Indian economy: will the stimuli work?

The global financial market meltdown and its effect on the Indian economy has forced the Reserve Bank of India and the government to initiate some more measures for uplifting the sagging economy. Let us examine the details of the ‘stimuli” and its possible effect on the housing sector.

The main accent of the RBI’s stimuli is on interest rates. The government’s package is a mixed bag — additional budgetary expenditure of Rs. 20,000 crore, tax/duty cuts and increased lending by public sector banks.

The major policy announcements by the Reserve Bank made on December 6 are:

Reduction in repo rate to 6.5 per cent and reverse repo to 5 per cent

Housing loans up to Rs. 20 lakh to be treated as ‘priority sector’ lending

Refinance of Rs. 4,000 crore ( details to be announced after the meeting of RBI Board, slated for the current week), for the National Housing Bank for financing construction/purchase of dwelling houses under the priority sector to individuals/families

Five per cent ceiling on housing sector priority quota within the overall priority sector lending; such loans sanctioned up to March 31, 2010

Concessional treatment to commercial real estate lending and consumer loans extended up to 30-6-2009.
Interest reduction war?

Even before we read the news item in the morning papers, the television channels beamed the decision of ICICI Bank to reduce interest on home loans to 11.5 per cent from 13 per cent, a hefty reduction of 1.5, on housing loans up to Rs. 20 lakh. While the general public may be carried away by this high speed action, since the ongoing interest rate movements are a by-product of the ‘stimuli’ to the sagging fortunes of the Indian economy as a result of the global meltdown, other steps are necessary as a follow-up measure.

The government came out with a package of economic revival ‘stimuli’ on December 7, which has certain direct and indirect measures to support the real estate sector, such as

Housing loans up to Rs. 5 lakh to be treated on special footing.

Loans above Rs. 5 lakh and up to Rs. 20 lakh to be treated as priority at concessional rate.

CENVAT relief of four per cent for all dutiable items.

Special approach to residential housing segment.

Why the reduction in rate only to loans up to Rs. 20 lakh?

The specific plan behind the RBI’s declaration of housing loans up to Rs. 20 lakh as ‘priority’ sector is not very clear. However, this only prompted the ICICI to pass on the repo rate reduction to lower and middle class investors who are shying away from investing due to high prices.

Interest on home loans during the last two years.

The home loan rates climbed from around nine per cent to about 14 per cent during the last couple of years. This, along with the increasing cost of construction materials, service charges, cost of stamp duty and registration charges, enhanced the cost of investment in the housing sector by 20-25 per cent. Coupled with the general rise in land cost, this increase has discouraged investors, especially the lower and middle class. Promoters and builders who had big plans for expansion have deferred their plans to invest in new ventures. As a result, the housing market has been dull and demand has came down by almost 25 to 30 per cent, according to top builders.
Cheap money policy

The urgency shown by the RBI and the open direction from the former Finance Minister last month will certainly encourage banks to pass on the reduction in their cost of funds to the borrowers in general and to the small investors in real estate. However, not extending the reduced rate to all the existing borrowers may have negative effect. Most of these loanees may opt to change over to other banks. Another possible effect can be the borrowers utilising the opportunity to limit their borrowing to the upper limit of Rs. 20 lakh in order to get the benefit of lower interest. Yet, the idea needs to be welcomed.

Major effects on the sector can be:

Fillip to long term lending, say 25-30 years.

Preference to floating rates.

Relocation from congested cities to less crowded towns.

Movement from central districts to outskirts.

Green structures to counter climate changes.

Development of townships in and around metro rail terminals.
Cautious approach

Another point to be debated is whether all banks will be in a position to reduce interest on lending unless their cost and asset liability match. Despite positives, it is better to wait and watch for a while. In case the recession is to continue for a while, say 2-3 years, the money value can come down substantially. Optimism pays, but caution can be the watchword. If interest rates go down continuously, the benefits should be fully availed by the borrowers, as the up-cycle will come, may be a tad late in the day! The good news, however, is the positive responses from many banks such as BOB, BOI and Oriental to reduce the rates.

Compensation for mental agony too

In a recent case, the A.P. State Consumer Redressal Commission increased the compensation amount to offset at least a reasonable portion of loss incurred by a customer.

M. Srinivasa Raju, a resident of Saroornagar, purchased a plot from Sreemitra Real Estates Pvt. Ltd. in August 2002. He made the initial payment of Rs.49,625, but however, stopped the further payments as the developer refused to allocate him the plot. His repeated requests were ignored.

Mr. Raju filed a case against the developer in Ranga Reddy District Consumer Forum seeking repayment of his money together with Rs.50,000 towards interest, Rs. 1 lakh as compensation and Rs.50,000 for mental agony.

The District Forum ordered the builder to refund the paid money Rs.49,625 along with interest of 9 per cent per annum from July 2004 till the date of realization and compensation of Rs.2,000 and Rs.500 for court costs.
Better compensation

Upset with the amount of recompense, Mr. Srinivasa Raju challenged the verdict in the State Commission. He argued that if he was refunded the money when he had asked, he could have purchased another plot in city and would have earned a good market value for it.

He further said he would get only a meagre compensation with the interest rate granted by District Forum and pleaded for better compensation.

The State Commission found force in the contention of the customer.

It observed that if customer was refunded his money in 2003 itself, he could have bought another plot and benefited from the increased land rates.

The State Commission modified the order of the District Forum keeping and asked the builder to repay Rs.49,625 with interest rate of 15 per cent per annum from August 2004 to the date of realisation.

It increased the compensation and legal expenditure amounts from Rs.2,000 and Rs.500 to Rs.25,000 and Rs.1,000 respectively.
Cases cited

The Commission cited three cases - Lucknow Development Authority v. M.K. Gupta, Haryana Development Authority v. Suman Bansal, and Haryana Development Authority vs. S. P.Gupta, which were tried by the Supreme Court.

In the verdicts of these cases, the apex court stated that consumer fora should specify the amount under each head while awarding the compensation and due compensation should be awarded for mental agony and harassment. The time given for compliance was one month.

Too many tongs in the fire

Now that the government’s integrated townships on a Public Private Partnership mode’s draft policy has come into the public domain, initial excitement seems to be giving way to trepidation. Stakeholders concerned like real estate developers, technocrats and experienced officials have been raising quite a few pertinent points on the issue.

Few are ready to buy the argument that the current slump is the right time to get “budget projects” grounded, the basic premise on which the new policy envisages. As much as 40 per cent of the purported township’s plotted area is to be earmarked for economically weaker sections, low income and middle income groups.

People in the business wonder if it’s practical to go for such housing when 10 per cent of the township is reserved for open spaces and another 10 per cent of residential area is to be handed over free to the sanctioning authority for its own usage? “Can any entrepreneur be successful by taking such a project? Is the government washing off its responsibility to provide housing for poor,” asks an official, incredulously.
Business lobby pressure

He points out that an earlier plan to earmark 20 per cent land in each layout for such a purpose in Hyderabad Metropolitan Development Area (HMDA) came tumbling down to five per cent following incessant pressure from the builders-politicians lobby. “And, even there are no proper modalities on how the reserved space is to be utilised, the cost factor, selling price and probable beneficiaries,” he says.

A previous attempt to sell such houses did not serve the purpose as even the “low price” was way above the affordable range of the target group.

Putting onus on private parties to develop townships is fraught with risks as the contentious land acquisition could lead to more legal wrangles as incentives are simply not enough, argue few others.

“The market value rates upon which cash compensation is to be paid will not be acceptable since it denotes to official values which is too low,” points out a developer. There was also a danger of such townships becoming inaccessible from rest of the urban area.
Gujarat example

Instead, the government should follow the Gujarat example where the urban development authority takes over all the land delineated for a township, builds basic infrastructure like internal and arterial roads, earmarks public spaces, etc. Most importantly, it allows a plot owner to retain his ownership allowing him or her to sell when the time is ripe.

Also, asking developers to build and also maintain civic amenities in such townships is expecting too much, say critics. “When governmental agencies have failed to provide for proper civic infrastructure anywhere, is it possible for private players to do the job? What is the guarantee the developer will do it, if at all or qualitatively, after the plot or apartment is purchased? There are many cases of such failed promises,” says an official.

While giving a push to real estate is imperative, government should seriously consider giving it an industry status as there will be easy finances and tax benefits along with some much needed regulation to protect the consumers’ interests, feel some.
No Master Plan

Without a proper Master Plan in place, it is foolish to go ahead with such projects as it would do against the very tenets of the policy of organised growth, is an overwhelming opinion among stakeholders. Hyderabad itself had a Master Plan in 1975 and a new one is yet to see light of the day even as it has been a stupendous growth.

The prices…..in the wake of terrorism

Most of us consider the interest rate as the key factor affecting real estate prices. While a combination of factors can affect the demand and consequently prices, terrorism can be the most lethal market buster.

Commenting on the terrorist attack on Hotel Taj, Trident-Oberoi and Nariman House, the Singapore Prime Minister expressed the view that investment in India can be adversely affected by the developments. The then Finance Minister, P.Chidambaram, admitted that the Mumbai siege may mar the mood of the investors and could have negative impact on investor sentiments at least in the short run, but the Indian economy has the strength to overcome it fast. The rating agency, Standard and Poor, however, does not expect any negative impact on India’s macro economy. The terror strikes, they say, are isolated incidents. Percy Mistry, economist and head of an expert committee on making Mumbai an international financial centre, which recently submitted a road map for the same, is reported to have stated that the terrorist attack can erode investor confidence. What is the factual position relating to property prices?
Risk perception

Investment in real estate mainly depends on the risk perception. Risks are from many angles. First and foremost is the safety of one’s investments and the return for it. Next, the class of investor/s who contribute a good percentage of the investments in property. In the case of Indian real estate, individuals form only 10-15 per cent of the transactions, especially from the volume point of view. Surveys have shown that the institutional investors form around 40-45 per cent of the value of deals done in the last 3-5 years. Banks, finance companies and software firms own office premises in major cities as they plan for medium to long-term benefits. If this is true, risk perception will be high in the short term. Yet, the global financial meltdown does not give many alternatives for funds and trusts to get reasonable returns for their investments in liquid assets and they have to turn to the property market. Some may even use the slump to buy property in risky metros.

If terror attacks are dampeners, the 9/11 World Trade Centre attack in New York did not affect property prices in New York city. Even in the Philippines, the killings of tourists did not stop further property development. Nearer home, the 2001 terror attack on Parliament in Delhi did not have any adverse effect of property prices in the metropolis. The risk perception is a wholesome feeling and again comparative in nature. In fact, terrorism is now a global phenomenon and there is no place which can be considered insulated against it. This means among the risk Factors such as fire, flood, earthquake, and now terror all have pivotal role in risk perception.

In this background, Indian property prices cannot be considered high as compared to the ‘street specific’ top few cases as reported recently. For example, the most expensive sq.ft. prices at Rs 8.45 lakh on Avenue Princes Street in Monaco, Rs. 5.40 lakh in Seven Road, Hong Kong, Rs 3.60 lakh in Fifth Avenue, New York, etc are not comparable to any area in Mumbai or Delhi or Kolkata . At best, the price of Rs. 52,000 reportedly paid by a foreign bank in Mumbai last year for securing an office space could well be the highest in India. In such a situation, a reported slump of 10-15 per cent seen in Mumbai market overnight cannot be considered alarming.

Much needs to be done to protect properties from terror risk. Some important steps can be:

Insurance against risk of terror attacks.

Business Districts must spread its wings to interior locations.

International property exchanges covering property stocks, so that risk can be neutralised by investing in stocks of different countries.

Cities including Hyderabad, Bangalore and Chennai have lower property price rates as compared to Mumbai or Delhi. In such a situation, it is likely that investors may turn to these cities for taking the advantage of lower prices. This may perhaps help the sagging market too to look up. Let us wait and watch.

Consumer can no longer be taken for a ride

In a recent verdict, the A.P. State Consumer Disputes Redressal Commission (APSCDRC) censured Narne Estates Pvt. Ltd. for its unethical business practices.

The State commission commented that the company was harassing and causing loss to the consumer and its efforts to repudiate the agreement were unethical.

T. Vijaya Kumari, a resident of Indian Airlines Employees Colony, purchased a plot from the company in its East City extension in January 1998. She paid Rs.40,000 by the end of 2000 as per the initial agreement. She was asked to further pay an amount of Rs.43,750 towards development charges.

Accordingly she paid the charges by February, 2003. The company refused to register the plot on her name and it offered an alternative plot, which was not acceptable to the buyer.

Hence, the buyer asked for repayment of her amount. However, she could get only Rs.81,250 out of Rs.83,750.

She was told that Rs.2,500 was deducted towards outstanding dues, which never existed.

The company neither paid interest on the money for keeping it for three years nor compensation for going back on its promise.

The annoyed buyer filed a case at Hyderabad District Forum-III seeking for Rs.3,75,000, the then market rate of the plot, with 24 per cent interest rate per annum, Rs.2,500, which was deducted illegally and Rs.50,000 towards compensation besides court costs of Rs.10,000. The company didn’t oppose the case at the Forum.
Deficiency in service

All in all, the District Forum stated that not registering the plot after taking the entire sale consideration, amounts to deficiency in service.

However, the forum awarded only a compensation of Rs.50,000 besides costs of Rs.2,000. The company contended the verdict in the State Commission. It said that the compensation of Rs.50,000 was on the higher side and it argued that it was not liable to pay either interest or compensation since it proposed to register an alternative plot.

The commission pointed out, that the reasons put forth by the company for not registering the plot were inconsistent. It further stated that compensation of Rs.50,000 cannot be termed high, as the company locked up the consumer’s money for three years by which she has lost her plot at a time when land prices in the city escalated.

However, Ms. Vijaya Kumari was not granted the market rate as she couldn’t submit any proof to support her argument.

Home loans: rise in slippages worry banks

Banks have begun stress testing their realty assets as delinquencies in loan service payments begin mounting.

Bankers said that many banks were facing overdues on some of the past realty loans and some home loans. The slippages noticed were mostly through an increase in overdue debt service payments for up to one month. In the past, overdue payments were very low.

Bankers said that in at least 10 per cent of the home loan accounts, they had experienced such slippages.

Two years ago, when rates were low, the slippage was minimal. Only about 2 per cent of the home loan accounts experienced such slippages, the bankers said.

Such slips in debt service payments notwithstanding, banks see little need to classify the accounts as sub-standard assets.

Vijaya Bank’s Chairman and Managing Director, Mr Albert Tauro admitted “There is an increase in debt service payment slippages. But this is not an immediate cause of worry.” This was because despite the overdue payments, they were yet to reach the threshold level of 90 days. Assets are classified as non-performing only if the debt service payments were overdue for more than 90 days. Besides, for most banks, realty and home loans comprised less than five per cent of their gross assets.
Unfinished projects

Bankers said some realty projects had been left unfinished for want of buyers, increasing the risk of loan delinquencies.

As a result, most of them were limiting loans to the realty sector to contain risks and assessing potential risks through stress testing of the assets.

Stress testing implied assessing the potential for asset delinquency. Asset delinquencies were on the rise in several public sector banks.
Rising NPAs

Bankers are resorting to moral persuasion, persuading borrowers to settle their overdue payments.

However, despite such efforts, NPA accounts have been on the rise. In the second quarter of the current financial year, the average NPAs of the banking sector is already close to 1.5 per cent of advances.

For the last financial year, the average was about 1.3 per cent of advances.

Banks’ worries are not just confined to rising NPAs in the realty sector. In many cases, the loan-to-value (LTV) ratio has dropped below the prudential level of 1.5. Under current guidelines, banks are expected to maintain physical asset coverage of at least 1.5 times (150 per cent) the loan value.

Normally as loans are amortised, LTV ratios tend to rise. A falling LTV, however, implied depreciation in the value of assets.
Distress sales

Mr Lakshmi Narayanan, president and Chief Executive Officer, The Real Estate Bank of India, said “Distress sales have increased. Some developers are resorting to discounted sales for meeting liquidity requirements.”
Balance sheet losses

Realty prices consequently are sliding. LTV ratios are currently down to 1.22 with the drop in the value of realty prices in most metros.

Bankers said that if realty values dropped further, LTV ratios were also likely to drop further. This meant that in the event of loan foreclosures, banks would have loan losses on their respective balance sheets.

Carpets as tiles

While commercial spaces, especially corporate houses, use wall-to-wall carpeting for interiors, carpets do have maintenance issues and can cause allergy if not properly maintained. With certain areas wearing out more than others based on foot fall, the need to replace large chunks of the carpet arises, which is not eco-friendly.

To negate these factors, the concept of carpet tiles has emerged where pieces of the carpet are used, enabling specific pieces to be changed in the event of sections getting worn out.

InterfaceFlOR is into manufacturing carpet tiles and the company has achieved a green tag for its process of manufacture. These carpet tiles incorporate features such as no VOC content and contain a proprietary anti-microbial preservative, Intersept, which protects the floor from mildew, bacteria, mold and other odour-causing micro- organisms. Glue-free TacTiles are used to install the carpet tiles, which reduces the environmental footprint by 90 per cent.
Air quality

These features improve the ambient air quality, thus contributing to reduction of the sick building syndrome, says Raj Menon, CEO, InterfaceFLOR. “The added advantage is the minimal 3-4 per cent wastage of material at the time of installation which is against conventional broad looms which amount to 13-14 per cent,” he adds.

Nothing commercial about it

Given the consciousness and increasing need to opt for greener solutions to promote sustainability, corporate houses appear serious about carrying out operations from buildings that sport a green tag. Unlike earlier times when few sustainable options were incorporated, commercial buildings now evince the need to go not only totally green but be rated green.

Buildings that have incorporated green aspects of construction and ensured thermal comfort and indoor air quality have been found to increase employee productivity and reduce attrition rates.
LEED-rated IT park

While none of the presently occupied commercial buildings have a LEED rating, Xylem, the first LEED (Gold) rated IT park in the city, developed by the Tata Group, became ready for occupation recently.

With an area exceeding 240,000 sq.ft., Xylem incorporates all the essentials in terms of design, materials, orientation, energy savings and indoor air quality.

The objective is to tackle the ‘sick building syndrome’ and focus on occupants’ health, ergonomic design and architecture to increase employee productivity.

Boasting of a 19 per cent saving in operational cost as compared to a conventional building, the IT park packs in features such as efficient water use, right orientation to let in maximum natural light, efficient and intelligent air conditioning that results in energy savings of up to 26 per cent as well as energy saving lighting options.

To ensure indoor air quality, the building has 22 CFM of fresh air as compared to 15 CFM in a conventional building. The use of double-glazing glass and aluminium aerofoil louvers further reduces indoor temperature, reducing the need for air-conditioning.

The building has lounges at each level with a terrace garden to serve as relaxation centres. A fully-equipped club house complements this.

Says Brotin Banerjee, COO, Tata Housing, “While this IT Park is the first of its kind in Bangalore, we propose to make all our future projects green compliant.” While there is a marginal increase in the cost of construction, the operational and health benefits negate this extra cost.

Following closely on this path is Bearys Global Research Triangle, currently under development by the Bearys Group. Being the first green building research park in the IT sector, the development aims to incorporate all aspects of a green building to attain a LEED Platinum rating on completion.

Aesthetically designed, the building is in the midst of the lush green belt in Whitefield and built with no changes to the contours of the landscape. The building is to be surrounded by trees to add to the green factor. While all the open terrace spaces are to sport a terrace garden to minimise heat besides enhancing the green look, even the commonly used aluminium louvers have been replaced by creepers.

“The building occupies only 28 per cent of the site area with the rest covered by trees. Even in this 28 per cent, all open areas are to be greenery”, says Syed Beary, Chairman, Bearys Group.

The building is uniquely designed with a portion of it slanting to provide shade to the relevant section. Similarly, the fire escape incorporates a fresh air vault to successfully push the fire out of the section.

While the orientation of the building is structured to let in maximum natural light while cutting out heat, double-glazed glass and Aerocon blocks act as an extra level of insulation.

To ensure indoor air quality, separate ducts are provided for fresh air which minimises stale air traditionally circulated in an air- conditioned interior. Green-compliant carpet tiles will improve indoor air quality.

About 50 per cent savings in energy is expected to be realised with CFL and LED lights. In conference halls, sensors are to regulate air-conditioning as well as lighting.

Similar to energy saving, water conservation features will be in place, not only in terms of waste water recycling and rainwater harvesting, but by using methods like dual flushing and sensor taps.

While the facilities of a club house are to be available for the occupants, the building also proposes to incorporate a Montessori and child care centre to take care of the needs of working mothers with young children.

To promote green modes of transport, special bicycle parking zones and facilities for charging battery-operated cars are to be provided besides making available a fleet of buses for long distance commuters.
Remove the myth

Says Chandrashekar Hariharan, CEO of BCIL-GIL, “the concept that green buildings are more expensive than conventional buildings is a myth.” According to him, a green building veers around the basic approach to design and the right design will reduce the cost of construction, making the cost difference minimal.

BCIL is a green building consulting firm assisting corporate houses with green options. Its wing, GIL, is into research and innovation to promote new ways of adopting green technology.

The company has developed and is in the process of developing various end-user products that are not only energy saving but economically viable.

These products extend to home appliances and address commercial needs such as innovative ways to increase the level of fresh air in an air-conditioned interior.

Adds Hariharan, “There has been tremendous response from builders to incorporate green features not only in commercial spaces but residences too.

This response is seen across the board to imbibe the green concept even in other sectors like food processing and manufacturing.”

Going forward, he envisages increased awareness and steep growth in the percentage adopting the green concept.

These midgets can be mysterious and mindboggling

The mention of the word ‘tree’ immediately conjures up an image with enormity as its key character-- trunks of vast circumference and wide-spread canopy stemming from innumerable branches and sub-branches. If one can think different; think of midget trunks and insignificant canopy with scaled-down heights, growing from trays and having only so many branches as the owner wishes, one has known and seen the bonsai beauties.

The Japanese word ‘bonsai’ means ‘potted plant’ and does not in literal sense convey what it denotes—a miniature tree. Though said to be originating from China, Bonsai technique reached its acme only in Japan, where it was transformed into an art, and spread across the world. Not many noticed the presence of bonsai in the world’s first Horticultural Show of Paris in 1848, yet the show in 1912 at London drew hordes that immediately attributed mysticism to the art of bonsai. Post World War II, the veil of mystery removed, it became a craze even in the Western world.
Artistic touch

“While horticulture is a healthy diversion from mundane activities, bonsai adds a touch of art to it. A bonsai tree is the result of a series of physical manipulations, not genetic modifications. Hence, sowing of a bonsai’s seed does not yield a Bonsai tree,” says D. L. N. Prasad, eminent plastic surgeon who first brought the art to the city.

Showing around his much-loved and cared for garden of miniatures, he explained how he and his wife first started off in 1967 with minimal knowledge, how they used the curd-bowls to plant the saplings, and later tried out earthen trays and failed, and how finally got the miniature Ficus bengalensis that survived till now, with prop roots et al.

“Now, I can tell you the shortcuts, but initially it was a story of repeated failures. Patience and perseverance are the two investments needed for bonsai cultivation. First thing you should know is that there is a pre-bonsai stage in which sapling from the nursery is prepared,” Dr. Prasad says.

Seedlings from nursery, if planted directly in a typical bonsai tray, will not last long. Instead, they should first go straight into earth or a pot as the case may be, and grown like normal plants.

Even before obtaining the plant, one should have a vision about what one would like to do with it, about its growth orientation and the number and size of branches one would like to retain. It is more or less similar to the creation of an artwork, in that, both are driven by an idea.
Selection process

Though there are no rigid rules in selection of saplings for bonsai, a few practical considerations could go a long way in ensuring trees as family legacy.

“Any species that branches freely may be chosen for bonsai. They should be soft-stemmed and be able to take pruning of roots and branches. All Ficus varieties apart from trees such as tamarind, badam, baobab and guava may be trained as bonsais,” says M. M. Hussain from Plants Land Nursery. Another point to be borne in mind is the life of the plant. It takes about five years for a plant to be made into a bonsai. Those with marginal lifespan will not be suitable for the art, as they die sooner.

As miniatures, bonsais should always represent nature in its myriad forms, but not beyond that. A few basic growth orientations adopted straight from nature will help one to visualise what one would like to design. For single-trunk bonsais, it might be formal upright, informally upright with scattered branches, slanting, curved/twisted trunk, semi-cascading with down-ward bend, cascading with total fall, wind blown, or literati with foliage in the top.

Those with multiple trunks may be double-trunked, triple-trunked, a series of trunks, growth akin to a raft, or rambling ones. Seasoned growers may also plan a landscape of bonsais in a single tray. Once the orientation and the number and placement of branches to go with it are clear, one should visit a nursery and choose a plant that shows promise of the desired growth.

Pot should be of the same size as the plant and the tap-root of the sapling may be cut and a rock placed underneath to encourage growth of secondary roots.

After planting and nurturing it in a pot, one should allow vigorous growth of the desired branches, albeit after slicing off all the superfluous ones.

Any unwanted growth disturbing the desired branching should be immediately curbed. One should not mind the growth of the required branches till the thickness intended for the stem is arrived at. Pruning of the branches to suit the proportions comes only at a later stage.
Do’s and don’ts

The focus of a bonsai artist should largely rest over trunk and canopy which are known as primary features and over the branches—main, secondary, tertiary and lateral—and roots that are the secondary features. One aspect typical of bonsai is the discouragement of thick foliage at the middle stem.

“Care should be taken to make the main branches visible. They should be trained in such a way to have gaps among them. No two branches on either side or vertically should begin from the same point of the trunk and they should not be at right angles. Branches may also be trained in the desired direction by tying them with wires,” says Dr. Prasad, his hands automatically pruning away the excess foliage.

Once the stem becomes thick—which might take upto five years—the plant is ready for transplantation into a tray. Selection of a tray should follow the tree’s height and branching. If it is rectangular, planting should take place to a side, for attaining that ravishing look. While displaying, the tree should always be at the eye level.
A creative touch

Much depends on innovation that amply manifested itself in Dr. Prasad’s garden as knots wherever he cut away the branches. By scooping away a bit of wood from the cuts, he made them look like natural hollows.

He also resorted to air-layering as a method to curb the tree’s height, and pruning of the selected leaves to keep the size of the rest small. Leaf-size reduction and also root exposure come at a much later stage and a beginner need not worry about them.

“There are three limitations for bonsai, namely light, water and time. Bonsai is not meant for indoors and needs as much sunlight as a grown up tree. Hence, it must be kept outside and carried in only occasionally,” says Dr. Prasad.

“Watering is a must three to four times a day depending on the season, as the roots are shallow.

Time, in my opinion, is not difficult to shell out for a passionate heart,” he adds as an afterthought.

Bonsai buffs may call him at 040-23392424.

YSR offers land for ISRO centre

HYDERABAD: Chief Minister Y.S. Rajasekhara Reddy has urged the Indian Space Research Organisation to establish its astronaut training centre under the Human Spaceflight Programme (HSP) at Anantapur and offered land, even as the space body announced plans to set up a facility for advanced atmospheric studies near Tirupati.

Replying to Dr. Reddy’s congratulatory message following the launch of Chandrayaan-I, ISRO Chairman Madhavan Nair said the National Atmospheric Research Laboratory (NARL) was functioning at Gadanki, near Tirupati, since 1992.

BJP seeks details of land alloted to SEZs

HYDERABAD: Bharatiya Janata Party president Bandaru Dattatreya on Sunday demanded that the government publish a white paper on the land allotted for various companies and individuals in Special Economic Zones as also the details of the firms which were set up in them.

In an open letter to Chief Minister Y.S. Rajasekhara Reddy, the BJP leader also urged the government to stop acquisition of the land at Chillmathuru and other places where public purpose was not served.

Accusing the State government of acting inhumanly against farmers, Mr. Dattatreya said that lands were being taken away from them in violation of their fundamental rights.

A prelude to painting

Surface preparation prior to that long-needed coating is as important as choosing the right colour(s), type of paint and brand to go with your tastes and settings. In fact, many seasoned painters and interior designers emphasise on proper preparation before going in for actual coating.

A good paint on a surface well-prepared always gives one the satisfaction of the final product. In fact, experienced painters say paints on well-prepared surfaces always last longer.

Better the surface cleaning and preparation, better will be the life and gloss of the paint and lesser the cost will be ultimately, says T. Narayan Rao of Monarch Paints in Jambagh. In fact, all major paint companies stress on proper surface preparation to avoid disappointment once the final coat is done.

The first thing one should do before the painting work begins, obviously, is to take away all the curtains and fixtures from their places. All the furnishings in the room should be placed in middle of the room and covered fully so as not to let the dust settle on them or the paint ruin some expensive showpiece.
Prelims

Carpets, rugs or any such loose covering on the floor should be removed and placed in safer areas. Use covers or dustsheets for the purpose. Oily and greasy marks can be removed by using a sand paper. It also takes care of dust particles or rust in case of metals.

Insects or termites (wooden surfaces) should also be taken care of. Applying two to three coats of Kiricide 15 days prior to the day of painting should help. The substance penetrates the surface. Make sure it is dried up by the time it is painted.

Once the walls are clear of their adornments, wash their surfaces with soap or detergent to get rid of dust and debris. That done, the about to be painted surfaces should be carefully inspected for any kind of holes, cracks or loose plaster.

The look of a room can be greatly diminish if painted on a damp surface, says Vijay Kapoor of Tirupathi Paints in Jambagh. Besides, damp surfaces are not really conducive for wall painting. One of the golden rules when painting a room is to ensure all the surfaces to be painted are dry and clear of dust. A damp surface also can lessen the life of paint, says Mr. Rao.
‘Fix its’

Hence the maxim, a stitch in time saves nine always holds true in case of damp surface areas. In case any damp spots are spotted, they should be dealt with immediately. There are several ‘fix-its’ like Algi coat RE104 or Dr. Fix damp guard available in the market to stop/block small leakages. These ‘fix-its’ should be applied only after the first primer coat.

In case the seepage is more or there is excessive leakage, professional help should be sought. According to Mr. Rao, a new primer ‘Zysocil Primer’ is now available in the market. This primer can be applied directly on the wall’s surface before the application of first primer coat. Cracks and holes are another aspect that should be dealt with care. If not tended to in time, the risk of the cracks widening or the wall surfaces peeling after a point of time is greater.

Loose and flaky plaster can be detected by tapping the wall or ceiling surfaces. Portions where cracks have developed or are doubtful should be very carefully examined, says Yusuf, a professional painter. Once the cracks or holes are identified, correction measures can be taken.

Specific crack healing solutions are available at paint shops. While some just cover up small cracks, there are others like ‘wall care putty’ that act both as putty as well as to hide or rectify cracks.
Repairing cracks

While covering up the holes or cracks, it is advisable to fill it up more than the levelled surface, Mr. Kapoor says.

It is always possible for us to smoothen and level it to the wall’s surface by rubbing it with fine sandpaper, he adds. Seek professional help in case the cracks are larger.
Primer coat

Once these problems are dealt with the wall should be dried before the first coat of primer could be splashed over it.

In case one is planning to go in for a new coat of paint that is lighter than the existing colour, a primer should be applied so that it neutralises the older paint. Last but not the least one must ensure that the area to be painted is well ventilated during and immediately after the painting.

Do you get your promised quality?

You zero in on a development which meets your requirement, fits your budget. You then proceed to raise a loan, garner all your savings and pay for the apartment. It is a proud, satisfying moment when you walk into the Sub Registrar’s office to make the apartment legally yours.

But move into your finished apartment and you realise to your dismay that your residence is anything but satisfying. For, the quality of construction is a far cry from what you had bargained for. You find that cracks and leaks are now part of your life. You learn to contend with bad tiling in bathrooms, leaking sewage pipes, badly aligned doors and windows, and discoloured flooring, amongst an endless list of complaints.

You try to hold the developer accountable only to be told that his liability ends after one year of handing over the apartment complex. When attention is drawn to the promised quality, fingers are pointed towards subcontractors.
Penalty clause

The penalty clause for the subcontractor is again to the tune of one year after completion which means that he is not accountable beyond the one year period. This means the customer pays for the apartment at the current exorbitant price only to be delivered questionable quality with no place to appeal or find recourse.

If developers insist that top priority is given to ensure quality construction, why then are developments increasingly coming up with substandard quality. This is true with not just small builders who are yet to make an impact but with established and highly reputed developers.

Gopal V, Senior Vice-President Projects and Planning, Prestige Group says, “materials like cement, steel, and finishing materials like granite, tiles, sanitaryware are supplied by us to ensure quality. We have developed a series of checklists with a quality control audit system, besides backward integration. Site engineers are assigned to monitor workmanship.”
Reasonable controls

Perhaps the developer has in place reasonable quality controls. A surprising factor is that a few developers have managed to deliver quality to the extent of leaving customers with very little to complain about. Says Guru Prasad, Joint Managing Director, Chaitanya Projects, “While the main structure is subcontracted, finishing part of the construction is done by our own labour contractors. While detailed monitoring is done to ensure quality compliance, our approach is extremely focused on the project in execution. The volume of our projects is kept at manageable proportions to enable higher levels of supervision. But the clinching factor is the level of commitment that successfully eliminates questionable quality.”

Syed Beary, Managing Director, Bearys Group says, “quality can be delivered only when approached with a conscience and commitment. It is also dependent on how you manage to extract quality work from the subcontractor. In a boom time, the volume handled is extensive and given the time constraint, enough focus is not paid to quality and this leads to substandard workmanship. Shortage of skilled labour adds to this. Being proactive limits this occurrence” Perhaps boom time and high volumes add to low quality of constructionPerhaps the scenario may change making quality mandatory with customers gaining the upper hand to dictate it.

You can be floored by this concrete

Concrete has come a long way from the warehouse floors of yesterday. Now, people are finally warming up to the beauty and versatility of concrete and decorative concrete can be found among others, even at places such as upscale restaurants and charming bed and breakfasts, says Colourcrete Systems which has an impressive line-up of products using decorative concrete technology.

The applications have become wide and varied from kitchen and bathroom countertops, sinks, tub surrounds, tabletops for dining, coffee tables and end tables, interior floors, driveways, patios and outdoor living areas.

Decorative concrete has become the new material of choice for designers and homeowners. One of the most common places the decorative concrete is seen these days is under the feet. Even the elaborately detailed pieces of these can be more cost-effective than marble, slate, granite and others. Decorative concrete flooring is resistant to the wear and tear or decay and unlike other floor coverings, it does not warp or buckle, Colourcrete says. Receptive to colouring methods, it offers the flexibility to cut, pattern and impress, making it possible to produce near exact replicas of even the most expensive building material from granite to marble.

The other features assured by Colourcrete include high capacity to absorb, store and slowly release heat and coolness, easy maintenance, water resistance among others. For those keen on putting specific designs, logos and custom graphics can be recreated on concrete floors.

The products of Colourcrete include Stampcrete which duplicates textures with realism, Overlay-crete that comes as cover-up for existing concrete surfaces, Stain-crete that creates mottled colour tones in the existing concrete, apart from Texture-crete, Stonecrete and Walkcrete.

There really are no restrictions that usually come with other material, for one can unleash one's imagination and get the desired surface with decorative concrete. "Any colour and any pattern and any design can be worked out," says Vasant Sunerkar of Wide Spread (Ph.9866326686), local dealer for Colourcrete.

Asset reconstruction, home loan

Reconstruction is nothing but converting the loan portfolio into a sort of securitised debt which will be sold to other institutions at a ‘discount’

Many of us would have noticed a statement from the Chairman of H.D.F.C (Housing Finance and Development Corporation Limited) a few days back that there is great scope for development of asset reconstruction in real estate sector. Let us examine this concept and find out the effect of asset reconstruction on the home loan.

While on the subject, we can either start from the lenders end or the borrowers end. If we start from the lender, as all of us know, the lender is always looking for,

* Increasing business

* Higher income from lending

* Quality of assets

* Zero bad debts

* Be the leader in the business segment

When a lender talks about reconstructing his asset, in this case the loans to real estate sector, either he is not happy with the quality of his asset or he wants to get more solid income. The quality of asset can suffer due to many reasons, such as,

* Repayment delays

* Delay in completion of projects

* Cost escalation

* Borrowers at the cross roads
The property sector

No one complained till a couple of months ago when the stock market was ‘up-ish’ on the portfolio. Even the turmoil in the U.S. property market did not worry anyone as Indian market was high on demand, new projects were many and the economy has been buoyant.

The slow down: Where did the slow down start? Is it because of less demand? Is it because of tight money conditions? Dear money policy of the Reserve Bank of India? Growing inflation? …Or a combination of all these factors? Much can be said about all the above.

Effect of slow down on loan segment: When cash generation is affected adversely, repayment suffers and the ongoing projects suffer. New projects will virtually be nil. Cost increase will be the other issue affecting the sector. Cost of land, construction materials, cost of rising labour and service charges are basic problems. Allied problems are widespread industrialisation and conversion of farm lands for housing purposes. The proliferating Special Economic Zones, in spite of strife and struggles from the land owners here and there make land rare for further construction of houses and office complexes.

What do bankers do when their loans are stuck? Banks will have to provide for the low quality assets; Income by way of interest will stop; New lending will be few to come by; Recovery proceedings will have to start.

One way of recovery will be to ‘sell’ the loans before it is classified as non-performing. Loan securitisation is the concept which is now called ‘asset reconstruction.’

The reconstruction process: Reconstruction is nothing but converting the loan portfolio into a sort of securitised debt which will be sold to other institutions and investors at a ‘discount’. Some lenders set up subsidiary ‘holding companies.’ What the HDFC and other major real estate lenders may be looking at is to ‘sell’ the loans to Asset Management Companies (AMCs). Some primary lenders may set up their own AMC to which the home loan portfolio can be transferred. Such reconstructed asset can be treated as a ‘securitised debt’ by extending a Corporate guarantee and sold to other banks or private investors, with attendant risks.

The borrower vis a vis asset reconstruction and securitisation: If the process yields extra income to the lender, the retail borrower has to be given at least a portion of it by way of interest reduction. This is an opportunity for the retail borrower to benefit from reduction in cost.

The bank should in fact obtain the borrower’s consent for securitization. So, here is the benefit for the retail home borrower who should bargain for interest concession.

Sky is the limit here

The buzz continues. The site swarms with architects, engineers and thousands of skilled workforce. The ground is excavated, pillars rise and records are set with slabs too. Lanco Hills at Manikonda which promise to metamorphose the city skyline with tallest of the structures is doing a slab every fourth day!

Spread over 30 million sft which include residential, SEZ, retail and hospitality, the Lanco Hills which is promoted by developers as one of the world’s largest single-phase development and represents a world of luxury, convenience and comfort, is getting ready to make available the IT space for utilisation by June next year. “The residential space will be available after that followed by the commercial and then hospitality,” informs S. Pochender, Lanco Hills CEO.

It is a single phase development and the entire work is on.

Nearly 8,000 skilled personnel were already at the task and similar numbers are to join in next few months. “There were some problems but we overcame them and are on path of progress now,” he says.
Villas

On the progress of work, he says a slab every fourth day is what is being done. This is one step further when compared to some of the best developments across the globe that did it in six days or so.

The developers have now decided to add villas to the project. “Villas have a strong demand these days and we will cater the intrinsic demand. The villas are at a drawing board stage and will be finalised in next two months,” Mr. Pochender says.

The residential towers are to be completed in the range of 27 to 34 floors including duplex and three and four BHK types worked out from 1,900 sft to 4,500 sft.

The Signature Tower that promises to stand well above everything else is pending with the Union Ministry of Civil Aviation. “The entire project will be over in three years time”. While 70 per cent commitment has been made for the residential, three major partners have committed for the IT spaces.

The effects of the economy slowdown are clear, but Mr. Pochender is confident that it will stage a strong come back. “There is a slowdown in enquiries. However, the phase is a passing phenomenon and we are sure it will bounce back,” he says.

Frills and flounces seam your garden

Secateurs are to plants what barber’s scissors are to the hair. Just like a haircut shapes and styles the hair apart from clipping the overgrowth, pruning can be done not only for the healthy growth of the tree, but also to chisel the foliage into desired shapes. Hedges are mostly sheared to bring about the look of the border, while not resorting to any experiment. However, the same trees when planted individually with definite intervals across the lawn or collectively to form a levelled pattern, can be pruned to represent different shapes, thus resulting in Topiaries. They not only present a visual treat, but also improve the overall appearance by breaking monotony. For this very reason, they can be tried out in colony parks and children’s play areas.

“Soft stemmed plants with thick growth of shrubbery should be preferred as topiaries. Those with woody stems can not tolerate regular or heavy pruning,” says M. M. Hussain of Plants Land Nursery.

The soft-stemmed ones include varieties such as Ficus, Duranta, Golden melaleuca, and Clerodendron inerme. These, apart from being soft in stems, tolerate regular pruning and throw out new branches easily—a quality desired for shaping and maintaining the topiaries. They should also be evergreen to sustain leaves throughout the year.
Hedgers

Hedge plants such as Murraya exotica, Thuja, and Casuarina equisitifolia can also be used for making topiaries. Big trees such as Putranjiva roxburghii, Polyalthia pendula, Polyalthia longifolia, and Acalypha while used as hedges, are not conducive to being trained as topiaries. Most popular ones are Ficus benjamina, Ficus reginald, Ficus prestige, Ficus nuda, Ficus panda, Ficus bushy king, Duranta speciosa variegata, Duranta plumeri, Duranta golden shower, and Duranta speciosa golden.

Training a topiary is much akin to grooming a bonsai in that similar techniques such as bending, shaping, and distancing the branches from each other are employed in both cases.

Topiaries can be small, medium-sized or large in size. They can be pruned to represent as many shapes as one’s imagination permits. The most common shapes are balls, cubes, obelisks and cones with multiple tiers in them.

At times, they can also be trained in spiralling shapes. Tiered topiaries can be made by allowing foliage to spread at different levels in single stem.

To begin with, a plant with abundant branching should be chosen and be allowed to grow thick foliage on all four sides. Then a desired shape should be carved by pruning out unwanted portions using secateurs.

However, the desired result can not be achieved with a single pruning. Regular shaping is required to get the topiary with the perfect finish. Mechanical saws are widely used instead of secateurs to shape the topiary.

Topiaries can also be worked into hedges by shaping them in a running length and forming pillars or balls in intervals. Most popular are the ones representing animal life and attracting children’s attention. Usually, such topiaries are wrought by using thin metal frames to clip away all protruding branches. The most preferred plant for animal shapes is Clerodendron inerme (Bombay Border), as these can take any amount of pruning.
‘Turning table’

For achieving perfect similarity among a group of topiaries, one may use the ‘turning table’ technique, whereby the plant may be placed on a turning table and rotated across a frame to cut off the protruding branches. Same process can be repeated for all the plants to create harmony.

Nowadays, a trend whereby a clump of soft-stemmed plants are grafted and trained to represent various mesh-like three-dimensional patterns is catching up. These are mostly imported from nations of Far East and the West.

Bankers watch while buyers wait

That the real estate boom has to take a back seat thanks to the topsy-turvy state of economy is quite evident in the market. However, with interest rates on home loans being relaxed by most of the banks owing to ‘Repo’ rate cut, number of loans taken since the announcement has almost remained stagnant.

With borrowers heaving a sigh of relief owing to the 0.75 per cent reduction in the benchmark Primary Lending Rate (PLR) that most of the banks have adhered to, bankers are seeing it as a good move on the part of the government.

“It’s definitely a good strategic move because a slash in interest rates is always welcome by those investing in apartments who mostly comprise the middle class. This should bring in some stability to the demand as well,” says Noel D’Silva, relationship manager of the Vikrampuri branch of the .State Bank of Hyderabad (SBH).
Ray of hope

However, given the current scenario in real estate, most of those who have invested in property in the past few weeks through home loans have withdrawn from the purchase.

But builders are positive that this trend may soon change. “We have seen quiet a number of young professionals who have taken back the booking amount after the markets turned volatile. At present, there are very less buyers in twin cities due to the prevailing market situation. But due to the revised interest rates, the number of investors may grow in the coming days,” says an optimistic official from a construction company.

As per the new revised home loans, the floating interest rates of State Bank of India for loans taken up to Rs. 30 lakh with a repayment period of up to five years is 9.75 per cent.

For a repayment period of five to 15 years on the same amount it is 10 per cent and that of 15 to 25 years, it is 10.25 per cent.

Under the fixed rates, for loans taken up to Rs. 30 lakh, the rate of interest is 12 per cent and loans taken above Rs. 30 lakh will have to be repaid with an interest of 13 per cent.
BoI rates

Moreover, the Bank of India too released a list of revised interest rates on home loans where in a loan of up to Rs.30 lakh that is being paid within five years, the rate of interest is 8.75 per cent.

The same loan with a repayment period of five to 10 years is 9 per cent, while for between 10 and 15 years, the rate of interest is 9.25 per cent.

Even though prices of apartments in the past few weeks have gone down, buyers have been holding back their decision to go ahead with the purchase.

“Prospective buyers are waiting for prices of construction materials to drop further and are keeping a tab on market trends,” opines Mr. D’Silva.

“The movement of markets during the past few months have made them indecisive about investing in property. We will have to wait and watch for sometime to see how people have taken to the slashed interest rates,” he further adds.

Kokapet is the new realty hub of Hyderabad

Kokapet is now being touted as the city’s most attractive real estate location. It is situated in the epicentre of prestigious IT corridor and is also strategically located between Gachibowli and the Greater Hyderabad zone. The realty sector in the city is still vibrant despite the shake-up of economy and many national players are zeroing in on Kokapet. Also, real estate has become the best investment option with the stock market acting erratically and the global economy going for a spin. Dozens of residential and commercial projects are under various stages of construction in Kokapet.

It is virtually raining SEZs in the area and big names such as Google, PCS, Cognizant, Tech Mahindra, Cbay, Qualcomm, Sonata, DQ and others have already pitched camp. In the vicinity is Gachibowli and Madhapur where over 200 major corporates are together employing more than 5,00,000 persons. All these factors have spurred construction in Kokapet, which can provide living space to many of these people. The Outer Ring Road is 1.5 km from Kokapet and the metro is around 10 km away. The Shamshabad International Airport is also close enough at 17 km and the Secunderabad Railway station is only 30 km away.

There are many good schools and colleges in the region and the Hyderabad University is 8 km away. For entertainment, one can go to Treasure Island (3 km), Ocean Park (2 km ) and the Golconda Resort. Malls and hospitals are also close by. “Kokapet has already been giving rich dividends to investors who came in early,” said Mr Somayajulu, a property analyst. “Investments of Rs 1 lakh have yielded 1,000 per cent returns in a year. But the boom is just about to start.” Land, which was valued at Rs 10,000 per square yard in Kokapet two years ago is now selling at Rs 22,000.

Prominent residential projects coming up near Kokapet include Lanco Hills, Aparna Sarovar, Aparna Cyber Commune, Ramky Towers, NCC Urban, Meenakshi Trident Towers, Jain Carlton Creek, Manjeera Diamond Towers, SMR Symphony and Emmaar Boulders Hills. Mantri Developers and Ramky are developing commercial projects, and Ashoka Builders and Meenakshi Infrastructure are developing IT Parks. IT SEZs are being planned by Matyas Properties as also Lanco and Emmaar while Dynamic Constructions, Salarpuria Properties and Jayabheri Properties are developing IT Parks. “Kokapet has emerged as one of the focal points of the area,” said Mr Srinivas, facility manager of Qualcomm India Pvt. Ltd, a leading CDMA technology company. “The demand for residential property will grow further since the staff strength of companies is expected to increase further within five years.”.........

GHIAL's plans hit air-pocket

HYDERABAD: The expansion plans of GMR Hyderabad International Airport (GHIAL) have hit an air-pocket. The global economic slow-down and
credit crunch have forced the company to defer the over Rs 150-crore capital expenditure on the new airport and slow down development of real-estate development and special economic zones. An austerity drive is on to trim operating costs.

The current crisis could pull-down revenues as passenger traffic is expected to drop by a million. “We expect passenger traffic to touch 7.3 million this fiscal compared to the original forecast of 8.4 million,” said P S Nair, chief executive officer, GHIAL. This, in turn, would delay the break-even from 6 to 6.5 years.

Domestic and international passenger traffic dropped by a near 10% drop from April to October this year compared to the same period last year. The story was much the same for domestic cargo. But the silver-lining was the 46% growth in international cargo traffic, thanks to higher exports and project imports.

GHIAL has targeted an initial passenger capacity of 12 million. The drop in passenger traffic is a cause for worry, though it mirrors the global trend. Loss making airline companies in India have been provided some relief, with the government cutting jet fuel prices and exempting customs duty on jet fuel.

Nair reckons that airport operators such as GHIAL also have a legitimate right and case to seek government help to tide over the crisis. The operator already has a state-support agreement on a slew of fiscal incentives including refund of value added tax. However, it is too early to take a call on reviewing the concession agreement, he said.

To shore up revenues, GHIAL plans to seek a hike in the user development charges for domestic passengers from Rs 375 per passenger to Rs 600 per passenger. “Our initial business projections and break-even period were based a UDF charge of Rs 600 per passenger. We will approach the Airport Economic Regulatory Authority (AERA) with our case, once it is set up,” said Vishwanath Attaluri, chief commercial officer, GHIAL.

The company also plans to step up marketing efforts for cargo and international airlines and routes and increase the spread on duty free, retail and food and beverages for passengers to fight slow down.

“Our target is to increase the share of non-aero revenues from 40% to 60% in due course, in sync with international trends,” said Peter W Noyce, chief operating officer, GHIAL. GHIAL is a joint venture between the GMR Group, Malaysia Airports Holdings Berhad, the state government and the centre. The GMR group has a majority 63% stake, while MAHB holds 11%. The state government and Airports Authority of India (AAI) hold a 13% stake each in the project.

Official Gmail Blog: Say hello to Gmail voice and video chat

Official Gmail Blog: Say hello to Gmail voice and video chat

A milestone in infrastructure development

HYDERABAD: When the 11km stretch of the Outer Ring Road (ORR) between Gachibowli and Shamshabad is thrown open for public use on Friday, the State capital will be crossing a milestone in development of the civic infrastructure.

Though the eight lane expressway of phase-I of the 158 km long ORR is expected to be completed by August next, the government has now decided to open the four-lane stretch to improve connectivity between the IT Hub Gachibowli and the Rajiv Gandhi International Airport in Shamshabad (RGIA). The four-lane road will traverse through Narsingi, Andhra Pradesh Police Academy and Himayatsagar.

The 158-kilometre long ORR is estimated to cost a staggering Rs. 6,787 crore and is expected to be completed by December 2011. The ORR project is split into three phases, with the first phase covering the stretch between Gachibowli and Shamshabad (24.38 km); Phase-IIA between Narsingi to Patancheru and Pedda Amberpet to Shamshabad (62.30 km) and the Phase – II B between Patancheru to Pedda Amberpet via Medchal, Shamirpet and Ghatkesar (71.30 km).
Phase I

Presently part of the phase-I, the four lanes on the left side of the central median is being thrown open for bi-directional traffic reaching or originating from the RGIA only. The 11 km eight-lane stretch under package one is to cost Rs. 315 crore, (including land acquisition) while the second package of 13.38 km is to cost Rs. 384 crore. While a Russian company, Corporation Transstroy, OJSC has taken up works for this stretch, the second package is being executed by Continental Engineering Corporation of Taiwan.

The works of ORR phase-I commenced in July 2006 and there was a considerable delay, firstly in handing over the right of way to contractors as the stretches meander through the lands of Chilkur forest and the APPA. Then controversies over land acquisition followed by litigations over the alignment and removal of religious structures and rock excavations took much time.

The progress of the work was again affected due to deep excavation of upto 25 meters at several places. Authorities had to excavate nearly 28 lakh cubic meters of hard rock to form the road. Authorities had to go for controlled blasting of rocks near inhabited areas and this was another major stumbling block.

Investment in infrastructure preferred

HYDERABAD: Frequent changes of leadership (CEOs) cannot turnaround companies that are making losses, instead the companies should strengthen the baseline of their balance sheets by cutting down on unproductive expenditure, according to venture capitalists (VCs).

Against the background of valuations of companies dwindling in the wake of economic recession, the VC and private equity (PE) funds have become wary of investments.

Mergers and acquisitions (M&A) appear to be one solid option for the VCs and PEs to exit from any setting.

VC Circle Investment Forum organised a series of panel discussions here on Thursday on ‘investing in a perfect storm’.
First investor

While the VCs and PEs desire to invest in infrastructure companies building airports, ports, roads, etc, they wanted the government to be the first investor to propel the activity.

Sudhir Sethi, CMD of IDG Ventures felt that the investors wanted to wait and watch, as the sizes and number of deals would plummet.

Realty blues hit foreign hotel majors' India plans

International hotel chains like Hilton, Accor, Carlson and Starwood are concerned about the viability of their India plans. Many of these
hotel chains have tied up with real estate developers like DLF, Emaar MGF, Unitech and Parsvanath to set up five-star hotels. However, fund-starved developers, who are trying to raise money for their core activities like residential and commercial property projects, are understood to have put the hotel ventures on the back burner. A drop in occupancy and room rates, inflow of business travellers and tourists to India have also raised concerns on the viability of these projects, industry sources say.

“Out of a total of 1.14 lakh proposed room supply, only 58% or about 66,000 rooms, will actually be developed over the next few years. So, we feel many announced projects may not take off as planned,” said Manav Thadani, MD, HVS International, a hospitality consulting firm.

“Now, debt raising is a difficult process,” says Homi Aibara of Aibara Consultants. Lemon Tree Hotels CMD Petu Keswani said: “Only developer-led hotel projects will face a problem as their priorities are different.” However, when contacted by ET, real estate developers insisted that projects were on track.

According to the latest HVS report, cities like Bangalore, Chennai, Delhi-NCR, Hyderabad, Mumbai and Pune, where massive new room capacities are planned with real estate operators, are seeing trouble. In Bangalore not more than 60% of the new capacity is likely to come up. The same goes with Chennai, Delhi, Hyderabad, Mumbai and Pune.

However, cities like Agra, Hyderabad, Jaipur and Mumbai saw a negative growth in room supply in 2007-08 as compared to 2006-07.

The last few months have seen a demand-supply mismatch in tier II cities like Bangalore, Pune, Hyderabad and Chennai. Room rates too have fallen steeply in these markets, making it unviable for real estate developers to go ahead with the planned hotel projects. This is happening at a time when there is a severe shortage of branded hotel rooms.

Unitech MD Sanjay Chandra said: “We have management tie-up with the Marriott Group for three projects, and one of them will be commissioned in January. Other two projects are very much on.” Recent media reports had suggested that DLF’s hotel JV with Hilton had hit a rough patch. However, DLF clarified to the stock exchanges that “DLF’s JV with Hilton is on a firm footing and all plans for the development of hotels stand as originally envisaged”. However, industry sources said DLF has put the hotel project on the back burner for at least a year.

An Emaar-MGF spokesperson said there were no change in the hotel plans of the real estate firm and its tie-up with Accor. Says Uttam Dave, president and CEO, Interglobe Hotels and head of development, Accor Hotels India (Accor has tied up with Emaar MGF to launch Formule 1, a budget hotel): “Most of our projects are on track, and so far at least none of our projects have been either cancelled or put on hold, and this includes both managed and investment projects. There have been some delays in the actual development and commissioning of projects, and this has been on account of obtaining development approvals from municipal authorities and not due to real estate values.”

DLF New Residential Apartments Lake District Gachibowli, Hyderabad 9603649027

DLF now brings a residential project “The Lake District” - Gachibowli Extension in Kokapet Hyderabad. It spread over 75Acres and offering 3 and 4 bedroom apartments in Gachibowli Extension (Kokapet), Hyderabad.

The Lake District a vertical of DLF Ltd, India’s largest real estate company is proud to announce the proposed launch of its residential projects in Hyderabad. With a lineage of 6 decades of excellence and over 20,000 proud residential owners who today enjoy the privilege of owning a “The Lake District” it’s our endeavor to bring the same quality and values to intending house owners of Hyderabad.


Common Amenities:
• Gated community with solar-powered security system.
• Sewage Treatment Plant.
• Reticulated Gas.
• Underground drainage and cabling system.
• Security & Reception block.
• 100% power backup
• Water Treatment Plant.
• Solar powered street lighting.
• Lush, manicured Landscaping.
• Home automation and security system.
• Car parking.
• Car wash facility within the complex.

Location:
• 75 Acres Integrated Township.
• Scenic view of Osman Sagar Lake.
• Green Zone on one side.
• Financial district on the back drop.


This project is at a very scenic location overlooking the Osman Sagar (Gandipet Lake) on the one side and IT Hub on the other.

Affinity Consultant is a Real Estate Agent in India operating since last 10 years. A.K. Jain heads a team of dedicated professionals with more than 10 yrs of experience in real estate services handling the entire project in India.

To know more about us kindly visit www.affinityconsultant.com you can also get in touch with us by at info@affinityconsultant.com and we will be at your service instantly.

Contact:
Mr. Dependra – 9603649027
Mr. A.K. Jain - 9811159064
Affinity Solutions Pvt. Ltd.
8 - 3 - 231 / B / 13,
Opposite Tea Club, Sri Krishna Nagar,
Yusufgunda, Hyderabad - 500045
Website: www.affinityconsultant.com
Email: - affinitycredit@yahoo.co.in

Promoting a pruned look

Removal of dead cells forms part of the natural cycle of every living organism, be it a mammal, reptile or a tree. For human beings, it manifests in removal of dead skin and cuticles, while for reptiles, the process is more significant in the shedding of skin. However, not many are aware that trees too should be perceived as undergoing such phenomenon when they shed their leaves. Old has to give way for the new and it is not any different with plant life. However, with plants, we can get our way, by pruning away the old and unwanted parts much before it is done the natural way.

Most often pruning is associated either with hedges, border plants or topiaries, or with fruiting varieties such as grapes, and apples. Among the ornamental plants, only roses are construed to have the requirement. Contrary to the common perception, almost all the plants and trees need pruning to lead a disease-free life with vigorous growth of foliage.

“Every plant needs to be pruned to promote new vegetative growth and inflorescence leading to higher yield of fruits. Old foliage becomes less conducive to transpiration due to various reasons such as dust accumulation, insect attack and other such problems. Pruning leads to better absorption and photosynthesis,” says M. M. Hussain (Ph: 9848024654) from Plants Land Nursery.
Food consumption

Another benefit of pruning is the optimisation of food consumption. Decimation of branches results in lesser food requirements and hence the excess nutrients will be diverted to the growth of new branches, in a way forcing the tree to throw out fresh shoots. This is particularly true when the trees are transplanted from one location to the other. Pruning of foliage before uprooting the tree will sustain it after the transplantation when due to shock the tree will not be able to absorb nutrients from the new soil.

Planned pruning will also result in better crop, a fact noticed in case of trees such as guava, pomegranate, and ber. The plants are starved for a period of one to one-and-a-half months before the planned crop, till they shed all their foliage. Then the plant is provided with fresh compost, watering and pest management, which will lead to vigorous growth of new foliage, flowering and thus, fruits.

When it comes to ornamental plants, most often, the ones to get pruned would be roses.

“Roses are pruned twice a year, at the beginning of the monsoon and the winter respectively. Heavy pruning should be done at least once, which means that except for the prominent stems, the plants should lose all other branches and leaves. Then the plant should be fed with manure, fertiliser and pest control,” says Mr. Hussain.

Pruning is in no way the privilege of roses. Though vigorous growth of flower shrubs fills the gardener with pride, it should not keep him away from regular pruning. The bigger the plant becomes, the greater the requirement of nutrition. With older branches refusing to flower as much as the new ones, the uncut bushes will end up with more of foliage and less of flowers. Also, the ones without the touch of secateurs will soon grow out of shape.
Within time

It is advisable to prune the foliage and also the roots of potted ornamental plants such as Dieffenbachia, and Philodendrons at the time of annual or biennial re-potting. Roots of a few Asparagus varieties, if not pruned, will occupy the whole pot, leaving no space for soil and nutrients.

In case of climbers such as Adenocalymna, Bougainvillea and Bignonia, pruning should be carried out before the plant is allowed to flower, while in case of winter bloomers, it is advised to prune the tips much before the season begins. Trees and thick branches should be pruned with a saw to get a smooth cut, lest the jagged ends and peeling of bark should lead to stem dry-back.

“Mowing the lawn regularly and also raking it once a year can also be termed as pruning.

In the event of heavy fungal diseases and insect attacks, pruning is recommended along with application of pesticide,” says Mr.Hussain.

Sharp secateurs is a must to administer clean cuts, after which a paste of fungicide and insecticide may be applied or sprayed on the exposed parts. When a stem is cut for propagation, the location of cuts should be based on the number of nodes and the distance between two nodes.

Cuts should be given just above the top node and just below the bottom node of the required stem, to avoid stem dry-back. Cut ends have to be slightly slanting to avoid infections.

If a plant has to be trained straight, side and lower branches need to be pruned and if the requirement is of a good canopy, then the top foliage should be trimmed regularly.

Resident welfare bodies take up only civic issues

It is true that the resident-owners while obtaining loans from various banks for reconstructions/ modifications /alterations /extensions, face certain queries on genuine residing status and occupancy and in order to prove the same items such as electricity bill, landline telephone bill, registered document and up-to-date Encumbrance Certificate from the Sub-Registrar concerned have to be produced in support of the claim.

It is not fair on part of the residents to obtain certificates from the Welfare Associations concerned to claim home-loans.

It should be noted that Resident Welfare Associations are registered only to mitigate hardships collectively on the civic irregularities/ requirements. Therefore, obtaining loans is to be done by owner solely in personal capacity.

C.V.K. MOHAN VARMA Begumpet

Have an opinion on issues concerning building policies and real estate developments? Feedback on stories appearing in the supplement is welcome.

Home loans to Non-resident Indians

Many of us may not be aware of the terms and conditions applicable to such loans

Generally, almost all of us are aware that banks and other Financial Institutions do grant loans for investing in properties to Indian Nationals staying abroad. But many of us may not be aware of the terms and conditions applicable to such loans.

Let us have an in depth look into the subject.
Who is an NRI or PIO?

The Foreign Exchange Regulation Act (FERA), 1973, defines an NRI as:

an Indian citizen -

a) who stays abroad for employment

b) who is carrying on a business abroad

c)a Govt servant who is posted abroad on duty and drawing salary out of Govt resources

or Govt servant who is deputed abroad on assignments with Foreign Govts or Regional / International Agencies like, World Bank, International Monetary Fund, World Health Organisation, Economic and Social Commission For Asia and the Pacific.and the like,or. d)Employees of State Govts and Public Sector Undertakings in similar manner..

There is no time limit prescribed for the foreign assignment, though one has to be away from India for a minimum of 181 days to be treated as NRI..
Purpose of the loan

The home loans are normally extended for-

purchase of a site

Building a house

Extension and improvement of the existing house, and

Renovation

Other than the above, if the request is for investment in property as a saving plan, even that is not barred , but it should not involve any speculative activity.

RBI Guidelines

The guidelines of Reserve Bank of India lays down a maximum loan of 85% of the cost of dwelling house. The applicant’s contribution is required to be brought in by direct remittance or through the NRE (external) account or NRE (Ordinary) account of the applicant. Repayment of the loan instalment also should be by direct remittance or through NRE accounts.
How to apply?

All the Banks/Institutions have their websites and one can access it, download an application form and apply ‘on line’ for the loan. In case a foreign branch of the institution is located near by to your place of stay, that branch can be approached for assistance.

Application form

A look at the application form prescribed by most of the lending Institutions may be elaborate the form is.

In addition to the various routine information/particulars, a resident has to fill in and provide, the NRIs will have to provide the following additional particulars-

Details of occupation or business abroad

Details of employer

Particulars of salary/ income

Credit history

Bank accounts

Details of properties in India

References in India, including that of a relative

Passport no and date of expiry, along with an attested copy of specified pages

Copy of driving licence (international) Credit card information, etc The declaration at the foot of the application also includes a certificate regarding cheque return history, and authorization to make references to listed agencies/people..

Some additional questions such as, the length of stay abroad, who will occupy the house built/purchased , special reasons for going in for the proposed investment in the place proposed,

area specific details like, carpet, bult up, super built etc which are India specific

Cost break up like, site cost, building cost, agency commission etc, will also need to be answered.

Consultancy services

Some lending institutions in India offer consultancy services like, ‘location selection’, engaging of architect/designer, etc. free of cost, which may be useful as they are of vital importance to the decision to buy the property.

Critical aspects relating to lending to NRIs

In many cases, the NRI goes by the web site data, which may need to be cross verified by ground level realities as, often the web site data may not be quite up to date.

The banks may do its own verification, which will be in the interest of the NRI.

The lending institutions have massive experience in the field and this may be of good use to the NRI borrower.

Special Real Estate Zones

Andhra Pradesh could well be the next site of contestation against Special Economic Zones (SEZs), going by the growing protests by farmers over the manner in which huge chunks of land have been — or were sought to be — taken away. It is not industrialisation per se but what is happening in the name of promoting SEZs that is certainly cause for concern. Close to a 100 SEZs have already been approved in the State and an equal number are in the pipeline, but a deeper analysis would reveal that the intent behind these projects is not exactly the furthering of what the special zones are meant for — encouraging export-oriented units and thereby generating additional employment and foreign earnings. One is inclined to believe that the hue and cry being raised by citizens’ organisations and opposition parties over the manner in which the Y S Rajasekhara Reddy government has gone about sanctioning SEZs is not without basis.

With close to 50 per cent of the approved projects clustered in and around Hyderabad, the rationale behind locating them here has more to do with the high value of the lands, so much so that they are being described as “Special Real Estate Zones” rather than SEZs. In one case, a huge chunk of land allotted within the capital for what was described as an IT SEZ has now more or less been converted into a group of residential/ commercial complexes. In the case of another SEZ, not far from Hyderabad, the oustees have been staging protests for months over the paltry compensation paid to them but the government has done nothing to redress their grievances. On the other hand, the promoters have so far not achieved anything concrete in terms of the projects supposed to be developed, giving rise to doubts that the land was taken for a purpose different from that stated.

Elsewhere, in the coastal belt, fishermen and farmers are blockading roads and holding dharnas over the proposed “Coastal Corridor'”which envisages highly polluting chemical units along the coast, unmindful of the fact that they would seriously endanger the environment apart from displacing thousands of people. The sooner this government realises the need for corrective measures, the better. Two key aspects need to be borne in mind: One, ensuring that only those projects conforming to stated criteria are cleared and those displaced on that count are adequately compensated; two, the projects are closely monitored to ensure that their objectives are not compromised at any stage.

SKS Microfinance Raises $75 Million (Rs. 366 Crore)

Hyderabad, Andhra Pradesh, India, Monday, November 10, 2008 -- (Business Wire India)
-- Funds will be used to accelerate outreach to 8 million members

SKS Microfinance Pvt. Ltd. has announced the closure of a fourth round of equity funding in which it has raised $ 75 million (Rs. 366 crore). The landmark transaction, led by Sandstone Capital, represents the largest private equity investment to date in microfinance globally.

Based in Hyderabad, SKS has provided micro-insurance products and Rs. 4,729 crore ($ 979 Million) of micro-loans to 3.3 million poor households across 18 states in 50,000 villages and urban slums of India. Its members have maintained a 99% repayment rate. The new equity investment will help SKS expand its outreach to 8 million members over the next two years.

Commenting on the investment, Vikram Akula, Founder and CEO of SKS Microfinance, said, “the fact that this investment has come during the global economic meltdown is proof of the confidence that investors have in SKS—and more importantly of the resilience and entrepreneurial abilities of the poor not only to survive in today’s economic crisis but actually to prosper because the poor are largely de-coupled from global trends.”

Sandstone Capital led the investment and was joined by existing SKS investors Kismet Capital and SVB India Capital Partners (an affiliate of Silicon Valley Bank). Edelweiss Capital is the investment banker to the issue.

Paresh Patel, Founder and Managing Partner of Sandstone, said, “At SKS there is a unique opportunity to build one of India’s next great companies, such as Bharti, Infosys or L&T. SKS has the right pedigree of leadership, an enormous market where they possess a superior operating model, a desire to incorporate best practices in corporate governance and a passionate set of employees that are driven by the singular mission of enabling the poor, profitably. Our investment will give some of India’s poorest communities the opportunity to improve their lives while simultaneously providing investors returns that are uncorrelated to traditional finance businesses.”

Ashish Lakhanpal, MD, Kismet Capital added, “India’s microfinance industry is evolving rapidly, with greater efficiency, improved transparency, and increased professionalism. SKS is at the forefront of this movement and is an excellent example of how well-run businesses are able to deliver social solutions that are scalable, sustainable, and profitable.” Indeed, impact studies of SKS show that its borrowers earn returns on their micro-enterprises of up to 100% and that their increased incomes lead to improved health, education, and general welfare.

Commenting on the fund raising, S. Dilli Raj, Chief Financial Officer, SKS Microfinance, said “Capitalization of this size has a positive impact on leverage and capital adequacy. The impressive net worth of Rs.610 crore ($126 Million) further encourages credit extensions from SKS’s stable funding partners in the banking system and this will enable us to meet the financial needs of our existing micro-borrowers as well as new borrowers.”

SKS was launched in 1998 and is India’s leading microfinance organization. It works on three inter-linked principles to scale microfinance. This includes using a for-profit methodology to access capital, drawing on best practices from the business world to speed growth, and deploying technology to overcome high delivery costs. SKS blends this rigorous business approach with a strong social mission that includes ensuring that its members continue to hold a significant stake in the company and benefit from profits that the company earns.

Sequoia Capital, Vinod Khosla, SIDBI, Unitus and Columbia Ventures Corporation are among the existing equity partners of SKS Microfinance. SKS Borrowers represented by Mutual Benefit Trusts are also one of the largest shareholder groups in the company.

About SKS Microfinance

SKS Microfinance is a non-bank finance company (NBFC) whose mission is to eradicate poverty by providing financial services to the poor. Launched in 1998, SKS Microfinance is India’s largest and one of the world’s fastest growing microfinance organizations with an annual growth rate of 200 per cent. It currently serves 3.3 million clients across 50,000 villages and slums in 18 states and has disbursed Rs. 4,729 crore ($979 Million) in loans with a 99 % repayment rate. SKS also provides life and health insurance to its clients.

SKS operates in the states of Andhra Pradesh, Karnataka, Maharashtra, Orissa, Madhya Pradesh, Bihar, Uttar Pradesh, Rajasthan, Uttaranchal, West Bengal, Jharkhand, Chhattisgarh, Gujarat, Kerala, Punjab, Haryana and Delhi.

SKS has received numerous awards including the CGAP Pro-Poor Innovation Award, the ABN-AMRO/Planet Finance Process Excellence Award, Information Integrity Award, the Digital Partners SEL Award and the Grameen Foundation USA Excellence Award. It was founded by Vikram Akula, who was named by TIME magazine as one of the 100 Most Influential People in the World(2006).

About Sandstone Capital

Sandstone Capital is a long-term investor in public and private companies in India and the subcontinent. Founded in 2005, its objective is to deliver world class, absolute investment returns by investing in Indian companies across all sectors and market capitalizations. Sandstone has invested and executed transactions in multiple industries including oil & gas, power, banking, retail, real estate, technology, telecommunications, internet, infrastructure and commodities. Sandstone believes that, with investors and management teams, there is a need to forge lasting relationships, built upon the values of integrity, trust and mutual respect. Sandstone is one of the larger India-dedicated funds with a worldwide investor base that includes university endowments, public and private foundations, family offices, individual investors and other institutions.

About Kismet Capital

Kismet Capital is an investment firm focused on private equity, mezzanine, distressed, and special situation opportunities in India and ASEAN countries. Since its founding in 2004, Kismet has invested across numerous sectors including real estate, financial services, hospitality, energy, and contract manufacturing. Kismet has operations in New York, Mumbai, and Bangkok.

About SVB India Capital Partners an affiliate of Silicon Valley Bank

SVB India Capital Partners I, L.P. is a venture capital fund focused on Indian companies and co-invests across various industries and stages with other top-tier venture capital firms. Silicon Valley Bank is the premier commercial bank for companies in the technology, life science, private equity and premium wine industries. SVB provides a comprehensive suite of financing solutions to its clients worldwide. Founded in 1983 and headquartered in Santa Clara, California, the company serves clients around the world through 27 U.S. offices as well as operations in China, India, Israel and the U.K. Silicon Valley Bank is a member of global financial services firm SVB Financial Group(NASDAQ: SIVB). More information on the company can be found at www.svb.com.

About Edelweiss

Edelweiss Capital Limited (www.edelcap.com) is one of India’s leading financial services firms. The Group’s businesses include investment banking, institutional equities, private client broking, asset management, wealth management, mutual funds, wholesale financing and financial products distribution. The Group has built strong corporate, institutional and investor relationships backed by a research-driven approach and a proven ability to capitalize on emerging market trends. The Edelweiss Group employs over 1800 employees including 90 research professionals, leveraging a strong partnership culture and unique model of employee ownership. It now operates from 60 offices in 25 cities.

When IT loses sheen, dark days await techies

BANGALORE, INDIA: October 29, 1929, is written in the world history in black letters. It was on that 'Black Tuesday' that the stock market crashed, officially setting off the Great Depression. More than 25 per cent of the workforce lost jobs in the months to come and the bleak scenario prevailed for over a decade, till the World War II.

And now every day is a 'Black Tuesday' with things getting darker every moment. The techies who led a hi-flying life till yesterday are in a state of uncertainty, as they don't know what would happen tomorrow.

Any moment anybody can become unemployed… As the financial tsunami has hit the Indian shores as a result of the economic disaster in the West, many Indian companies have started giving pink slip to their employees citing the reason of poor performance to poor dressing.

Non-performing asset!

It was quite recently that IT major Satyam had laid off nearly 100 employees from its offices in Hyderabad. In Chennai too the company had terminated over 30 employees, saying that they may have 'fudged' bills after being relocated to Chennai from Hyderabad.

They reportedly got hardly two hours' notice "to resign or face termination", sources said. Most of them were shown the door for "behavioral issues'', "poor performance'' and in some cases, "poor dressing'' at work! When economy slumps employer finds problems with the behavior of the employees and even their dressing patterns!

During the good times these companies never bothered as to what the employees wore or how they behaved.

In Wipro nearly 1,000 employees have been given the marching order, while around 300 employees are under the scanner for non-performance.

In February, Tata Consultancy Services had asked nearly 500 'non-performers' to leave while IBM had asked about 700 Indian employees to leave, again on ground of non-performance.

Quite recently, another software company, Virtusa, laid off nearly 300 employees in Asia, most of them from India. But the sacking in the name of 'nonperformance' is actually a belt tightening exercise, though the companies would say this is part of the appraisal ritual.

Pressing the panic button

The panic in the industry was very clear when ASSOCHAM had warned in a recent report that Indian firms are likely to lay off 25 to 30 per cent of the work force very soon and IT-enabled services (ITeS/BPO) was also included in the list that faced a potential threat of job loss.

Though the government had criticized the organization for making such 'irresponsible' statement, the present state of affairs shows that ASSOCHAM was right.

Indian Prime Minister Manmohan Singh had even asked the industry not to resort to retrenchment and the industrial leaders had assured him that such a step would not be taken.

But what happened in reality, everybody knows. Even the Reserve Bank of India's amended monetary policies did not help save the India Inc, where many employees are facing the blues in the form of pink slip and forced resignation.

According to a recent report, L&T Infotech is planning to reduce its workforce by 5 per cent, which means 10000 people would soon be jobless there. Last week only IBS Software of Thiruvananthapuram Technopark had sacked around 30 employees, who were branded 'non-performers'. Yes, the present development is a global phenomenon.

From IT to real estate to finance to hospitality, the workforce is facing the heat of the financial meltdown all over the world. According to market analysis firm briefing.com, in October, job cuts were huge in almost all fields in the US.

More than 2,40,000 people lost their job in October only. Over the first 10 months of 2008, 1.2 million jobs have been lost, but tellingly, over half of those losses have occurred in just the past three months, briefing.com said.

Evaluating the scene in America, President elect Barack Obama had said prior to the election: "Washington needs fundamental change because it has failed the American people". But now we will have to wait and see whether Obama will be able to save the world from the economic disaster.

Who will wage the war?

In the backdrop of the global economic meltdown, fresh graduates might find it difficult to get rewarding jobs for the next two years, according to Kris Gopalakrishnan, CEO of Infosys. "Fresh graduates will be affected in the next two years. They may not find the sector very attractive," he had stated the other day. And the recent trend among the software engineers justifies what he had told.

According to a report from Hyderabad, the IT mania is more or less over in India. While many of them have left the job to get into the field of their choice, the fear of being unemployed is also forcing them to switch over to other fields.

The heat can be felt in many premier institutions as well. Campus recruitment is fast becoming a thing of the past. A recent report said that 15 students of IIT-Kharagpur got regret letters from three top US IT firms.

These students were initially offered a huge package during the campus recruitment but this changed all of a sudden and the offers were withdrawn. Ironically the Great Depression of the twentieth century ended with America joining the World War II in 1941.

And the present Depression began from the same country only. Now it's time to wage another war - a war without bloodshed - to revive economy and make the high-flying ones to come back to the down-to-earth realities.

Do you think the present scenario will provoke the techies to come into terms with the social realities and come down from the ivory towers of of high-class lifestyle?