METRO AND MONORAIL: A BOON FOR PROPERTY MARKET IN MUMBAI SUBURBS

VIBHA SINGH explains how the metro and monorail projects are being envisaged as game-changers, in terms of connectivity between the eastern and western suburbs and thus, the realty markets here     PNagarajan, a resident of Andheri, is upbeat about both, the monorail and the metro project, even though the projects have been delayed. For many like him residing in the suburbs, these projects are going to make life much easier. According to property analysts, these projects are being envisaged as game-changers in terms of connectivity and will reduce both, traffic congestion and commuting time.      Once the metro and monorail projects are implemented, it will ease the traffic problems in the city and will come as a major relief for residents, especially those residing in the eastern suburbs, who spend half their time travelling to and from the railway station.      The Chembur-Wadala monorail section, which is India's first, is set to be operational in the coming months. The travel time between Wadala and Chembur will reduce by 21 minutes after the monorail is complete. The 19.54-kms monorail corridor is the world's second longest after Japan's Osaka corridor, which is 23.8 kms. Six rakes will be pressed into service for Phase I. Once they are operational, the trains will run every nine minutes between Wadala and Chembur.      There are seven stations in the first phase - Wadala, Bhakti Park, Mysore Colony, Bharat Petroleum, Fertiliser Township, VN Purav-RC Marg and Chembur. According to Manju Yagnik, vicechairperson, Nahar Group, "Today, the local trains are the lifeline of Mumbai. However, they are burdened too much due to huge traffic and passengers. The arrival of the metro and monorail is going to make life hassle-free for the residents. The Versova-Ghatkopar line of the metro rail, will provide a vital east-west link and will reduce travel time from 90 minutes to just 20 minutes. With India's first monorail route, the Chembur-Wadala route is expected to be operational soon. A huge amount of real estate development is likely to take place along this corridor."     Even Dilip Kawathkar, public relation officer, the MMRDA, shares similar views, as he says, "In the case of the metro project, which is going to connect Versova to Ghatkopar via Andheri in the first phase of the 11.4-kms elevated track, the connectivity between the eastern and western suburbs will provide much-needed relief to commuters. Currently, the journey on clogged roads is made tedious by the numerous traffic jams." Also, a consultant has been appointed to study the corridor of the Charkop-Bandra-Mankhurd metro, which is going to be constructed underground, instead of an elevated one and be extended to Dahisar.      Surendra Dewan, a property consultant in Chembur, explains, "If you are an investor, it makes sense to keep track of these plans and act in time, before property prices in areas that the project will connect rise. Locations that will gain from it are, Andheri, Ghatkopar, Chembur and Wadala, which have already seen a decent jump in property prices."      Talking about the metro project, Ashutosh Limaye, head-research and real estate intelligence service, Jones Lang LaSalle India, informs, "The first phase of the Ghatkopar-Versova link is supposed to become operational this year. In the eight years since the project was announced, prices in many areas that will benefit from the link have risen by as much as 400 per cent."      Expectedly, the monorail project has already driven up the real estate values. Property analysts anticipate that after the monorail gets operational, prices in these localities and in areas falling on the Chembur-Wadala stretch, such as Tilak Nagar, Kurla, Chunabhatti, JTB Nagar and Wadala Junction, will appreciate by a minimum of 20 per cent.      "We believe that both, the metro rail and monorail will have a great impact on the infrastructure development of the area. They will reduce traffic congestion and make the city smaller," states Shailesh Puranik, managing director, Puranik Builders Pvt Ltd.      "The government is also supporting the efforts with higher Floor Space Index (FSI), increasing the value of land parcels and built-up spaces. Prices in these locations have risen more than in others. The demand, too, is healthy," an official of the MMRDA says.      Kawathkar states, "The Mumbai transformation support unit has also come up with a suggestion to give higher FSI around the area of the upcoming metro stations. This should make those who wish to opt for redevelopment happy." He concludes, "With the monorail coming up from Chembur to Jacob Circle via Wadala, many residents have been approached by private developers, seeking redevelopment. The number is as high as 60. Residents must understand that their property value is most likely to jump substantially, once the metro or monorail run through their area."  QUICK  BYTES      BOTH THE METRO RAIL AND MONORAIL WILL HAVE A GREAT IMPACT ON INFRASTRUCTURE DEVELOPMENT OF THE AREA. THEY WILL REDUCE TRAFFIC CONGESTION AND MAKE THE CITY SMALLER.      IF YOU ARE AN INVESTOR, IT MAKES SENSE TO KEEP TRACK OF THESE PLANS AND ACT IN TIME, BEFORE PROPERTY PRICES IN AREAS THAT THE PROJECT WILL CONNECT RISE. LOCATIONS THAT WILL GAIN FROM IT FOR INSTANCE ARE, ANDHERI, GHATKOPAR, CHEMBUR AND WADALA.

India ready to block WTO deal at Bali

Won't Compromise On Food Subsidy, Willing To Take Blame For Failure New Delhi:The government on Thursday decided that it will refuse to accept any deal at the World Trade Organization's (WTO) Bali meeting that does not protect its right to offer subsidized food, even if resulted in India being blamed for blocking progress. The tough posture ahead of next week's ministerial meeting was endorsed at the Union cabinet meeting chaired by Prime Minister Manmohan Singh after WTO members failed to agree to India's demand for a restriction on any disputes at the multilateral body in case the 10% subsidy cap is breached.      India wants the interim solution or the "peace clause" to be in place till a permanent solution is found. But, WTO members, led by the US, are willing to offer truce only for four years, while promising to work out a final solution during this period, something that the government is not convinced about.      Under current rules, amount spent on purchase of foodgrains at the minimum support price and sale at subsidized rates through the public distribution system cannot exceed 10% of the value of production. India fears that it may go past the limit once the Food Security Act is fully implemented. India is a key member of the G-33 alliance, which also includes China and Indonesia, which are seeking a change in the rules for calculation of subsidy.      The commerce department has suggested two options to the cabinet but the government decided that it will not agree to the proposed agreement on trade facilitation if India's interests on food security were not protected. "Since India has consistently insisted on balance in the Bali package, it may not be desirable to endorse the Trade Facilitation Agreement (TFA)," said a source, quoting the cabinet note. TFA is meant to ease shipment of goods across the border by simplifying customs procedures and speeding up clearances.      Apart from insisting on a permanent solution to the food security issues, G-33 also wants an exemption from any dispute at the WTO for violation of the agreement on subsidies and countervailing measures. Although developed and several developing countries enjoyed protection from facing penalties for selling subsidized food in other markets, which impacted goods from other countries, the benefit ended in 2004.  TALKING TOUGH      Govt wants no disputes at WTO till permanent solution to the 10% cap on food subsidy is found      To seek an exemption from any disputes under the subsidies agreement      India will only sign proposed Trade Facilitation Agreement if demand on food security is met

Lodhas buy iconic London bldg for £300m

Mumbai: In one of the biggest real-estate deals this year, the Lodha Group has bought the iconic MacDonald House, a five-storey office-cum-home of the Canadian High Commission in London, for £300 million (around Rs 3,000 crore), giving it a toehold in the global real estate business. 

    It has a total floor area of 160,000 sq ft (gross internal area) and is built on a land area of 0.67 acres. Canada had bought the building from the US government in the 1960s. Lodha plans luxury homes on London plot 
Mumbai: The Lodha Group has bought the iconic Macdonald House in London. In February, the Canadian government had put on sale the palatial building, named after the country's first prime minister Sir John A MacDonald, to cash in on London's surging real estate market. 
    Industry sources said the deal was signed on Thursday after Lodha paid the entire bid amount, making it the group's first major property acquisition abroad. Four to five bidders from the Middle East and Asia were also in the fray for the property, whose reserve price was 250 million pounds. 
    International property consultants said the building is located off Grosvenor Square in Mayfair, one of the most desirable areas in London and prices here can reach up to 2,000 pounds a sq ft. "Lodha is planning to construct a highend luxury residential building here. The construction, however, will not start till next year as London planning authorities have not changed the use from commercial to residential,'' said consultants close to Lodha Group. 
    Abhishek Lodha, managing director of Lodha Group, did not respond to queries seeking comment while the Canadian Embassy could not be contacted. 
    Incidentally, this is the second property owned by a foreign government purchased by the Lodha Group. Last December, it bought Washington House, staff quarters of the US consulate on Altamount road in Mumbai, for Rs 342 crore.
    Lodha's MacDonald House buy comes three years after Sahara India Pariwar in 2010 acquired the iconic Grosvenor House hotel in London for 470 million pounds. Sahara has put the hotel back on the block.

Fresh policy set to boost cluster redevpt, extend it across Mumbai Govt Plans Incentives, May Help Acquire Land

Cluster redevelopment is set to get a boost with a new policy offering more benefits to both developers and residents and making projects more attractive than standalone redevelopment.      For instance, the bigger a cluster undergoing redevelopment, the larger will be the flats of individual owners. Moreover, it will be easier for housing societies to band together and negotiate with a developer. Now, a developer buys out properties piecemeal and then takes up cluster redevelopment.      "While the minimum area will remain one acre, the larger the area taken up, the bigger will be the flats that residents can look forward to. The minimum size of a flat will be 300 sq feet," said a source.      The proposed policy that will replace the existing cluster redevelopment policy under Development Control Rules 33(9) is likely to apply across Mumbai and not just south Mumbai that has a large number of old and dilapidated buildings, added sources.      The BMC will mark the one acre areas that can form a cluster. Several suchclusters can then come together for a mega-cluster redevelopment. "Unlike the old policy, the focus this time is on land-pooling. The government plans incentives to ensure more societies come together for redevelopment. If there is some hurdle, it will help with land acquisition," said the source.      Along with basic size, the government may also define the incentives to be provided to mega clusters to avoid disputes and litigation.      A committee including the civic and MMRDA commissioners and the Slum Rehabilitation Authority chief and led by urban development principal secretary Manu Kumar Srivastava is reworking the policy. It has held consultations with the Property Owners Association and the Maharashtra Chamber of Housing Industry.      The sources said the urban renewal scheme is likely to comprise three levels of planning: macro (broad zoning of land and arterial roads), meso (the BMC's development plan that identifies land use) and micro (for every cluster). The three will fit in, allowing the authorities control over how the city develops.      Developers who have started cluster redevelopment will have the option to migrate to the new policy.      The move comes as the 2009 cluster redevelopment policy failed to deliver. The ambitious Rs 5,000-crore Bhendi Bazaar project of the Saifee Burhani Upliftment Trust spread over 14.5 acres is going very slowly. So far, only five proposals have been approved and one at Parel implemented.  BIGGER FLATS, BETTER CITY PLANNING  OLD POLICY NEW POLICY  Minimum area one acre Minimum area one acre  Developer obtains consent from residents, purchases properties and seeks BMC permission for cluster redevelopment BMC may get to draw boundaries ofclusters. Resident groups can come together to negotiate with builder for redevelopment Residents of various clusters can group together to form a megacluster  Minimum flat size 300 sq feet. Larger flats at discretion of developer Minimum flat size 300 sq feet, but for mega clusters govt plans to offer larger flats Acquisition to be done by developer Govt to lay out options, including acquisition by the state to push redevelopment  No urban renewal scheme master plan. BMC has no control on city's overall development Three-tier urban renewal scheme — a master plan, a development plan and a plan for every cluster. All redevelopment to be in sync with master plan. BMC to have control on overall development of city      Does not ensure enough public amenities. Skewed development      Proposes planned development of the city

Net gain: India poised to beat US Internet Users To Grow To 243mn By June From Over 200mn Now, Says Study

Mumbai: Internet penetration in the country may not have crossed 16% of the population yet, but in absolute numbers this percentage works out to nearly 10 times the population of Australia. 

    By October, the nation had crossed the 200 million mark, says a report released by the Internet And Mobile Association of India (IAMAI) and IMRB. The report estimates 243 million internet users in the country by June 2014, overtaking the US as the world's second largest internet base after China. 
    The US today has an estimated 207 million internet users, while China has 300 million. The 205 million internet users that the IAMAI reports for India are not all active users, or those who use the internet at least once a month. 
    "There is every reason to believe that they will turn into active users in the near future," IMAI associate vice-president Nilotpal Chakravarti said. 
    While Indians primarily use the internet for communication, largely in the form of email, social media is also an important driver of internet use here. 
    This facet of the IAMAI report can be corroborated with data from other sources such as Facebook, according to which India had 82 million monthly active users by June 30, the second largest geographical region for Facebook after the US and Canada. Facebook does not operate in China. 
    Penetration in the country is driven largely by mobile phones, with some of the cheapest and most basic handsets today offering access to the internet. The country has 110 million mobile internet users, of which 25 million are in rural parts. 
    The contribution of mobiles to internet penetration in rural parts is especially significant, with 70% of the active internet population in non-urban areas accessing the web via cellphones; this may have to do with the difficulty in accessing PCs. 
    It was found that 42% of rural internet users preferred local languages. The high prevalence of content in English is a hurdle for most of them. 
    College-goers remained the largest users of the internet in the country, followed by young men. 
    While the IMAI report paints an optimistic picture, a report by the Broadband Commission for Digital Development ranked India 145th in around 200 countries for the percentage of individuals using the internet. 
    But IMAI associate vicepresident Chakravarti said India's performance when it came to internet penetration was an achievement given the country's current infrastructure. 
URBAN AND RURAL USAGE TRENDS 
    Mobile net has penetration of 65% among the 108 million urban active net users (as of June). In rural parts, 70% of active net population accesses it using mobiles 
    In rural parts, 42% of people prefer accessing internet only in local tongues 
REASONS FOR GOING ONLINE 
    Of the active internet users surveyed, close to 90% used the internet primarily for online communication, largely email. It was found that 75% engaged in social networks and 69% used the internet for entertainment

NEW US LAW Immigration Bill will Decimate Indian IT Cos

The much-beloved India Caucus in the US House of Representatives organised the first-ever Diwali celebration on Capitol Hill recently, but it has also quietly deposited a very inauspicious gift at India's door. It is called HR 15, a bill that if passed in its current form would essentially shut down Indian IT companies or so reduce their strength as to make them negligible. It is one of the most anti-India pieces of legislation. Of the 135 members of the India Caucus, 63 have not only supported the bill but also co-sponsored it in a measure of serious support. The Democratic co-chair of the India Caucus, Congressman Joseph Crowley of New York, is among them. So far, 187 Congressmen are on board, including three Republicans, in the 435-member House. Much of the bill deals with illegalimmigration and border security issues but it also includes "killer" provisions on H1-B and L-1 visas. It is important to note that for the many complaints the US Congress has articulated against India lately, India has raised one real concern this year: against the visa provisions in the immigration reform bill. The bill, introduced on October 2, is essentially a replica of the equally harsh Senate bill, passed this summer. It does nothing to lessen the pain for Indian companies despite many representations and briefings to the US Congress and administration. The likelihood of the House bill being passed is slim because the Democrats are in minority. But be that as it may, the language reflects the current sentiment on the Hill. And that is worrisome. Like the Senate version, the House bill takes specific aim at H1-B and L-1 visas, the two categories used most frequently by Indian IT majors. Bothbills prohibit a company from having more than 50% of its workforce on H1-B or L-1, they drastically raise visa fees, require companies to pay much higher wages and they ask that mandatory ads be published to recruit US workers before hiring an H1-B visa holder. The only relief: the bills raise the cap on H1-B visas from 65,000 a year to between 1,15,000 and 1,80,000, depending on the demand. Visa fees for a company using H1-B workers could rise to $5,000 per application if 30-50% of its employees are on H1-B. If its workforce is 50-75% on H-1B, it will have to shell out $10,000 for each visa application. If this were not enough, thebills want companies to reduce dependence on H1-B visas by 2016 down to 50% of the workforce. Then there are several reporting requirements to the department of homeland security. India's software industry association Nasscom says the provisions amount to a non-tariff barrier. The push for penalising H1-B workers has come both from a few US tech giants and from the rank and file of American tech workers — both really don't like competition when it comes down to it. They are apparently concerned about the plight of H1-B workers who slave away in sweatshops on low wages. Yet, a study by the Brookings Institution found that H1-B workers make 26% higher wages than their American counterparts. Even if you accept that H1-B workers displace some American workers, it is equally true that other Indian companies have invested billions in the US and created thousands of jobs. To cite just one example: Essar is building a steel plant in Minnesota at the cost $1.7 billion, said to be the largest private sector project in North America. Back to the India Caucus and its role as guide and mentor on bilateral issues of concern. It might be time for the Indian community to ask some real questions: what does its money really buy besides photo-ops? Indian diplomats were equally ineffective in creating a balanced debate. They were unable to energise the Indian community to use its clout to calm down Congressional tempers raised by a US business community gone wild. When an SOS went out to Indian community leaders, a majority reportedly didn't respond. The USIndia Business Council has made an attempt to counter the anti-India atmosphere but with minor success. What's missing is an overall strategy that links Indian diplomats, consuls general in various cities, the Indian-American community, India's lobbyists and policymakers in New Delhi into an intelligent design.  The writer is a geopolitical analyst Seema Sirohi

CM TO MEET PM, SEEK NOD FOR KEY PROJECTS

Chief minister Prithviraj Chavan and his colleagues in the state administration are meeting Prime Minister Manmohan Singh in Delhi on Wednesday to discuss crucial development projects and administrative decisions. People with knowledge of the agenda said Indu Mill land and Navi Mumbai airport would be top-priority issues and there might even be some concrete decisions to impress people ahead of the general election

Airport at Navi Mumbai | CM will seek final go-ahead for global tender process to appoint developers for Navi Mumbai airport and a decision on how much shareholding should be there for developer in project cost 
Churchgate-Virar Elevated Rail Corridor 
| Whether to go ahead with cash contract or with private partnership by offering more FSI is to be decided Agriculture | State is demanding a firm decision on restricting import and export of agricultural products such as sugar and onion to check hoarding by farmers and traders, which affects retail prices Coastline | A discussion will be held on Centre's draft proposal to extend coastline up to point where saline water streams flow on land instead of 1-km distance from coast. State leaders say this move will block development on land worth over Rs 35,000 crore in Navi Mumbai Indu Mill Land | Expedition of process of handing over land to state for Dr Babasaheb Ambedkar memorial will be sought. The state wants a decision before Ambedkar's death anniversary on December 6 to avoid wrath of his followers Shivaji Statue | Need directives from PM to various departments to give 45 different permissions required to build statue in sea near Raj BhavanCoastal Road | State is seeking in-principle nod so that final drawings can be made and submitted for permissions. Plan requires amendment in Environment Act

The 90,000 crore Surprise New research argues that the public distribution system lifted 38 million people out of poverty in 2009-10. And it’s getting better. Don’t thank the UPA, though

 In the vociferous debate around the food security bill, critics seemingly had evidence and history on their side. The public distribution system (PDS) has for long been seen in policy circles as a kind of budgetary black hole, sucking in enormous resources and giving back very little in return, in terms of poverty reduction or better nutrition. Critics charged that the implementation of the food bill, with its legal guarantee of minimum levels of food for a large mass of the population, would only lead to an increase in food subsidy, currently pegged at 90,000 crore for 2013-14. The conclusion: more taxpayer money will go down the drain. 

    Now new research argues that the population pulled out of poverty in the last decade, thanks to PDS, has actually increased sharply. The research, by Himanshu, an associate professor at Jawaharlal Nehru University, and Abhijit Sen, member of the Planning Commission, is due to be published in the Economic and Political Weekly. 
    In 1993-94, there would have been around 413 million poor, if there had been no PDS from which people could buy subsidised food. Of this number, around 10 million (2.4%) were lifted above the poverty line because of access to PDS. In 2004-05, following a shift to targeted PDS, that number had risen to 14 million out of 417 million — or 3.3%. But it was after 2004-05 that a sharp shift happened, with the number of poor falling to 402 million, despite it being a drought year, of which 38 million (10%) were lifted out of poverty due to PDS. And in 2011-12, preliminary results indicate that without any system of food transfers there would have been 330 million poor in the country. Because of PDS, the number of poor lifted out of poverty was 50 million (15%). About 30% of the reduction in the poverty rate between 2004-05 and 2009-10 was attributable to PDS, according to the paper. 
    And that's not even the whole story, since the food subsidy system also supports the midday meal scheme which accounted for another 17 million poor being lifted out of poverty in 2009-10. 
Has PDS Changed? 
Underlying these shifts is evidence from other surveys of a sharp shift in the nature and reach of PDS. In the late 1990s, the scope of PDS was narrowed sharply, with the introduction of the so-called targeted PDS, which created two categories of consumers — those below the poverty line who got grain at highly subsidized prices, and those above the poverty line who received grain at far less subsidized prices. This shift, in 1999 under the NDA government, led to a sharp drop in the coverage of PDS and a jump in the 'leakages' — the share of grain that was supposed to reach the intended beneficiaries but didn't — from the system. 
    But it was after 2004-05 that PDS reversed course. It was a policy reversal, effectively resulting in a more inclusive and broader system in a number of states, which was rarely officially acknowledged as such. It may be tempting to align this shift with the change in governments at the national level with the UPA coming to power, but the Congress-led government at the Centre had relatively little to do with this shift. As the authors point out, much of the effort at improving PDS was done by individual states. These included Tamil Nadu, Chhattisgarh, Odisha and Bihar. "Such ownership and effort [by states] appears crucial," say the authors. "Its lack was one reason why PDS failed before 2004-05..." And interestingly, increase in the expenditure on the food subsidy and PDS system by both the Centre and states since 2003-04, as a share of GDP, has been entirely due to increased expenditure by states, not the Centre. The other big shift that actually led to a de facto broadening of PDS was a Supreme Court order in 2001 which required all states to implement the midday meal scheme. 
Out of Poverty 
In their study, the authors looked at data on families recorded in the large scale National Sample Surveys, who bought food from PDS in different years. They valued the amount of food bought from PDS at their market prices in those years. The difference between the subsidized price the families actually paid, and what they would have paid had they bought that food from the market amounts to a transfer of funds from the government to the poor. The authors then calculated the number of poor people who, because of such a transfer, ended up with a consumption level that was higher than the level which determined the poverty line. The authors found that 1.3% of the population was lifted above the poverty line as a result of such transfers in 1993-94, 2.6% in 2004-05 and 4.6% in 2009-10. "...increased food transfers accounted for 32% of reduction in the Tendulkar Head Count Ratio between 2004-05 and 2000-10," say the authors. The Head Count Ratio is the technical term for the poverty rate published by the Planning Commission, which was 22% in 2011-12, down from 29.8% in 2009-10 and 37.2% in 2004-05. 
    The authors acknowledge that 2009-10, being a drought year, could well be an anomaly, since high food prices would have forced many more families to be reliant on subsidised food from PDS, leading to a bounce in the number of people who benefitted from it. However, say the authors: "Since a vital role of PDS in food security is to cope with drought and high food price inflation, this is a matter that should be noted rather than played down when evaluating whether PDS is effective or not." Despite criticism of the National Food Security Act, it may have history and evidence on its side to a greater extent than usually believed. 
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