has built its own chocolate manufacturing facilities and will soon build its own bakeries. With its focus on priceaggressive grocery stores, the group is well positioned in the difficult economic climate across Europe. Lidl is likely to start click & collect service in France. As one of the fastest-growing global retailers, its concepts are internationally standardised but are flexible enough to adapt to different markets. REVENUES $79 bn

Costco 
Presence 
Home base is US; present in 9 countries It is a membership-based warehouse 
club that follows the low-cost model with 
the golden rule of never marking up a product by more than 14%. For this it keeps a tight control over costs and maintains high efficiency level in sourcing and shipping. US operations remain its core but it is laying more thrust on new markets, especially in Asia (Japan, South Korea and Taiwan). In the US, it is not only the club channel leader in terms of sales, but continues to separate itself from its competitors like Walmartowned Sam's Club in club productivity. It gets more members per club, bigger average transaction size and faster inventory turns in its stores vis-à-vis its rivals. Slow to adopt e-commerce, it relies heavily on a big-box concept that may not resonate well with techsavvy younger generations.REVENUES $76.2 bn

The Home Depot 
Presence 
Home base is US; present in 5 countries It is a US-based home improvement retailer recognisable for its big orange box format. 
The retailer operates in the US, Canada, Mexico, China, Guam and Puerto Rico. Home Depot segments its customers into three main groups: do-it-yourself customers, who are typically home owners and buy products and complete projects and installations themselves; doit-for-me customers, who are typically home 
    owners and buy products themselves, but arrange for third-party contractors to complete projects or installations; And professional customers, who are typically small business owners or contractors. It operates a global sourcing function from the US with sourcing offices in China, India, Italy, Mexico and Canada. Home Depot is struggling with its operations in China. Coupled with that, a weak demand in the US too is keeping it worried. REVENUES $67.9 bn

Walgreen Co 
Presence 
Home base is US; present in 2 countries Walgreens operates drugstores 
across the US and in Puerto Rico. 
The retailer sells pharmacy, OTC health-care products and more recently has also begun to retail a wide variety of convenience goods, fresh food, general merchandise and, in selected stores, fresh food. It has a strong portfolio of OTC health-care private labels. The majority of stores feature a drive-through pharmacy facility. It finally forayed into international markets in partnership with Alliance Boots which will give it access to high-growth markets like China, Thailand and Russia. It is also repositioning itself from a traditional drug retailer to a provider of "retail health and daily living". It has also acquired drugstore.com to boost its online presence. REVENUES $67.4 bn

Aldi 
Presence 
Home base is Germany; present in 18 countries Aldi is the world's leading hard discount 
grocer and inventor of the concept. It 
has a single-format strategy with a presence in Europe, Australia and the US (where Aldi Nord also owns Trader Joe's supermarkets). Aldi is focused on efficiency and cost control through limited assortments, limited services, low prices, small footprints and private labels. Its global presence is limited to developed markets in three continents. Aldi is struggling with 
    slowing home markets. After withdrawal from Greece, its initial plans to launch in east and central Europe too have been scrapped. It is also losing some ground to its rival Lidl. Aldi is establishing new categories and launching innovations, addingvalue to its ranges with in-store bakery ovens, more convenience and regional foods to boost its sales. REVENUES $67 bn

'GREEN' IS THE WAY

Sustainable construction is getting popular among both developers and buyers as it offers multiple benefits, says NEHA DANI

    The words 'green' or 'ecofriendly' have become buzzwords and developers too have realised the importance of green buildings. 
    According to a 'Go Green' Report by Colliers International, green buildings provide a healthier and more productive indoor environment, reduce energy consumption, minimise materials consumption and the production/procurement impact of materials. They also reduce and recycle waste. Surabhi Arora MRICS-Associate Director | Research, Colliers International feels that the green building revolution in India has modestly progressed to a more mature phase. She says, "One recent trend that has strengthened the green building revolution in India is Green Townships...Developers are using the green tag as a unique selling point and buyers, being aware of the benefits of green buildings are also showing a preference for them." 
Bobby Mukherji - Principal Architect and Founder of Bobby Mukherji and Associates says, "Well-designed green buildings will save money, increase comfort and create healthier environments for people to live and work, using improved indoor air quality, natural daylight, and thermal comfort. Thestructure of the building must breathe." 
    Talking about sustainable techniques, Mukherjee says, "One must implement rain water harvesting and ensure we take up sewage and water treatment. Using glazing systems with triple layered glass that have air cavities and a vacuum in between the glass along with a certain amount of reflection would be of great help. Also external brick walls that are cavity walls or blocks that have cavities greatly help in insulating the building. Reducing glass-surface areas so as to avoid excessive heat from penetrating within, allows for the building to 
remain cool and reduce load on air-conditioning. We also recommend solar panels and LED based lamps and CFLs in terms of lighting." 
    Kalpataru is among the developers actively promoting the green building concept in India, as a founder member of Indian Green Building Council (IGBC). Some of Kalpataru's residential projects are pre-certified with IGBC as green homes. A Kalpataru Spokesperson says, "Kalpataru Aura has one of the largest MBR (Membrane Bio-Reactor Technology) based fully automated STP plants in Mumbai for a residential complex which occupies minimum footprint with a capacity of 850 cubic metres. And to address water supply requirements, a RO (Reverse Osmosis) plant has been installed at the site which would treat the ground water to make it usable for domestic purposes." 
    A Kalpataru Spokesperson 
says, "Green building is a buzz word today in India as there has been great awareness about the concept. Considering the rapid changes in the climate cycle and its impact on mankind, sustainability is the need of the hour." 
    Rustomjee's project Rustomjee Urbania project in Thane has buildings that have been designed and certified with IGBC Gold Rating to meet energy efficient standards prescribed by IGBC green homes. Ozone at Goregaon West is constructed such that it allows light, heat and air into each apartment.Rustomjee Evershine Global City Virar (West) has UPVC Windows and Sewerage Treatment Plants. 
    Boman R. Irani, Chairman & Managing Director, Rustomjee says, "Sustainable development and the need to strike a balance between growth and protection of environment are key factors in today's world and the realty sector plays a very important role in fostering green movement... Definitely, the concept of green buildings is not just a simple trend that's gaining momentum in real estate construction but is also an approach whose importance will only continue to increase. The benefits of green building are multiple." 
QUICK BYTES 
GREEN BUILDINGS PROVIDE A HEALTHIER AND MORE PRODUCTIVE INDOOR ENVIRONMENT AND REDUCE ENERGY CONSUMPTION, AMONG OTHER THINGS 
DEVELOPERS AND HOME BUYERS ARE INCREASINGLY BECOMING AWARE OF THE IMPORTANCE OF GREEN BUILDINGS

Mamata Pulls Out, Govt In Minority

Truce Unlikely, Mulayam & Maya Key To UPA Survival Kolkata/New Delhi: Trinamool Congress boss Mamata Banerjee on Tuesday delivered a stiff blow to the UPA government by withdrawing her support in protest against the hike in fuel prices and the decision to allow FDI in multibrand retail, reducing the regime to a minority and to critical dependence on fickle-minded and ultra-pragmatic players like the SP and the BSP.      The announcement in Kolkata may not pose an immediate threat to the UPA government, but will lead to a spell of political uncertainty that can bring forward the general election scheduled for 2014.      Mamata's bombshell defied the estimate of the Congress as well as many in her own party that she would stop at pulling out her ministers and not go so far as to pull the rug from under PM Manmohan Singh's feet altogether. The contrast from the way she had acquiesced in the Congress's choice of Pranab Mukherjee for President was stunning and left the government reeling.      The West Bengal chief minister blamed the split on the Congress, and said it was the latter's recent unilateralism in reforms measures that had forced her to take the drastic step. "We wanted to continue in the UPA, but were not allowed to stay. We were kept in the dark on major decisions despite our being the second largest ally in the UPA. If we don't take a decision now, they are ready with the pension bill," she said.      Mamata said her ministers will submit their resignations to the President on Friday after jumma prayers at 3pm, but the window of three days is unlikely to result in a resolution because the UPA government is unlikely to accept the terms she has asked for—near-rollback of diesel price hike, a100% hike in the cap on the number of subsidized LPG cylinders, and putting FDI in multi-brand retail on hold.      Congress general secretary Janardan Dwivedi suggested that the possibility of a reconciliation was yet to be exhausted. He said Mamata was still a valuable ally, and the government could look at the issues raised by the Trinamool Congress chief.      However, party sources said compliance with her wish list would amount to an unconditional surrender. It would be a fatal blow to the government's effort to improve its finances and recoup its legacy, and make the prospect of a downgrade by international rating agencies a real one.  MINISTERS TO QUIT AFTER JUMMA PRAYER DIDI STICKS TO HER GUNS, DEMANDS: 1  Scrap decision  to open FDI in multibrand retail 2  Diesel hike of 5  should be cut by 3-4 3  Double number  of subsidized LPG cylinders from 6 to 12 WHAT NEXT? Scenario 1  Cong tries to placate Mamata by meeting her demands. That'll badly erode UPA  govt's credibility—especially after PM and FM had ruled out rollback—and cripple fiscal consolidation. But with or without Mamata, govt unlikely to be gung-ho on reforms any longer Scenario 2  Mamata goes but Mulayam gives support from  outside. Govt survives but saddled with another demanding ally. Mulayam may play hardball to prevent govt's incumbency from rubbing off on SP. May pull the plug when it feels the time's ripe for polls Scenario 3  Minority UPA plays its hand deftly, takes along SP & BSP, softens allies like DMK &  NCP. Govt limps along but is vulnerable to all kinds of pressure from inside and outside UPA DMK to join oppn bandh T he DMK too decided to flex its muscles by joining the opposition's nationwide bandh against the Centre. The DMK brass, which held a meet on Tuesday, is reportedly considering various options. "The party will continue to support the UPA govt but will also see to it that the Centre rolls back some of its controversial decisions," a senior DMK MP told TOI. "Mamata's withdrawal of support should make the Congress realize the need to take coalition partners along on crucial issues."P 17 Early polls not improbable T he UPA can count on over 300 seats after factoring in outside support, but the figure might be less comforting than it seems, given a deepening disorientation gripping the government. If the impression of a lame duck government deepens, it can only alter the estimates about the longevity of the regime. The BJP may not be battle-ready, but will be prepared to take its chances and not wait till 2014. P 17 Congress can't rest easy on SP, BSP cushion      Acapitulation would also defeat the government's effort to buff up its image by projecting the impression of a freshly-summoned will to press on with the reforms agenda. To the contrary, it would appear to be suing for peace and that too in sackcloth and ashes if it signs on to Mamata's agenda. Mamata was in no mood to relent, and showed her hostile intent by echoing the BJP's charge that FDI in retail was intended to distract popular attention away from Coalgate—something which also dashed hopes of Mamata extending outside support.      With Mamata spurning all overtures from the Congress, including the one that Prime Minister Manmohan Singh himself made on Monday, for talks, there is a strong likelihood that resignations of Trinamool ministers will be accepted without much delay and the vacancies filled up when the reshuffle takes place.      The desertion of Trinamool's 19 members in Lok Sabha leaves the UPA with a bench strength of 254 or 18 short of the majority mark in Lok Sabha. The government does have "reserves" like the SP, BSP and RJD who have consistently rescued the government from messy situations, and can count on several smaller parties and Independents, who usually tilt for the regime of the day.      In fact, the support from these quarters can take the UPA's figure to above 300. The Congress's calculation puts the tally of the ruling alliance at 282 even after discounting the 22 Lok Sabha members belonging to Samajwadi Party which hopes to profit from an early election.      However, the cushion will work in "fair weather" conditions, offering no guarantee against "rent seeking" by Mulayam Singh Yadav and Mayawati who can ruthlessly leverage their support. The government faces no lifethreatening risk immediately since it is not required to face Parliament before January 6, but its ministers are already looking forward to what they called a hobbled existence.      "We will have to deal with demand-based support of these parties and that too on a day-to-day basis," said a senior Congress leader, confirming the estimate that the Trinamool's pullout has rendered the government fragile. Even for following up on the measures that triggered Mamata's withdrawal, government will be dependent on players whose support to reforms have been opportunistic.      The SP repeated its opposition on Tuesday while the DMK's support to the bandh against fuel price hike on September 20 underlined the problems awaiting the reformers in the government.      Mamata pointed to the cost that her strike may exact. "The government can stay for 3 months or six months, I don't know. But they have lost the credibility. And if they cannot maintain friendship with us, then they cannot maintain friendship with anybody," she said.      The West Bengal CM also said the Congress's tactic of playing one partner off against another had its limitations and she had exposed that. Accusing the Congress of indulging in "blackmail politics, she said, "When they have trouble with Mamata, they go to Mayawati, if they have trouble with Mayawati, they go to Mulayam, if there is problem with Nitish (Kumar of JD-U) they go to Lalu, this blackmailing politics."  DIDI SPEAK      We have a majority      in Bengal, the Congress doesn't have the same at the Centre  Can we live well when our head is cut off? The common man is suffering. Subsidy is given by people's money and not government's  We'll oppose price hike in fertilizer and pension bill. Someone has to bell the cat. There's no reason for Congress and Left to rejoice. Bengal has taken this big decision for the country

Rental registration to go online

Mumbai: From the beginning of the next year, renting a new placewillbecome a simpler and cheaper task with the state government planning to rolloutits online registration process. Withtheimplementation of the newsystem,the paper workcan becompletedwithout a visitto a registration office, and at the same time, the amount often paid to agents for the process can alsobesaved. 

    The proposed launch of the online registration will be part of a reform to make revenue collection efficient as well as customer friendly and the state will first introduce it for leaveand-licence(L&L) agreements. 
    S Chockalingam, IG of registration and controller of stamps, said the plan would be implement within three months and the government hadstartedthe processof developing a secure portal for the transaction. "Arrangements are also being made so that stamp payments could be made simultaneously," he added. Besides being customer friendly, revenue minister Balasaheb Thorat said, the move would also help decongest registration offices; L&L documents accounted for over 32% of the papers (69,000 out of 2,10,000) being registered in Mumbai in 2011-12. If the registration offices is no longer required to deal with the L&L documents, sale agreement registration process will getexpedited. 
    Flatowners andtenantswill havetwooptionsto go aboutthe procedure. They can either download the form from the Internet and fill the details themselvesor seekhelp at a state-run call centre. Those downloading the forms will require high-resolution web cams and biometric devices to take pictures and thumb imprints. It will also necessitate digital signatures of thetwo parties. "An onlinecopy of the registered document could be downloaded after the processiscompleted," Chockalingam added. 
    For thosewhowillseekhelp from a call centre, an authorized person, along with the gadgets required,willbesentto the tenants and landlords on a dayfixedby them. "An e-receipt will be issued as proof of transaction," Chockalingam said. The registered document could bedownloadedjustlikethefirst option. Withlimited manpower, the government will outsource the visit service. "Its tender process will begin next week when request for proposals is floated," Chockalingam said. While citizens would have to pay for the service, the government could lower the overall registration feefor onlinetransactions, an officialsuggested. AT THE CLICK OF A MOUSE 
    32% of all registered documents in 2011-12 in Mumbai were leave-and-licence agreements 
    In 2011-12, Mumbai saw 69,000 rental registrations, Pune 43,000 and Thane 12,500 How will the new system help? 
    The registration process for L&L agreements will go online, allowing people to apply from anywhere 
    With the need for visiting registration offices removed, the cost of registering the document will drop. The money paid to agents at registration offices will be saved 
    The process of registration will be expedited 
    Consequently, registration of sale deals at the offices will be faster 
Some points to ponder 
    It may take citizens a while before they are convinced that the e-system will work 
    The state will have to carefully choose the agency to which it will outsource the data gathering process

'FDI in retail in India to help improve supply chain, boost growth'

New Delhi: Foreign direct investment (FDI) in India's largely unorganised retail sector will help curb inflationary pressure by easing supply side constraints and revive economic growth, analysts said.

"FDI in multi-brand retail is seen as a very important reform to revive the economy and it will ease supply side pressures and mitigate inflation and benefit, especially, the small and medium enterprises by way of greater market access and higher profit margins," said Sandip Somany, president, PHD Chamber of Commerce and Industry.

Somany said overseas investments would boost business confidence in Indian economy.

In a major step forward to give a push to reform agenda, Prime Minister Manmohan Singh's government Friday took a decision to allow upto 51 percent FDI in multi-brand retail and opened up the aviation sector to 49 percent investment by overseas airlines.

"FDI infuses technological advancement, enhance production possibilities and induce capital flows which help in maintaining general macro-economic stability," said Somany.

According to the latest Central Statistical Organisation (CSO) data, the Indian economy grew at a sluggish 5.5 percent in the April-June 2012 period as compared to 8 percent in the corresponding quarter of the previous year.

The GDP growth had slumped to a nine-year low of 5.3 percent in the quarter ended March.

The decision to push forward the reform process has come at a time when business sentiments have taken a beating, GDP growth is near decade low, inflation remained stubbornly high and the government was criticised for "policy paralysis".

Sanjay Dutt, executive managing director, South Asia, Cushman and Wakefield, said allowing FDI in multi-brand retail was a "much awaited" and "much needed" initiative.

"In the next 12-24 months, international retailers will accelerate their entry strategy. As a result, the developers involved in shopping centre development, who were badly hit since 2008, will also get a tremendous boost and we will witness serious players expanding in this space," said Dutt.

"Over the medium- to long-term, the retail sector, real estate industry and the end-consumers will benefit from the move and the economy on the whole will gain momentum, depth and size," he added.

A Sakthivel, chairman of the Apparel Exports Promotion Council (AEPC), said the move would create employment opportunities and boost economic growth.

"It will give the much needed fillip to the entire textiles industry. Employment opportunity will be created in plenty. Manufacturing activities will get a boost," said Sakthivel.

The AEPC chairman said overseas investors would help create better infrastructure in India's retail sector that would benefit farmers as well as end users.

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"Farmers will get better price of the produce as well as consumer will derive value for their money. It will lead to easing of inflation in the country. Gradually GDP will pick up and economic outlook will improve," Sakthivel said.

However, Ajay Jakhar, chairman, Bharat Krishak Samaj, said the government should have done more to address the concerns of farmers.

"We are not exactly thrilled as we would have hoped for more conditions to help farmers become a part of India's growth story," Jakhar said.

Leading industry chambers also hailed the government's decision, saying overseas investments would help improve sentiments.

"The move to open up multi-brand retail is a major step in the right direction and this will not only end a long standing uncertainty in policy making but also boost investors' confidence besides promoting supply chains in the agriculture sector," Adi Godrej, president, Confederation of Indian Industry (CII)

R.V. Kanoria, president, Federation of Indian Chambers of Commerce and Industry (FICCI) said the decision would usher in a retail revolution in the country.

"There are several benefits that would flow from this decision. We will see infusion of new technology across the agriculture value chain as well improvement in the back end infrastructure," said Kanoria.

"There will be a multiplier effect in terms of employment generation and domestic manufacturers will benefit as they integrate with the supply chains of global retail majors. Consumers will have a wider choice and get better deals," Kanoria added.