Builders at private lenders’ mercy as demand falls, forced to pay interest rates as high as 42%

NEW DELHI | BANGALORE: The stress among real estate developers is now showing clearly. Private money lenders are back in demand with small and mid-sized real estate developers picking up short-term money at interest rates as high as 42% a year to avoid the prospect of reducing property prices.

With home sales dropping and banks being picky about lending to the sector, many real estate developers are facing a liquidity crunch, which would eventually force them to reduce prices to book sales. This, they fear, could induce a downward spiral in property prices.

According to the National Housing Bank's residential housing index, Residex, 22 of the 26 cities it tracks have already seen a marginal decline in home prices in the April to June quarter. A recent report by property research firm Liases Foras puts the cumulative nationwide unsold inventory at 670 million sq ft, or around 6 lakh apartments, putting further pressure on real estate developers.

"Raising money even at exorbitant rates, developers hope, will help them fend off this crisis situation and keep prices steady till the economy picks up," says Ambar Maheshwari, managing director of corporate finance at property consultancy Jones Lang LaSalle.

Recently a Noida-based developer who had managed to sell only 30% in his housing project and needed money to pay some government charges and continue construction, borrowed Rs 20 crore from a local money lender at 4% a month for a few months and a collateral that was at least twice the value of the loan.

If he hadn't, the only option for him would have been to covertly sell some apartments at a discount and continue construction. Since he borrowed, he was able to reach a certain construction milestone after which construction-linked payments of his existing customers came in. A small Chennai-based builder, who did not wish to be named, says the market is very tight and even raising Rs 30 crore from banks and PE funds is difficult today for a small developer. "This is where money lenders come in, even though they charge us steeply."

When a developer does not have enough money to continue construction, the first impact is that existing buyers stop paying installments, explains Anckur Srivasttava, chairman of GenReal Property Advisers. "He then has no option but to cut prices or go for such expensive money," he adds.

While developers of some repute are able to raise money at 2-3% a month, the smaller ones are even paying close to 4% a month with greater collateral.

The desperation level, of course, varies from developer to developer which is being seen as an opportunity by several HNIs, exporters and diamond merchants, entrepreneurs and family offices.

Take the case of Rajesh Mehta, chairman of Bangalore-based Rajesh Exports, one of India's biggest gems and jewellery exporter — he has invested close to Rs 700 crore in such transactions.

"We are seeing huge pain in the market but are very selective in who we work with. There's demand for such money even from the best of developers," says Mehta, who has lent to mostly Bangalore-based developers at interest rates in the 2.5% to 3.5% a month range.

The former owners of Patni Computers that was sold to Nasdaq-listed IT services company iGate for $1.2-billion (Rs 5,450 crore) at that time have been investing their money in different spheres that includes buying completed real estate assets and also lending to real estate companies.

They recently lent to a Bangalore-based developer at an interest rate in the 20-25% a year range. "There are very few cashrich developers today. All others are looking for money. When we lend, we look at the builders' reputation, his ability to actually complete the project and the quality of the security he is offering," says Dinesh Maheshwari, who heads such investments for some of the former owners of Patni.

A Delhi-based exporter, who did not wish to be named, says he and his other HNI friends have set up a consortium of sorts that has been lending to several real estate developers in the region. "Interest rates might be steep, but today they are willing to pay," he says. And this demand for short-term money is only set to grow louder.

As elections draw closer, a lot of the money that has been put in by politicians and people around them is being pulled out of real estate companies, says Srivasttava, who is currently helping five developers across the country raise money from non-banking finance companies and some money lenders as well.

"Developers will get more desperate for money going forward as the situation is not likely to improve till after the elections," he says.

Amar Merani, chief executive officer of NBFC Xander Finance, says his company receives 10-12 requests from developers who are looking for money every month. "They are looking at raising anywhere between Rs 40 crore and Rs 250 crore to tide over temporary cash flow issues and refinancing," he says.

source:- http://economictimes.indiatimes.com/markets/real-estate/realty-trends/builders-at-private-lenders-mercy-as-demand-falls-forced-to-pay-interest-rates-as-high-as-42/articleshow/22826946.cms?intenttarget=no

Mahindra Lifespaces, GE Shipping in dispute with locals over land ownership

MUMBAI: A tussle for control over unused land with development potential in a residential project has erupted between Mahindra Lifespaces Developers, GE Shipping and existing residents of their project, Great Eastern Gardens, in a suburb of Mumbai, a development that can have repercussions for builders and home buyers. 

Around 400 residents of the complex are seeking control of the undeveloped land worth over Rs 800 crore inside the complex. The residents say that the vacant plot has a total development potential of 7.5-8.0 lakh sq ft and are objecting to further development by the developers.

GE Shipping and Mahindra, however, claim that they are the rightful owners of the land parcel and will go ahead with their plan of constructing two more buildings. But the irate residents say that the developer had not informed them about their proposed plan when they booked their apartments and had not made a complete disclosure of the development potentiality. Therefore, they argued, that the proposed buildings are not part of the original layout. The complex includes six residential buildings comprising 4 condominiums. 

"Residents of Great Eastern Gardens are entitled to balance (of) FSI, TDR and additional FSI as the property has already been submitted under the provisions of Maharashtra Apartments Ownership Act, 1970, by declaration and supplemental declarations, the last of such supplemental declaration being as far back as in December 2008 and, moreover, since GESCO failed to convey the land within four months of last supplemental declaration," said Savitri Dadhich, a resident of the Great Eastern Gardens and partner at Dastur Dadhich & Kalambi, Advocates & Solicitors.

But Mahindra Lifespaces and GE Shipping stuck to their guns, saying Great Eastern Gardens has been developed in a phased manner, in line with the development plan that was envisaged at the start of the project.

"This fact has been categorically disclosed in the relevant agreements with the flat purchasers that the project is being developed phase-wise and, further, that GE Shipping as owners have the right to construct the said buildings. Therefore, the proposed construction is in line with the development plans and is not a new addition to the project," GE Shipping and Mahindra Lifespaces said in their response to ET's email query. The civic authority has also granted the commencement certificate for the proposed construction, the response said, while adding that the claims made by the residents have no legal validity.

Residents of the complex, however, have a different take. According to Dadhich, the layout plans for construction on the entire property have not been disclosed in the declaration/supplemental declaration of AB and CD condominiums. Most of the residents of the GE complex were not informed about future development plans.

source:- http://economictimes.indiatimes.com/markets/real-estate/news/mahindra-lifespaces-ge-shipping-in-dispute-with-locals-over-land-ownership/articleshow/22962293.cms

Sea-facing Mumbai duplex goes at Rs 1.35L/sq ft

MUMBAI: Whatever the general market trend, Mumbai's realty market does not stop creating new records. In the costliest apartment deal in the country, a sea-facing duplex in a Malabar Hill building was recently sold for Rs 57 crore or roughly Rs 1.35 lakh a sq ft.

The duplex in the tony Darshan Apartments on Mount Pleasant Road was sold last month to the Bulchandanis, a prominent business family with interests in software, aluminium and real estate. They own three other duplexes in the same complex.

The family's latest acquisition (flat number 111) sits on the 9th, 10th and 11th floors of the complex's 'A' wing, has four bedrooms and is spread over 3,510 sq ft. It comes with attached terraces of 1,386 sq ft on the 11th and 12th floors and a covered garage of about 700 sq ft.

According to property documents, the apartment was previously owned by the sisters Mana and Shyama Sarabhai. It was bequeathed to them by their late father Gautam Sarabhai. Gautam, who died in 1995, was the brother of Vikram Sarabhai, the founder of India's space programme.

Legal sources close to the Bulchandani family confirmed the transaction. The Sarabhais could not be contacted for comment.

Located near the chief minister's residence, Darshan Apartments was the first residential complex in the city where duplexes were constructed. Sitting on an incline, it has 42 flats offering a view of the Arabian Sea. The complex was built on a 6,752.5-sq-m plot originally leased by Gautam to the Malabar Hill Cooperative Housing Society for 21 years. The society purchased the land from Gautam in 1971.

The recent Darshan Apartments deal overshadowed the record created by the glassware company Borosil this July when it paid Rs 21 crore (or roughly Rs 1.23 lakh per sq ft) for a sea-facing flat on the 10th floor of Samudra Mahal in Worli. It also eclipsed the Rs 1.2 lakh per sq ft paid by Jindal Drugs for a luxury apartment in Tahnee Heights on Nepean Sea Road in June 2012.

Property experts said the latest transaction was a one-off and did not reflect general market sentiments.

"Apartments in landmark south Mumbai buildings will continue to fetch premium rates because of their location and upkeep," said an expert. "There are not many buildings of such quality. So, they fetch higher premium than many new developments."

source:- http://economictimes.indiatimes.com/markets/real-estate/news/sea-facing-mumbai-duplex-goes-at-rs-1-35l/sq-ft/articleshow/22972721.cms

Basant Lok, Ansal Plaza: Once tony marketplaces, now falling on hard times

Once tony marketplaces where people loved to shop or watch movies, Basant Lok, Anupam complex and Ansal Plaza have fallen on hard times, edged out by malls. Ruhi Bhasin finds out what went wrong and what these markets are doing to survive

Before the advent of malls, Delhi’s brand and fashion-conscious flocked to Basant Lok or Anupam complex, Saket, to shop or just catch a movie at PVR Priya or PVR Anupam. Over the years, however, the footfalls in these once-tony marketplaces have drastically fallen, especially during summer, as people nowadays prefer spic-and-span, air-conditioned malls over markets with deteriorating infrastructure. ‘To-let’ signs are visible in both these markets, which look deserted during weekdays. But the market associations of both Basant Lok and Anupam complex, Saket, are optimistic, saying if the markets near the Ansal Plaza mall can survive, there is still hope for them. The Ansal Plaza mall might have been one of the first to open in Delhi but, much like these markets, has seen a steady decline over the years with office spaces taking over merchandise shops.

Basant lok

Once counted among the upmarket shopping addresses in the city, the 40-year-old Basant Lok community centre has seen a 50 per cent decline in footfalls in the last few years, the market association admits. The reasons attributed for this range from collapsing infrastructure to opening of three malls in nearby Vasant Kunj. Punjabi By Nature, a popular restaurant here, has shut down and has put up boards announcing its relocation to Ambience Mall, Vasant Kunj. Manchester United Cafe also shut down some time ago. ‘To-let’ signs can be seen all over the market.

“The high-street concept is still a viable business model. South Extension survived despite Ansal Plaza. The problem here is complete civic apathy. Right from sweeping of the marketplace to ensuring proper street-lighting, everything is taken care of by the market association. There has been talk of redevelopment of this community centre but nothing has happened so far. The footfalls have gone down by 50 per cent,” Kapil Das, owner of Citi Shoppe and a member of the market association,says.
He claims earlier people from Gurgaon used to throng the market but all that has changed with malls mushrooming in Gurgaon and surrounding areas.

Broken walking plazas and unkempt common areas have taken the sheen off this once high-end market, which was also popular among students of South Campus.

According to the market association, while shops have shut down, others, among them pubs, have taken their place. “While five-six shops have shut, retail outlets have opened here. Even pubs, because of which unwanted elements hang around the market, which is a problem,” Das says.

On the competition from surrounding malls, Das believes each option — mall and high-street — has its advantages and disadvantages. “In high-street, you get personalised service while shops in malls are staff operated. On the other hand, the air-conditioning in malls makes it a more appealing option during summers,” he adds.

The president of the market association believes while malls have affected business, high-streets will bounce back. “In a few years, high-streets will soon be back in business. We have seen this in other parts of the world also,” Harish Jagwani says.
The Delhi Development Authority (DDA) is responsible for the redevelopment of the centre. The agency claims a plan to redevelop the complex is still under consideration.
“It will require clearances from DDA’s screening committee before it reaches the implementation stage,” a DDA official says.
Anupam Complex, Saket
The Anupam complex, like Basant Lok, has taken a hit due to competition from malls that have opened in Saket. But it is slowly trying to re-invent itself to survive. “Our customer base shrinks in summer when people prefer the air-conditioned malls over high-street markets but in winter, business is back to normal. The market has transformed over the years. The niche shops have shut down and shifted to the malls, which attract that kind of crowd,” Bhagwan Das, owner of Lebanese Point and vice-president of the market association, says.
While many shops have closed, new ones have opened. “It has become more ofa restaurant and coffee shop market,”
Das says.
Little China, a restaurant which opened last week, used to be a shoe shop. “People from surrounding areas basically come to the market to eat. They like to grab a bite before a movie. We also get a lot of home delivery orders. A shoe shop used to operate from this space earlier but this isn’t the kind of market where people come to shop anymore so it shut down,” Jordan, manager of Little China, says.
Chutney D’lite, a small joint which has been functioning from this complex for the past 10 years, admits there has been a substantial fall in footfalls and business has taken a dip.

“There is talk of Anupam Cinema being revamped. Once that happens things might improve,” Das says.

Unlike in Basant Lok, traders say civic agencies are making efforts to keep the place neat and clean. “The lighting and general upkeep have improved. Pavements have been re-laid. While improvement on this front is slow, at least it’s happening,” a trader says.
But broken fountains and a general lack of cleanliness is still visible all around. Once frequented by rich customers, traders say now the address only draws middle-class crowd, especially from nearby areas.
Ansal Plaza

It was one of the first malls to open in Delhi. Its prime location in the heart of South Delhi made it an instant hit, especially with cultural events organised in its amphitheatre. But over the years, like Basant Lok and Anupam complex, people have given this mall a miss altogether. With several merchandise and retail stores shutting down, the mall now has offices functioning out of it. Shopkeepers claim they are struggling to make ends meet.

Gagandeep Singh, Chief Operating Officer (malls), Ansal API, says, “Ansal Plaza was launched in 1999 and enjoyed the status of being the most successful mall for almost a decade. Every product has a life-cycle.

With more malls opening in the vicinity, there is definitely a rationalisation of footfalls,” he says.
Office space seems to outrun the number of merchandise shops in the mall. The ground and first floors still have Shoppers Stop, McDonald’s, Meena Bazaar, Lacoste, Red Tape etc., besides two liquor shops. By evening, with most office-goers leaving, the mall wears an empty look. “The mall

source:- http://www.financialexpress.com/news/basant-lok-ansal-plaza-once-tony-marketplaces-now-falling-on-hard-times/1171700/3

RBI repo rate hike: Indian realty developers unhappy with Raghuram Rajan, say will impact housing

Expressing disappointment over RBI Governor Raghuram Rajan's decision to hike the key policy rate, real estate developers said this would lead to increase in finance cost and also affect housing demand during the festive season.

"There was no need to increase the repo rate at this juncture. It will hurt the growth sentiment further," DLF Chief Financial Officer (CFO) Ashok Tyagi told PTI.

Asked about impact on real estate, Tyagi said the overall sentiment would remain cautious, but he believed that good products from credible developers on good locations would always have a demand.

RBI today raised the short-term policy rate by 0.25 per cent to keep "worrisome" inflation under check, a move that may increase EMIs for home and auto loans in the medium term.

Commenting on the policy, Parsvnath Developers Pradeep Jain said: "It is highly disappointing to see such a signal from RBI. Though increasing Repo by 25 bps (0.25 per cent) may curb inflation marginally or may hold Rupee for a while, it is going to impact market sentiments significantly".

The RBI had a golden chance to bring positivity in an otherwise sluggish economy, but this increase in rates would affect growth prospects, he added.

"It is not a good signal for the industry which is about to enter the festive season. Banks have already started raising their rates," Jain said.

Housing demand generally goes up during the festival season and developers major part of sales take place during this period.
Global property consultant Jones Lang LaSalle India Chairman and Country Head Anuj Puri said the hike in repo rate would lead to increase in developers' finance cost and affect their profit margin.

"In the current monetary policy, RBI has increased the repo rate by 25 bps, which will increase the borrowing cost. However, with reduction of MSF by 75 bps (0.75 per cent) and reduction of minimum daily maintenance of CRR from 99 per cent to 95 per cent, it has relaxed tightening norms," Puri said.

Increase in finance cost along with rising cost of construction and the already challenging economic scenario is expected to affect profit margins of developers, he added.

industry has reason to be somewhat disappointed on the increase in borrowing cost, RBI has made provisions for increased liquidity in the system," he said.

Terming RBI's decision as "unexpected", Griha Pravesh Buildteck CMD Abhay Kumar said the move would disappoint the banking industry and consumers who are struggling under the burden of high Equated Monthly Installments (EMIs).

"It would also dampen sentiments ahead of the peak festival season, when developers expect the demand for houses to go up. This is going to hurt both buyers as well as the developers," Kumar said.

Reacting to the RBI policy, real estate developers' apex body CREDAI's Chairman Lalit Kumar Jain said: "It is equally important for the RBI to promote economic growth by encouraging real estate and infrastructure development even as the new Governor has inflation on his mind."

RBI's move to raise repo rate would negatively impact sentiments, ultimately affecting sales, he added.
Realtors' body NAREDCO President Navin Raheja said: "All industries including real estate are struggling and facing huge liquidity crunch, high input costs and slow sales. Hike in repo rates will again lead to increase in borrowing cost and will result into further increase in input cost."

Tata Housing MD & CEO Brotin Banerjee said that banks can be expected to increase interest rates which will impact consumer sentiment in the real estate industry.

"If not through the monetary policy, the industry needs to be provided immediate relief through other fiscal measures. The government needs to have policies to drive real estate growth as this is the second largest contributor to our GDP," Banerjee demanded.

Assotech MD Sanjeev Srivastva said: "Looking at current situation of our economy, we were not hoping any rate cut in repo rate, but increasing repo rate is a bit surprising."

Expressing similar views, Ramprastha Group CEO Nikhil Jain said that the company expected a significant change in policy that would encourage borrowers and investors to lend money. The hike in repo rate would escalate project cost.
KDP Infrastructures Executive Director Anuj Goel said that the move is aimed at reducing inflation. "We need to closely watch how fast this could bring down inflation and ensure industry growth."


Home loans would be costlier after this move, having a direct bearing on the aspiring buyers as lot many people will refrain from buying homes, said Pankaj Jain, Director of Noida-based realty firm K World Group.

sourcE:- http://www.financialexpress.com/news/rbi-repo-rate-hike-indian-realty-developers-unhappy-with-raghuram-rajan-say-will-impact-housing/1171835/3

Real estate: Back to freebies this festive season

The RBI Notification Restricting Loans Under 20:80 Scheme Has Developers Reworking Strategy To Woo Buyers Without Reducing Prices. Some Are Coming Up With New Variants While Others Are Banking On Gifts And Freebies

The Just-concluded Ganesh Festival Has Not Shown Much Movement In Mumbai’s Real Estate Market. This Is Usually A Period When Buying Activity Starts And Is A Harbinger For The Turn The Market Would Take During Dussehra And Diwali, The ‘festive Season’ For Realty Players. But Pushed Into A Corner Due To The Slowdown, Developers Are Working Out New Schemes And Offers And Also Handing Out Gifts And Freebies.

A Recent Report By Jones Lang Lasalle (Jll) India Shows That Mumbai City Alone Has Unsold Inventory That Would Take 48 Months To Clear At Current Absorption Levels, While For Delhi-ncr It Is 21 Months. For Pune It Stretches 14 Months.

Given The Staggering Numbers, Developers Have Also Been Hit Hard By A Surprise Move From The Reserve Bank Of India That In A Notification On September 3, Asked Banks To Restrict Lending Under The 20:80 Scheme For Under-construction Projects. This Has Led To All Calculations Going Topsy-turvy.

“under The Notification, The Central Bank Has Particularly Advised Banks Against Upfront Disbursal Of A Significant Portion Of The Loan Amount To The Developer Without Linking The Same To The Stages Of Construction. Rbi Has Tightened The Norms To Protect The Interests Of Buyers And Contain The Fallout Of Such Innovative Housing Financing Schemes. It Feels That Any Default By Builders Could Affect The Credit Profile Of The Borrower And Expose Banks To Higher Npas,” Said Research Note From Crisil.
The Scheme
As Per The Scheme, A Tripartite Agreement Was Signed Between The Bank, The Developer And The Home Buyer Who Would Book By Paying 20 Per Cent Of The Total Cost. The Bank Would Give Almost 80 Per Cent Of The Remaining Amount To The Developer On Behalf Of The Buyer. The Developer Agreed To Pay The Interest And Some Principal Amount For A Stated Period Of Say 2 Years And On Possession, The Entire Amount Would Be Paid Back To The Developer By The Buyer.
“The problem was that the developers were using the credit line of the home buyer and were getting the funds as home loan at much cheaper rate of 10 to 12 per cent interest instead of construction finance which is usually given at 16 to 18 per cent,” said M Ganeshan, a buyer who has booked a flat in a township on the outskirts of Mumbai.

This is similar to the 10/90 scheme, launched in 2009-10 by some developers and banned subsequently. This was an advance disbursement facility scheme wherein 100 per cent money was disbursed irrespective of the progress of the project. These had created many problems and a speculative trend back then.
Over the period, several developers diverted funds and delayed projects for which the loans were disbursed. Banks were in trouble recovering the dues as committed in the agreement. The buyers, on the other hand, were forced to repay after the particular period even without getting possession as per the complicated clauses of the agreement. When they resisted, legal issues cropped up. Projects were fast becoming non-performing assets.
“It was alleged that in the competitive environment, banks went overboard and disguised construction finance as mortgage loans to make their balance sheets look brighter. They looked the other way when the buyer was being grilled on the clauses of the agreement by the developer till the banks began to feel the brunt of it themselves. In some cases, they disbursed almost entire 80 per cent upfront so that they could start levying interest immediately,” said ND Mehta, a property consultant.

An industry source said that developers, who used this scheme then and now, are not small players who would have financing problems. These are big players with good holding capacities who exploited the banks and the buyers and made money and credited the consequences to both. This lot would be the most affected if the supply of cheaper funds suddenly stops.

Issues unresolved

There are some issues that are as yet unclear. One, the notification — as of now — applies to banks and not to housing finance companies. When contacted, a spokesperson


source:- http://www.financialexpress.com/news/real-estate-back-to-freebies-this-festive-season/1172139/2

The anatomy of a safe room inside your home?

As a concept, panic or safe rooms date back to ancient Egypt. Inside your house, a room like this can be used to protect you and your family from harm. While some think of them as money pits to placate the fears of rich and the paranoid, modern-day panic rooms are becoming increasingly popular among those desiring security in a dangerous world. If constructed properly, they are the unparalleled in providing safety. Hitesh Raj Bhagat tells you how: 

Ventilation and HVAC 

Ideally, the room should be air tight - no air gaps around the doors (construction specialists will know how to do this). This also means that staying for longer periods requires a system to keep the room warm/cool and to re-circulate fresh air. 

Supplies Keep enough canned food, bottled water and some clothes handy. Other essential supplies include items like fl ashlights, fi rst aid equipment and basic self defence equipment. 

Panic gear 

Here's where costs can skyrocket; oxygen masks, oxygen tanks, night vision goggles, fl ares and weapons can all be bought for a fair chunk of cash. 

Communication 

If you're locked in, you need a way to call for help. In a panic situation, you may not have time to grab your cellphone, so a dedicated landline phone is essential. 

Sanitation 

Small chemical toilets are ideal for this purpose. If the panic room is being made while a house is being constructed, a small toilet can be built in too.
Walls and construction 

Thick concrete walls are a must for a room like this - at least 8-inches thick, but they can also go up to 2 feet. Walls can also be lined with Kevlar and/or lead plates. 

Grades of panic room 

Is the room designed to only protect against intruders? What about storms, fl oods, terrorist attacks, nuclear blasts or chemical warfare? Depending on what the room is designed to do and for how long, a specialist needs to be Illustration: ARINDAM called to design and equip the room.

source:- http://economictimes.indiatimes.com/markets/real-estate/realty-trends/the-anatomy-of-a-safe-room-inside-your-home/articleshow/22561726.cms

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NSEL crisis deepens: Experts' view NSEL crisis deepens: Experts' view » MORE FROM VIDEOS Slide Shows Maruti Suzuki set to launch SUV XA AlphaMaruti Suzuki set to launch SUV XA Alpha Aiming to make its mark in the SUV segment, Maruti is all set to launch the XA Alpha, which wa... Samsung Galaxy Note 3 unveiled: 10 key featuresSamsung Galaxy Note 3 unveiled: 10 key features Amidst much anticipation, Samsung has unveiled the Galaxy Note 3, a slimmer and lighter versio... 7 awesome things you can learn online for free7 awesome things you can learn online for free A new language, coding, designing, art, cooking — things you would normally expect to pay for ... More Slideshows » Industry's fear on land bill exaggerated, overblown: Jairam Ramesh

NEW DELHI: With the passage of the land bill, cost of acquiring land will go up, Rural Development Minister Jairam Ramesh on Friday said but dismissed as "exaggerated and overblown" the industry's fear about the measure.

Ramesh, the architect of the path-breaking legislation, justified the stringent provisions in the bill saying any measure that empower farmers, livelihood losers, tribals and Dalits is in the interest of nation.

"Will the cost of acquisition go up? Yes. Will the time taken for the acquisition go up? Not necessarily. Will acquisition be more humane? Yes. Will acquisition prevents long-term agitation? Yes," he said and asked the industry to judge the bill in totality and not from sectional point of view.

He was reacting to certain queries a day after Lok Sabha cleared "The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Bill, 2012".

"Fears (of industry) are largely exaggerated and overblown. Any bill that protects the interest of farmers, livelihood losers, tribals and Dalits is in national interest. Any bill that closes the door on forcible acquisition (of land) is also in the interest of the nation," Ramesh said.

The bill, which will replace over a century-old act, is likely to be taken up in the Rajya Sabha on Tuesday for its consideration and passage.

"The 119-year-old Act was draconian, and led to immiserisation of farmers, and pauperisation of the livelihood losers. We need to recognise the historical injustices that resulted from 1894 Act," the minister, who often faced flak from the industry over the bill, said.

"Farmers will benefit, tribals will benefit, Dalits will benefit livelihood losers will benefit and India will benefit," Ramesh said when asked about the benefit of the law.

Elaborating how farmers will be beneficiaries of the legislation, he said, they will get four times compensation in rural areas. "A few people pay a higher cost... that will benefit a larger number of people. I don't think that anybody should grudge...frankly," he said.

source:- http://economictimes.indiatimes.com/markets/real-estate/policy/industrys-fear-on-land-bill-exaggerated-overblown-jairam-ramesh/articleshow/22167337.cms

Land Bill to hit project timelines, hike cost estimates: Crisil

NEW DELHI: Rating agency CrisilBSE 0.05 % on Friday said Land Acquisition Bill, which was passed by Lok Sabha yesterday, will lead to an increase in the gestation time of projects and overall costs.

The bill, which replaces the century-old Land Acquisition Act, 1894, proposes a unified legislation for acquisition of land and adequate rehabilitation mechanisms for all affected persons.

With the rehabilitation and resettlement clauses of the Land Bill, Crisil Research expects land prices to increase as the expectation of land owners will be higher.

"The land acquisition process will be longer and project gestation period will increase. Currently, the proportion of supply (which comprises projects of over 50 acres) to total planned supply in the top 10 Indian cities is 25 per cent," it said.

Consent of 80 per cent of landowners in case of land acquired by private companies and 70 per cent for land acquired under Public Private Partnership (PPP) model.

The Bill calls for consent of 80 per cent of the landowners in case the land is acquired by private companies and 70 per cent in case the land is acquired under the Private-Public Partnership (PPP) mode.

The process of obtaining consent shall be carried out along with the Social Impact Assessment (SIA) study.

The new rules will apply retrospectively to cases where no land acquisition award has been made and to those where land was acquired up to five years prior, but no compensation was paid or no possession took place.

source:- http://economictimes.indiatimes.com/markets/real-estate/policy/land-bill-to-hit-project-timelines-hike-cost-estimates-crisil/articleshow/22168437.cms

Will Friday the 13th be lucky for declaring Narendra Modi as BJP's PM candidate?

NEW DELHI: BJP is likely to endorse Gujarat Chief Minister Narendra Modi as its prime ministerial candidate on September 13 at a meeting of its parliamentary board in Delhi, a senior leader has told ET.

Mohan Bhagwat, head of the Rashtriya Swayamsevak Sangh, the BJP's ideological mentor, on Monday conveyed to senior leaders that differences within the party over the issue should not come in the way of Modi's anointment, said the leader, who did not wish to be named.

The Sangh has left it to the party to finalise the modalities of the announcement, which is expected before the 'pitrapaksh' - a fortnightlong period considered inauspicious according to the Hindu calendar - begins on September 19. The dates of state polls are expected to be notified by September 22.

Even as BJP leaders LK Advani and Sushma Swaraj have sought a delay in the announcement until assembly elections are wrapped up in crucial states later this year, the RSS has said that the majority view in the party should prevail. However, Modi's candidature was not discussed at the two-day meeting of the RSS functionaries and party leaders that ended on Monday.

"The meeting was held to discuss the economic and internal security challenges and no discussion took place on announcing Narendra Modi as the BJP's prime ministerial candidate," said RSS spokesman Manmohan Vaidya.

Modi's supporters say that his projection ahead of the assembly polls will give an advantage to the party while Advani and Swaraj have been arguing that the issue will polarise the electorate and overshadow the elections.

Meanwhile, Modi is set to address a series of rallies, beginning with Jaipur, where he will address a rally at the conclusion of Vasundhara Raje's yatra on Tuesday.

After this, he will speak at an ex-servicemen's gathering in Haryana's Rewari on September 15. The RSS and its affiliates discussed the BJP's electoral strategy ahead of the assembly polls and better coordination between the Sangh and the party.

The Sangh outfits plan to carry out programmes to reach out to all sections including the minorities, Scheduled Castes, Other Backward Classes, tribals, women and the young in a coordinated fashion, a person familiar with the matter said.

source:- http://economictimes.indiatimes.com/news/politics-and-nation/will-friday-the-13th-be-lucky-for-declaring-narendra-modi-as-bjps-pm-candidate/articleshow/22447740.cms?intenttarget=no