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.
Completion of 30 years in business is a significant milestone. One would have seen many highs & lows and weathered many a storm. It was no different for Brigade. What started as a single project venture has grown into what it is today. While I look back at the achievements, accolades, awards and landmarks created during the last 30 years, with a sense of pride & satisfaction, I realise that it is more important to look forward on what needs to be done, to continue to survive, grow & flourish to meet the aspirations of all stakeholders, for the next 30 years. It is a happy coincidence and a fitting tribute that during the 30th year of our operations, we completed 30 projects (across residential, office, retail & hospitality segments) adding up to 10 million sq.ft. in area.
Today, we are living in an interconnected, globalised world with very high customer awareness about what’s happening around us & in other parts of the world, resulting in increased expectation in the quality of products and services desired. While, we are working hard to meet the exacting expectations of customers and other stakeholders, at Brigade, we are also conscious of the fact that we need to give back to the society, that has supported us. Towards this end, Brigade has taken up three key initiatives - to plant 30,000 trees across our various projects, to build 30 toilets in schools which need them and to start a Skill Development Centre focussed in the areas of construction, hospitality and retail.
Disruptions Galore - the last few weeks the world and India has witnessed multiple disruptions and is going to witness even more, which will have a huge impact in the way companies do business. While the world was coming to terms with BREXIT, the unexpected election of Mr. Donald Trump as President of the world’s most powerful economy, United States, has come as a shock due to his unpredictable policies. If Mr. Trump sticks to his pre-election promise on Immigration, Make in America & Anti-outsourcing policies, many developing countries, including India will be affected, adversely.
As if this wasn’t enough, on 8th November 2016, our Prime Minister, Shri Narendra Modi announced the most disruptive policy - demonetisation of INR 500 & 1,000 currency. While the intention is noble (to eliminate fake currency, to curb black money in elections & business, to fight corruption and to move towards a cashless way of doing transactions), the immediate result is one of disruption in day-to-day activities. While I wholeheartedly support this bold initiative and pray for its success, the worrying factor is that, the business sentiment has turned negative. Hopefully, it is a temporary phenomenon and the positives of the policy initiative should outweigh the negatives. Only time will tell.
Two other forward looking Acts of the Central Government will have huge disruptive implications - RERA (Real Estate Regulatory Act) & GST (Goods & Services Tax). Both are likely to become a reality by April-May 2017. RERA should help streamline the real estate business and has many provisions to protect the interest of the customers.
Unfortunately, many draconian provisions are proposed against the developer which may lead to increased harassment & higher corruption. While the intention behind introduction of RERA is laudable, the implementation of the Act will be a cause for worry. It is likely to increase the overall cost for the developer & customer alike, due to compliance costs and added finance cost required, because of additional time for project approvals by RERA authority. Due to onerous provisions of RERA, hopefully the so called ‘fly by night’ developers will disappear from the scene and that should help organised developers to pursue business in a more professional environment.
Similarly, the GST Law should help streamline the tax administration in the country and it should help bring down the overall impact of duties & taxes on many products, thereby making Indian businesses more competitive. It should also help bring, larger number of business establishments under the tax net.
All the three initiatives of the Central Government - Demonetisation, RERA & GST are highly commendable, but will have a huge disruptive effect on the way companies have been doing business so far. Their impact on the country’s economy is expected to be very positive. The detractors must realise that there is ‘no gain without pain’.
As we enter the new year - 2017, one must realise that in this globalised world, one needs to be ready, to adapt to the constantly changing environment. Change seems to be the new certainty. Towards this end, Brigade has initiated the ‘Real Estate Accelerator Programme’ (Brigade REAP) to encourage, mentor & support ‘Start Ups’ in our area of operation.
Wishing all our readers & stakeholders Season’s Greetings and the very best during the New Year!