Results of Indian Parliamentary elections, is bound to have far reaching impact on the future of the country for the next 5 years and probably many more years. Managing 900 million voters is a daunting task, which the Indian Election Commission has mastered like nobody else in this world. What is required is stability and a strong purposeful leadership to take this country of 1.2 billion people forward. Our country was the major economy of the world 4 centuries back but lost its position due to colonial rule and missing industrial revolution. While it is poised to become the 3rd largest economy of the world in the next decade, per capita income must cross US$ 5000 for poverty to be eliminated.
During the last 3 years, Real Estate Sector has been facing the brunt of the Government’s policies - DeMo, RERA & GST. Though some aspects of the policies are positive, it did unsettle the Sector for couple of years. While business was appearing to return to normalcy, the GST Council has made major changes in GST rates, methodology & treatment for residential real estate. One fails to understand the logic of these changes which goes against the very essence & principle of GST. While, in its wisdom, the intent may have been to reduce the impact of GST for housing, the changes effective from April are counterproductive except for premium housing (square foot rate of Rs 10,000 & more. See page 56 for more information. Unwittingly, it is a wrong step towards reaching ‘Housing for all’. It will be a challenge to make customers understand the real negative impact of recent changes in GST for residential sector. Hope the GST Council realises this anomaly and takes corrective steps soon. So also, the anomaly on GST rate of 28% on Cement, which is a major ingredient for civil construction industry. 28% rate is meant only for ‘luxury’ & ‘sin’ goods. Big question - Is using Cement in construction a ‘sin’? Good to get an opinion pool.
The last few months saw a flurry of new initiatives at Brigade. Starting with signing an MoU with the Government of Tamil Nadu to set up World Trade Center (WTC) Chennai and an MoU with Government of Kerala to set up WTC at Thiruvananthapuram. Also, the launch of Art Café at Brigade Gateway and most importantly our foray into Co-working business segment with the launch of BuzzWorks!
The last two quarters also witnessed the completion of 10 projects - Brigade Lakefront (2nd Phase), Brigade Tech Gardens (1st Phase), Plumeria @ Brigade Meadows, Brigade Panorama, Arcade, Cedar & Deodar @ Brigade Orchards, Brigade Atmosphere (1st Phase), Brigade Symphony (2nd Phase), Mysore and our 1st hotel in Kerala, Four Points by Sheraton, Kochi InfoPark.
Our new project Brigade Cornerstone Utopia, a 6 million Sq.ft. mixed-use development in 47 acre will be very unique and is bound to become a major landmark in Whitefield zone. Response to the pre-launch was very encouraging. Few other major launches in the next few months will be Brigade El Dorado, in Aerospace Park near Bangalore Airport, Premium Residences @ WTC Chennai and 2nd Phase of Brigade Xanadu, Chennai.
With sincere hope for a good monsoon, a good and stable Government at the centre for a better India, I convey my best wishes to all our associates, customers & staff, and seek their continued support."
—Jaishankar CMD, Brigade.
There is no dearth of headline making news in the last few months—worsening US financial crisis; Nuclear agreement; Terrorist attacks; New BJP Govt. in Karnataka; High inflation; Volatility in crude price; natural calamities & impending Presidential Election in the United States.
It is amazing & unbelievable to see century old institutions which are revered in the financial circles—Bears Sterns; Lehman Brothers; AIG; Merrill Lynch; Washington Mutual, Wachovia—drop like 9 pins. Who knows whether the worst is over or yet to come? Greed to make more and more money with casino like operations & throwing caution to the wind has resulted in this financial catastrophe of humungous proportions, affecting each of us in some degree or the other. The magnitude of the problem is difficult to comprehend.
The uncertainty of life has increase with increased terrorist activities. This is extremely sad. Before it is too late, it is time for us as a nation, as corporates & as responsible family members to take all required security measures to avoid being victims of terrorist attacks. The whole meaning of safe neighbourhoods and safe cities has changed with the ease at which fundamentalists are able to operate. If the government desires to ensure the safety of its citizens and desires to maintain the secular nature of the country, then it needs to take tough measures without bothering about the political consequences of such decisions.
Full kudos to our 'Sing is king' Prime Minister for finally taking bold steps to conclude the much delayed Nuclear deal to enable us to produce Nuclear Power to meet our energy needs, without which our industrialization & economic growth will be severely affected.
High lending rates by financial institutions have curtailed the demand for residential units and other luxury items. This can lead to a negative chain reaction by reduced demand for services and core sector products like steel, cement etc. This is also likely to bring down the country's GDP growth from a very healthy 8%+ to a modest 5-6% growth. For the economy to bounce back, it will take quite sometime. Even then, it would be wise for genuine buyers to take their decision to buy properties (but on floating interest rates, if one desires to borrow). Otherwise, year on year inflation of 8-12% p.a. will only jack up the prices of real estate in the medium to long term.
A silver lining for non-residential buyers, in an otherwise gloomy scenario is that the rupee has depreciated by 20%+ making it attractive to buy properties and to make investments in India. Better to strike gold when the opportunity exists.
With single party rule (BJP) in Karnataka, expectations for improved infrastructures & governance were running high. But ground realities seem to be different. Action on many long pending people is yet to be taken. Citizens are still hopeful of positive steps by the government.
Impending Presidential election in the United States in November '08, and parliamentary elections in India (March '09), will be interesting to discuss and watch. They will certainly keep the media busy.
Let me hope the festival season of Dussera & Diwali will bring some sparkle to our lives.