Foreign Direct Investment(FDI) in real estates and retail and development of SEZs

Hyderabad's metamorphosis has pushed up property prices be it a commercial establishment or residential complex However, certain areas like A.S.Rao nagar, Lalaguda and Tarnaka etc in Secunderabad are reasonably priced and well within the reach of the common man. But will the overall boom in the real estate sustain? This is a question bothering many a investor and buyer. A lot of talk has been floating around the news media lately about the "bubble" theory of real estate, that is, the theory that the real estate market values have reached unsustainable levels and they will burst like a bubble. As Deepak Parekh chairman, HDFC dismisses this boom as a ‘bubble' waiting to burst. ‘‘This is not driven by people buying for self occupation,'' he says, ‘‘It's ridiculous and definitely not affordable. Nowhere in the world do property rates go up on this scale. Prices are going up everyday. It's a fraud.'' When the bubble bursts, housing prices tumble, which causes the real estate market to collapse, often followed by a recession in that area.

Most of the other metroes and even smaller cities like Manglore, Chandigarh, Mysore are witnessing a sudden spurt in real estate prices. One reason can be that few IT companies have relocated and some are in the process of shifting from metroes to smaller cities where traffic hassles, infrastructure problem and attrition rates are low.

IT outsourcing to India - Analysis of cities – a report released by Gartner Inc. predicts that by 2010, Hyderabad and Chennai will replace Bangalore and Mumbai as the favoured Indian destinations for IT outsourcing. The study has categorized and evaluated the cities into four tiers based on various factors including infrastructure, skills availability, skills retention, access, cost of living, political support and quality of life.

The report also stated that certain drivers enable these cities as favorable destinations for outsourcing. These include improving infrastructure, overall skills availability, good quality educational institutions and active political support.

Commenting on the report, Partha Iyengar, vice president, Gartner, said: "Bangalore and Mumbai will soon cease to be the default centers for offshoring. Ready availability of skilled labor force with lower attrition rates in cities like Chennai, Hyderabad and Pune will lead to companies setting up centers there instead."

Hyderabad rates almost at par with Mumbai in all factors evaluated, but has scored much higher on 'cost of life' and 'quality of living' where Mumbai has received the lowest ratings.

The improving infrastructure in Hyderabad has enabled the city to top the ratings in the infrastructure category.. It can be safely concluded that Hyderabad definitely offers good value for money to investors and end users alike.

Unlike developed countries like China and United State, the real estate sector in India has failed to garner due importance from the government. The recent budget has proved this yet again by not addressing vital issues like Foreign Direct Investment(FDI) in real estates and retail and development of SEZs. The real estate in our country which generates 30 percent of the employment in our country holds tremendous potential to boost our economy if given due importance.