Credai Magazine - Single Page

Cover Story
Issue
Improving Urban Housing
October How do we
November
December
strategize to
2010 provide Homes
for All
- Mukta Naik
Blue Gold - Vivek Menon
Between
a rock
a soft place
&
- Anil Parameswaran Nair
Office real estate -
Creating
symbiotic
relationships
- Akash Deep Jyoti
Quarterly in house magazine of CREDAI National

Dear Members,
Our constant endeavor has been to add new and

valuable content to the Magazine on a continuous
basis for the benefit of our members. Hope you
have appreciated the articles on Management and
Spiritual aspects starting from the last issue. This
issue has an article from one of the most respected
brand consultants of the country Mr Harish Bijoor
discussing marketing strategies. You will also have
another piece from Mr. Anil Parameshwaran Nair
who himself is an executive editor of the UBM
India Magazine “Property World”. This issue also
has a bonus - as against one article by a Banker
every issue, we have contributions from 2 leading
Bankers – one on ‘base rate’ and another on ‘future
opportunities of Real Estate’.
Research Organizations and Newspapers have once again started predicting correction in Real Estate prices.
Such predictions can bring about sluggishness. I am not sure how far these reports are correct. On one hand
IT sector is booming again, millions and millions of sq ft of commercial space has been absorbed by IT and
other sectors during this year, IPP and Core sectors have shown better results during the 2nd quarter, RBI has
suggested that the banks should increase deposit rates to encourage savings and to reduce lending rates to
encourage investments, campus selections are back again, hiring by all the sectors is in full swing, income
levels have gone up, consumption seems to have picked up rapidly, the malls are brimming with activity again.
Sum and substance is that the overall atmosphere is vibrant. When the country is showing all round growth
and prosperity, I do not know how Real Estate can move in the opposite direction.
Union Government is targeting an aspirational GDP growth. Support to Real Estate can ensure that the country
kisses this magic figure of 9% growth. If you want to sell a pin you need Real Estate, if you want to sell an
elephant you need Real Estate, if you want to create jobs you need Real Estate, if you want to create infrastructure
you need Real Estate, you need Real Estate for every activity – small or big. Therefore the basic “raw material”
for the growth of the GDP is Real Estate. As such the Real Estate deserves support at the supply side. It is hoped
that RBI and the Government of India take urgent and adequate steps in this regard.
Regards,
A Balakrishna Hegde,
Editor
The Editor is the Managing Director of Chartered Housing, Bangalore and Past President of
CREDAI - Karnataka.
Dear friends,
At the time of writing this, our nation is in

the midst of a number of scams : 2G, CWG,
the Adarsh building plus a number of other
land related issues looming on the horizon,
threatening to join the list.
Politicians are, by the common people, presumed

to be guilty unless proven innocent.
All this is very disheartening and is a matter

of great concern.
We, who are in the business of Real Estate development are vulnerable to many of the ills
that plague players in a ‘License Raj’ – namely corruption and coercion.
It is in our long term interest to push for a Regulatory Act that make Developers plus the
authorities accountable for their actions (or inactions). It is also in our interest to adopt and
implement our code of conduct - in letter and spirit. Not doing these things will be a clear
declaration of being short sighted.
Through CREDAI, we need to make many positive changes in our industry and also force
changes in others – Should we act? Will we act? What is the way forward?
Regards,
Kumar Gera
Chairman
Dear Friends,
The Indian Real Estate Sector is witnessing a metamorphosis. The

sector, which was grossly neglected, is now taking giant strides
and is all set to dominate the growth curve of the country. And
as our economy grows, the aspirations of the new age nation
grows even faster.
Providing “Housing for All” has become the mandate not only
for the Government, but for all of us who are engaged in the
development of this core sector. The moot question that needs
to be answered is how do we achieve this mandate? CREDAI
is of the firm view that all stake-holders need to work together
to achieve and fulfill this dream. With this end in view, we, at
CREDAI, have organized the 10th NATCON at New Delhi, in
which all the stake-holders, namely the Ministries of Housing,
Urban Development and Finance, will deliberate on what needs to be done. The convention has been aptly
titled as “Housing for All – Working Together”.
Radical policy initiatives are required to be taken. Be it providing finance for creating infrastructure, motivating
the State Governments to frame effective policies for the development of housing, redevelopment of slums or
setting into motion policies by which new townships can be created with the greatest speed. The task, we all
realize, is not easy. We have to be very firm in our resolve, we need to be bold in our approach, we need not
be afraid to think out of the box.
A report published by McKinsey has assessed that the migration to our cities is growing exponentially. India’s
urban population is expected to soar from 340 million in 2008 to 590 million in 2030 and this urban
expansion will happen at a speed quite unlike anything India has seen before. MGI estimates that India needs
to invest $1.2 trillion just in capital expenditure in its cities over the next 20 years. These figures are startling.
It is important for us all to wake up and face the challenge with grit and determination. We shall endeavor to
draw and focus the attention of the Government to play a decisive role in bringing the various wings of the
government together in a single platform to build a strong sustainable and vital infrastructure to support the
growth of satellite townships.
We, friends, have a very substantive role to play, and in the process of expanding our businesses we will be
able to build the very foundation of our great nation. I call upon my fellow developers to stand united in our
resolve to build an India in which we would all be proud to live, with social harmony and respect for our fellow
brethren.
Warm regards,
Santosh K Rungta
President, CREDAI
28 30
Office real estate - Cover Story
Creating Improving
Urban
symbiotic Housing - Mukta Naik
relationships How do we
- Akash Deep Jyoti strategize to
provide Homes
15
for All
Let us together make India Truly Green!
- Syed Mohamed Beary 12
Recognition 20
A Lessonin NSDC- BANGALORE INITIATIVE

- Suresh Hari 36
Humility Are you Future-Ready?
Professional’s Quote 5 Steps to Building an “Information-Edge” In Real Estate

- Subroto Bagchi - Prashant Das, Divyanshu Sharma 38
Service tax -
Realty players caught between Writs and the Department
- S Sivakumar 46
Three Chickens
&
19
55
an Egg!
Letters to Editor
- Harish Bijoor
17 24
New Base Rate System
Of Banks
NEAT INDIA- Umar Teekay
- Rathnakar Hegde
21Gold
Blue Editor
A. Balakrishna Hegde
Editorial Board
- Vivek Menon
Irfan Razack
Ranjit Naiknavare
Pradeep Jain
Niranjan Hiranandani
Dharmesh Jain
- Swami Sukhabodhananda
The Ant Harsh Patodia
50
Uzma Irfan
and its G P Savlani
Philosophy Design & Layout

Swami Sukhabodhananda GAAP Communications Pvt. Ltd.
of Prasanna Trust Email: mail@gaapcommunications.com
Printing
Jwalamukhi Mudranalaya Pvt. Ltd.
41
Please send in your feedback,
Between contributions and advertising queries to :
&
GP Savlani,
a rock Resident Director,
a soft place
Confederation of Real Estate Developers’
Associations of India
- Anil Parameswaran Nair
CREDAI - National Secretariat
703, Ansal Bhawan,
16, K.G. Marg,
New Delhi - 110001
44
Ph: 011- 43126262, 43126200
REAL ESTATE – Fax - 011- 43126211
FUTURE Email: info@credai.org

Website : www.credai.org
OPPORTUNITIES & Inhouse Magazine for Private Circulation.
BANK FUNDING
Not for sale
- Rathnakar Hegde
Let us together make
India Truly Green!
- Syed Mohamed Beary
Editor’s Box and a half earths, while
Amazing effort by Indian Green Building Council that should
we would need six and
inspire all of us to do our bit and at the end of the day it’s
a half earths to maintain
a win-win both for Developers and for Mother Earth.
the living standard of
I
ndia’s population is projected to be 1.26 U.S.A. To negate this
billion by the year 2016 and it is expected and in order to facilitate
to overtake China to be the most populous growth without impairing
country by 2050. Furthermore around 40 the habitat we have
crore people are estimated to migrate from rural areas to to conserve resources,
urban centres. It is therefore imperative that India plans for recycle and leave the least
high economic growth in all sectors. Such growth will leave ecological footprint.
behind large carbon footprint and green house gases. Another

alarming factor to note is that human consumption of Natural
The Indian Green Building Council
Resources has doubled in last less than 50 years and presently
(IGBC), a part of CII has taken giant
we outstrip what the Earth can provide by more than half. Even
strides and is successfully leading the
If we continue to consume at the present rates, we would need
Green building movement in India.
two Earths by 2030. Vast majority of world population does
IGBC is consciously striving to teach &
not enjoy a fair standard of living while European & American
inculcate ‘Green practices’ and believes that its success lies
countries consume far more than their due share of world’s
in changing trends and mind sets to make ‘Green Practices
natural resources. If the developing world were to maintain
- A way of life’. Its vision is to sensitize key stakeholders to
a living standard of European countries, we would need two
embrace green and pave way for India to become a Global
12 C r e d a i I s s u e - O c t o b e r - N o v e m b e r - D e c e m b e r - 2 0 1 0
• LEED India NC (New Construction)
• LEED India CS (Core & Shell)
A host of other programmes are on its anvil and IGBC

is working on initiating the following shortly:
n IGBC Green Cities
n IGBC Green Schools
n IGBC Existing Buildings (Retrofit)
n IGBC Landscape
To become more forceful and effective the council

needs Government & Industry collaboration and
People Participation. This could be achieved through
augmenting membership and impelling Govt.
partnership through legislation and by introducing
various incentive schemes and simultaneously
galvanizing Stakeholders i.e. Developers, Architects,
Product manufacturers, Corporates, Government
Agencies, Academia etc to embrace green
initiatives.
Going Green as a community means that we need to

leader in Green buildings. To achieve this, it aims to champion
be more responsible and proactive in protecting the earth’s
a grass root movement and bring ‘Green sustainability’ to
ecological balance. This environmental consciousness should
the Indian mainstream by enlisting members from every walk of
be present, whether we are dealing with government policies,
life to participate in various green initiatives and simultaneously
or industrial and economic activities, or in our daily living. On
marshal widespread dissemination and awareness campaigns
a larger scale ultimate transformation can only come through
through local chapters spread across India. IGBC has come a
education; therefore we must also encourage and provide
long way in its endeavour with creditable achievements (some
our students with the knowledge, tools, and inspiration to
of which are enlisted below) to place India as a world leader envision and aspire for a sustainable and peaceful world.
of Green Building. In this way, we would have built the foundations for a more
environmentally-conscious generation. The old adage
IGBC’s achievements & leadership in India is commendable.
‘Waste not Want not’ advocates sustainability in simple
From just 1 green building in 2001 measuring a mere 20000
terms. ‘Reduce, Reuse, Recycle’ should be the mantra of
sft, its efforts have helped to remarkably raise the figure to
our daily life.
765 green buildings of over 465 milllion sft. In addition to
the same in the last 9 yrs it has also introduced around 150 In an enlightened era of global awakening to the need for
varied green building products and equipment and enrolled proliferating greenery and adopting green practices, IGBC is
over 1046 members (including 90 founding members). Not a trendsetter and sets the pathway for a Green future. IGBC
only this, it has also successfully made an inroad in Govt. beckons one and all to adopt Green practices and be its
circles with 33 green buildings of 6.38 million sft. ambassador for Green. Come join hands and partner with
IGBC to make India the forerunner of the Green Building
Furthermore IGBC has launched following rating systems to
Movement. To know more about IGBC and become a member
suit different asset class:
kindly log on to www.igbc.in
• IGBC Green Homes
• IGBC Green Factory Buildings SYED MOHAMED BEARY is the firebrand chairman of IGBC,
• IGBC Green SEZs (Jointly with Ministry of Commerce & Bangalore Chapter and also the C & MD, Bearys Group,
Industry) Credai Member.
A Lessonin
- Subroto Bagchi
be put from the brain to the
Humility
abdomen.
The hospital administration

obliged to treat the patient in
Professional’s Quote
the general ward free of cost.
Doctors donated drugs the

boy needed; other patient’s
Editor’s Box attendants and relatives
One becomes a professional more through the quality of
helped them by giving them
work he does than due to his qualification, is the essence
food and moral support in
of this beautiful real life anectodote. spite of language barrier.
H
ere is a lovely piece from a professional I have never The boy was operated upon and he made remarkable fast
met but like many of you, keeps in touch over the recovery. Even before a week passed, he was eating by himself
Internet. Dr. Ramana is a neuro-surgeon from Vizag and walking around the ward. He started gaining weight.
and he has this absolutely humbling story to share. All these happenings gave me a real “feel good” within and
appreciation from others.
“The ghat-road passing through deep jungles on the way
from Koraput to Visakhapatnam (Vizag) is dotted with But the patient’s father was stone-faced with no expression of
hamlets inhabited by tribal people living in harmony with happiness nor did he offer thanks. This attitude troubled me
nature. Medical facilities are not easily available unless they throughout their stay in the hospital. On the day of discharge
travel to the nearest town - sometimes to a primary health I couldn’t resist asking him if he should be thankful to all us
centers through forest paths carrying the sick on a make for putting his son back on his feet again and almost free of
shift stretcher. Usually the literate among them or patients cost in a modern corporate hospital. He was surprised and
from small towns who have relatives at Vizag come here for asked why should he? The purpose of bringing him here
specialized treatment. This is how a family of four landed up was to have him cured - so why the thanks? If that was not
at our hospital one night. the case, “Why would I have taken all the pains to shift him
here?”, he asked me.
The father and mother were holding a thin boy of nineteen
years in their rough, weather beaten arms. The younger sister Then he told me that he had sold all the land he had for five
was hiding behind the mother’s sari awed by the hospital’s thousand rupees, and for first time entered an unknown place.
bright lights. The troubled little group radiated innocence, pain Other than his hamlet the only place he had ever visited is the
and poverty. The boy was shifted to Neuro ICU immediately. He weekly “haat” (open air market) near his village to sell the forest
was unconscious for fifteen days and also malnourished due to products he collected for the whole week. He wanted to save his
vomiting and dehydration. Prior to becoming unconscious he was child and that alone made him venture into a big city.
having headache and fever. The boy was diagnosed as having
The halo around me crumbled.
raised intra-cranial pressure. I called aside the boy’s father and
My contribution did not seem too much compared to what he
spoke to him in Oriya. I told him that his son needed a CT Scan
was doing for his son.
first and later he may require surgery.
After all this I felt some of the elation leaving me, but I still
The father asked me to go ahead with the treatment and not to worry
felt like laughing.“
about expenses, as he had brought five thousand rupees with him.
Subroto Bagchi is best known for co-founding MindTree in
The answer grounded me. The expenses could run up to more
1999, India’s most admired companies across industries.
than ten times the amount! I explained this to the father of
In 2008, Bagchi took on the role of Gardener at MindTree
the boy. We gave him the other option - of shifting him to the
where he spends one-on-one time with the Top-100 leaders
government general hospital for continuing treatment. The
at MindTree to expand leadership capacity. Bagchi is on the
family members became annoyed at the suggestion and wept.
Board of Governors of the Indian Institute of Management,
They did not agree and I had to give up persuading them.
Bangalore. Bagchi has authored three business best-sellers:
Giving up the persuasion trail, I requested the scan center to do The High Performance Entrepreneur, Go Kiss the World and
free a CT scan of the brain. The scan confirmed hydrocephalus; The Professional as Penguin Portfolio books. Currently, he writes
a condition that required surgery. He needed a shunt tube to a column titled “Zen Garden” in Forbes India.
NEAT INDIA - Umar Teekay
Editor’s Box plastic waste, the bowel

Swanky India & Dirty India. Two distinctly different sides
churning sight of spit
of our country, are beautifully picturised in this article. The
& human waste in the
author suggests the solution to bridge the two party is in the
middle of our cities, our
hands of the Developer. So true.
badly maintained public
transport & indisciplined
A
couple of months back I was in Delhi to attend traffic, the haphazardly organized buildings & shabbily
one of those ostentatious weddings. There maintained facades, the quagmire of cable mess that is
were four mega functions, three in Delhi’s cluttering our sky-line, the garishly displayed publicity
swanky hotels & one in the bride’s sprawling materials, the unclean roads, the ugly public infrastructure, the
mansion in Rohtak, Haryana. For the Rohtak do, we were ever mushrooming slums, the smell, the stench, the pollution…
ferried from our Delhi Hotel in a fleet of Mercs & I had the where does one begin? And who will take the initiative to set
opportunity to travel with an American gentleman called Joe. this right?
This was Joe’s first time in India & in the previous two days he
I don’t think there is an easy answer to this. But there is no
had only seen the better part of Delhi. Until we hit the road to
harm in discussing some basics.
Haryana he seemed to have a wonderful image of India from
what he had seen up till then easily complimenting the Indian A very basic requirement of any cleanup drive is to arrest the
IT juggernaut stories that he was fed with back home. spread of filth. Primarily we must find ways & means to prevent
its continued generation. No doubt this is the responsibility of
The three hour trip between Delhi & Rohtak was like a rude
every single Indian. But in a country where most citizens have
shock to him. The filth & the squalor, the dust & the slush, the
more pressing basic needs, it would be impossible to make
aimless crowd & the wandering cattle, the dented buses &
neat & tidy India their priority; not now, not for a couple of
unkempt shop fronts…the overall ugliness that kept hitting our
decades! Moreover, this is in the domain of habits and old
view with unfailing regularity was evidently too appalling for
habits die hard. So obviously, one needs to think of some
his senses. He wanted to know if it was the same with rest of
doable initiatives that can be the responsibility of a chosen
India as well!!
few and in turn can shape a new Indian habit.
If any of you have traveled on that road and also across

I am reminded of a simple granny’s rule– “Neatness begets
India, you probably would have replied that it is much worse;
Neatness”. In other words, neatness in the surrounding quite
except that we are so used to the mess that our senses have
often induces neat habits. While it may be an Indian habit to
become numb to it. It takes an occasional foreigner to wake
be irresponsible or indifferent in dealing with public spaces,
us up & bring it to focus. No denying the fact that India is a
there is no denying the fact that the human brain is conditioned
huge mess.
to appreciate things that are neat & orderly.
Joe had another disturbing question- “I know you guys are

An example that I can think of is- if you travel with our desi
taking huge strides in technology & your economy is booming;
cousins on a Southeast Asia tour, the very same people who
I have no doubt that you will be a developed country pretty
would spit paan & throw trash casually in India would suddenly
soon; but how are you going to clean up this mess?”
behave disciplined in Singapore & become the same
Indeed – how are we going to clean up this mess? The uncleared desi guys again the moment they reach Thailand
garbage piles, the irresponsibly left behind construction debris, or Vietnam. I don’t think all of this has
the carelessly thrown trash, the ever increasing mounds of to do with the legendary stringent
punitive measures that Singapore once had. I feel it has more If the government agencies and the builder community can
to do with the general neatness of the country that the mind join hands to spearhead a campaign that can result in visibly
quickly appreciates and prevents one from disturbing. distinct public spaces, we can probably hope for people to
follow suit and maybe, we will be able see a neat India faster
Closer home, I have another encouraging example. Take
than we imagine. Added to this, if we can train and enroll
a look at Bangalore buildings of the pre nineties. Those
the teaching community to inculcate neat habits in our future
buildings, like anywhere in India, had less emphasis on the
generation, it can be far reaching.
common areas like staircases, lobbies etc. During the nineties,
thanks to the pioneering efforts of some architects and builders, Incidentally neatness is a close companion of cleanliness.
we started seeing jazzed up common areas with high-end Cleanliness invariably follows neatness. While cleanliness
materials & finishes. And, it is now a recognized fact that with is slightly abstract and difficult to enforce, neatness can
these changes, there also has been a marked change in the be ensured because it has a perceivable and appreciable
very same Bangaloreans’ age old habit of spitting in staircase presence. That’s why, probably, it’s always ‘neat and clean’
corners & dirtying the common areas of these buildings. and not the other way around. Like Green India, Neat India
should be an equally important campaign.
Keep it neat, and generally people will keep it that way is a
time tested truth. On the contrary, if a place is a mess, even Incidentally, our American friend Joe was greatly impressed
the most civic among us misbehave. If you travel extensively in with the opulence of the wedding in Delhi & Haryana. He
China, you will see the super-duper elevated 8-lane freeways was particularly envious of the way an average rich man
and most exits from them will lead you to the old economy-small gets pampered in India. Our host in Rohtak had a palatial
town-cluttered-roads. The same driver who was an embodiment estate, a battery of uniformed drivers, a large contingent of
of super civic sense on the 8 lane will suddenly behave so well groomed personal attendants and the likes. As long as
irresponsibly the moment he hits the small town roads. How we were inside the venue, witnessing the gala rituals, Joe kept
else would you explain this? appreciating the comfort that a rich man can afford in India,
which many of the rich in the United States can’t afford, what
I am not sure my theory is absolutely right but I would like to
with 42 dollars per hour wage bills! But when we came out
believe that it is, because in which case, there is some hope;
and hit the road back to Delhi, Joe’s envy vanished. This is
because between the government and some large builders a
what he said, before he preferred to take a bumpy snooze
lot of this can be taken care of. ‘Saying No to Ugliness’ can
than get disturbed by the mess out side- “Irrespective of the
be a national campaign, like Italy did some years back with
comfort that you can afford in private, you have to go through
a fair degree of success. If governments continue to build
this mess for most part of your waking life. Back home, I may
flyovers like the ones that we encounter on our way to the
have to drive my own car, tend to my own gardens, cook my
Bangalore Airport, continue to erect road dividers that are a
own food, repair the leaking faucets myself, but when I go
visual affront, continue to make public buildings that are a
out, I don’t have to meander my way through the mess and
public shame, continue to ignore the post construction mess,
negotiate through the chaos”
continue to overlook the need for clean wash rooms in public
places, continue to…well, do an endless list of things the way How true! The nation that has already arrived continues to
they are doing now, it is meaningless to have any hopes. live in filth! How disgraceful!
And as for the builder community, haphazardly organized
Time we did some thing towards Neat India.
buildings, irresponsibly disposed debris...here too, the list
is quite long. Umar Teekay heads Teekays group, which is into corporate
interior fit out across India. Besides designing and fitting out
work places for IT companies and corporates, Teekays is also
known for some of its projects for Govt institutions like NIC,
STPI, IIIT-B etc. which stand out for their non-sarkari, corporate-
class look and feel.
Three Chickens
&
an Egg!
Editor’s Box
One short article ‘shows’ us the marketing ‘tool’ that all of us
have been looking for ever since we started selling.
- Harish Bijoor
I
n the several marketing summers I have lived, Let me illustrate this with
fought, sweated and thrived, there is one an example. Let me choose
insight that has held me in good stead. This my favorite gourmet table
is the insight of Integrity branding. bird for this example, the
chicken! Let me take three
Integrity branding is all about saying the simple truths in your
of them.
brand communication process. Stick to the tone and tenor of
integrity and you can’t do no wrong! There are really three
chickens in our marketing
Let me look at it in a manner of detailing the concept at hand.
lives. And remember, all of us are marketing people, since
The point is simple. All consumers are essentially truth seeking
there are only two kinds of people in the world. The “marketing
animals. Yes, all of us lie in some small manner or the other.
person”, who markets to others. And the “marketed-to person”
These are really the small lies that make the fabric of our
at the other end!
modern day lives. Small lies that ward off the inconvenience
of a lie-less society. Imagine three chickens out there. Each of the chickens is a
manufacturer and a marketer. Each of the chickens has done
Despite all these small lies, we are essentially truth seeking as
something they are very good at. Each has laid an egg. And
consumers. When you buy a toothpaste, you expect honesty
each of the eggs looks alike.
out of the entire exercise. The consumer-brand interaction
process is a relationship. A relationship quite like the many Each of the marketer chickens takes a different path to market
relationships we go through in our social lives. their respective eggs.
When you get into a relationship with a member of the There is the first chicken, which I call the “Shy chicken”. This
opposite sex, or let me be politically correct and say member chicken looks at the egg it has laid and finds the product
of the same sex even, you expect just one primary thing out quality to be all of 100. It then stands up, looks at the target
of the relationship. The truth. There is no relationship you get audience of potential consumers and whispers with a decibel
into expecting dishonesty and the lack of integrity. of shout that is at best 2 on a scale of 100.
Very simply put, consumers get into brand relationships based This chicken’s whisper is heard by very few of those in the
on the expectation of the truth. But does she get it? And how target audience. Even those who hear of it, hear it as a faint
much of it? And how frequently so? whisper. The promise offered by the whisper is just 2 on a
scale of 100. Those few who hear the whisper actually come
My belief is that the brand that offers the most of the truth
to see the egg, lured often by the under-shout that creates quite
most of the time in this continuous relationship is the one that
a bit of mystery in the consumer at hand.
succeeds. The brand that fails on this count is an utter failure
right away, or on the path of a self-fulfilling prophesy of doom When the few consumers actually arrive to see the product,
round the corner. there is great joy. The consumer expectation of 2 is rewarded
with a delivery of 100. The positive strokes offered in this up to look at the phenomena. The expectation is 400.
purchase is +98. The negative of this approach of course is the The delivery is 100. There is a negative stroke quotient
fact that it scores very low on consumer awareness scores. of -300. And nobody buys!
Look at the second chicken then. This is what I call the “honest All these three chickens and their respective approaches are
chicken”. This chicken looks at the target audience and shouts out there for the marketer to choose from. Each of us makes
out the product offer with a shout level of decibel 100. The this choice every living day.There are variations available in
shout quality is equal to that of product quality. the gamut of 0-400 in terms of shout levels. Different marketers
choose differently.
The pros of this approach is apparent. Awareness scores are
good. Everyone has heard that the chicken has an egg to offer. But guess what, the chicken that shouts with a decibel of 80
But there is a problem here. Consumers do not necessarily is the one that succeeds the most. Also, after 400 what? Back
respect honest chickens. When the consumer has heard the full to a decibel of 2. In a market where everyone is shouting at
story, he does not want to see the egg at all. There is just no 400, the one chicken which whispers the least is the one that
mystery. Only a few arrive to see the egg, and these are the is heard and trusted the most.
only ones who actually need an egg. And when they arrive,
Think about it. Which chicken are you as a marketer? And
they expect 100 and get 100. No positive strokes and no
which chicken are you as a working person? And which
negative. The potential of a buy is low as well.
chicken are you as a person living in a family of your own?
The third chicken is waiting. This chicken finds the
The author is a brand-domain specialist and CEO, Harish
competition hot. This chicken gets onto the rooftop and
Bijoor Consults Inc., a consulting practice with presence in
shouts with a decibel value 400. The darned chicken
the markets of Hong Kong, Dubai, UK and India.
has laid an egg but shouts as if it has laid an asteroid!
Email:harishbijoor@hotmail.com
The awareness scores are terrific. The entire town lands
O
ur member from CREDAI Karnataka, dedication. While thanking the Association for the honor
R e c o g ni t ion
Mr. M.R.Jaishankar of Brigade Group bestowed on him, Mr. Jaishankar requested fellow builders to
was honored by Builders Association look forward to take more challenges and work with increased
of India, Karnataka Center during their dedication to complete structures that will stand the test of time
Annual Celebrations. and with superior quality. He compared the efficiency and
quality of work turned out elsewhere in the world. His specific
Mr. P.C.Mohan, Honorable Member of Parliament
reference to China, where work turnout and the maintenance
did the honors in a glittering function. BAI Karnataka
of infrastructure, was a noteworthy point.
Center deemed it fit to honor Mr. Jaishankar for his
‘dedicated service in improving the Construction S.Suresh Hari
Industry and for creating World
Class structures’ in Bangalore
and elsewhere. Mr. Balaveera
Reddy- former Vice Chancellor-
VTU, Mr. Chamaraja Reddy- Past
President & Trustee of BAI , Mr. Appi
Reddy- Vice President- BAI and Mr.
K.Sridhar- Chairman, BAI Karnataka
center were present. The speakers
appreciated the effort of Mr.
Jaishankar in creating exemplary
structures and wished many more
members of the fraternity join his
Blue Gold
- Vivek Menon
of our cities in the country.
The obvious now stated,
where can we find solace?
An interceptor sewerage
system, for starters, would
Editor’s Box ensure that all the sewage
Much has been written about solution to water problems but generated finds its way
has it even served as a wake-up call asks the author. into a sewage treatment
plan (STP). An effective
W
ith twenty percent of the world’s population solid waste management
and six percent of the world’s fresh water system through a global
resources, India’s current water management tender, that has eluded
policy seems ill equipped to address this the urban dweller thanks to the wrangling within the local
fundamental problem. In a country like ours which is blessed municipality, would ensure an eco friendly approach
with significant sources of water both in terms of the melted and minimize contaminated landfills. Both of the above,
ice from snow capped peaks and adequate precipitation, implemented effectively, would keep our storm drains and
the solution seems to hinge more on water management hence lakes clear of contaminated effluent. As an example,
than in addressing the statistic. A search in “Google” the “slaughter house” at Tannery Road in Bangalore currently
reveals innumerable theses that have been written by various spews blood and fecal matter that finds its way into Ulsoor
governmental and non governmental agencies on water Lake. Sustained efforts from many local groups to shut down
management. Pundits and professors alike have suggested the abattoir and/or install an effluent treatment plant at the
various doomsday scenarios to wake up both the polity and site have been met with litigation and false promises. Similar
bureaucracy to this impending problem. While the ink has situations may be true to other cities also. In the United States,
dried on many a report, little seems to have been done to all waterways like our very own “Rajakaluves”, come under the
address this issue. Every year, drought stricken areas across jurisdiction of the US Army Corps of Engineers. This guarantees
the country cry for as much help as flood inflicted areas. For that no one ever encroaches or contaminates these lifelines.
once rural and urban India seems to wake up to the same
Most of our country is blessed with adequate rainfall barring
dilemma.
the western deserts. While the urban sprawl has depleted
While Dr. K.L. Rao’s proposal back in 1972 to link the Ganga our ground water resources, it is time for us to establish
to the Cauvery and Captain Dastur’s proposal in 1977 may aquifer recharge zones, or protected green cover, where all
have had certain inherent flaws in them, the intent to interlink development is prohibited, to ensure adequate infiltration. A
the rivers through a garland canal has found favor among storm water pollution prevention and flood mitigation plan for
many a scholar including President APJ Abdul Kalam. While every project that disturbs virgin land, would ensure that urban
one might argue that hyperopia has never been a virtue of our areas stay free of flooding while construction does not clog
polity and expecting them to invest so much and see such a or contaminate our storm systems. In the absence of a strong
gigantic project through to completion may be wishful thinking, policy to regulate and protect our water systems and the will
the solution should be driven by the fundamental right to life to act, we may end up contaminating this precious resource
guaranteed under our constitution. The project, if properly that we as a country have been blessed with.
planned and executed could kill two birds with one stone.
Vivek Menon, P.E., has been an advisor to various governments
Coming to the urban scenario, paying fourteen to forty rupees on public policy related to infrastructure and water management
for a sip of aqua addresses more of a fashion statement than a and is currently an infrastructure subcommittee member at the
fundamental necessity. “Mineral water or regular” from a white Center for infrastructure, Sustainable Transportation and Urban
gloved steward says it all about our urban water supply system. Planning (CiSTUP) at the Indian Institute of Science.
While we have looked to the River Cauvery to grant us the
elixir of life in Bangalore, we have ignored the huge potential
in our own backyards. The garden city (Bangalore) of lakes We had printed the following article by the above author
has been reduced to a city of cesspools, so is the story of most Sri. Vivek Menon in the last issue but a portion went missing
while designing. We are reprinting the same with my sincere
apologies to the author for the printing error.
Editor
Towards spending these resources is questionable. And that brings us to
a Better Tomorrow... the crux of the challenge; do we have a regulatory mechanism

to ensure that our valuable financial resources are well spent in
Regulating the Practice of Engineering
building for our future generations.
I
t did not have to take the loss of an innocent girl’s
As planners, designers, engineers and constructors our mandate
life for the engineering world to wake up to the crude
is to be the builders to the Nation. It is hence our responsibility in
reality of mediocrity in the practice of engineering. The
ensuring that the best practices come to bear on our infrastructure.
compound wall built by a local contractor in Bengaluru
Quality control, which is such an integral part of any effort, is very
for a government agency, came crashing down during a heavy
often neglected. The timeliness of the effort, referred to in engineering
downpour, claiming an 18 year old victim. While the judicial
parlance as a “Schedule” is never adhered to. The time value of
process plays out in delivering justice to the victims of the family,
money is a forgotten concept and most projects see huge cost
the engineering community is at a loss for answers, not as to
escalations and overruns. The cost of these misadventures is hence
what caused the collapse but how to prevent such mishaps in
borne by the exchequer or taxpayer ultimately. Without a mechanism
the future. While private players in the real estate space have
to affix responsibility or accountability, the result is an unplanned
chosen the best and brightest to plan, design and build their
product of poor quality delayed beyond expectations. That brings
edifices for them, what has suffered the wrath of incompetence
me to the next question. How does the rest of the world do it?
are works in the public domain. Most of us who have traveled
abroad have come back starry eyed and bewildered by the To answer that, I would like to cite the example of the system of
progress in the construction of civil infrastructure. Whether it is the engineering practice in America. The Engineering Practice Act, that
chunnel connecting England to the rest of Europe or the Big Dig came into being to regulate the practice of engineering and affix
in Boston, where all the ugly interchanges in downtown Boston responsibility and accountability has done a stellar job in ensuring
were taken underground to make way for green lung spaces, that works done in the public domain are par excellence. Under
we’ve all been amazed at the quality of workmanship and the the Act, only duly licensed persons may legally perform, or offer
adherence to the best practices in construction. to perform engineering services for the public. Furthermore, public
works must be designed and constructed under the direct supervision
Now zoom back to our very own Bengaluru. Other than the
of a licensed professional engineer. The terms “P.E.” or “professional
International airport that was built through a public private
engineer” can only be used by persons who are currently licensed
partnership, most of our modern public infrastructure is not even
and anyone who violates these parameters is subject to legal
worth a mention. The magic boxes, fondly referred to by the
penalties. To be eligible for a professional engineering license,
engineering community as “tragic boxes” or “match boxes”,
engineers must have achieved certain professional milestones. They
with built in obsolescence will make most civil engineers hang
must have earned an engineering education, performed certain levels
their heads in shame. Signal free corridors that are an unknown
of engineering work experience, and passed specific examinations.
concept for most urban arterials, collectors or distributors, in the
To keep their license current, engineers are required to complete a
rest of the world, are hailed here as the next best idea to sliced
certain number of continuing education credits annually.
bread. The Richmond road flyover, which for the longest time had
the dubious distinction of being the only flyover in the world with One need not look very far back to see that we, as a people, had
an intersection until recently, threatened to find its way into the the power to build monuments of uncompromising magnificence.
Guinness book of world records. Facts stated, so what’s new, Whether it is the temples of Hampi, the Krishna Raja Sagar Dam
one might ask. on the Kaveri or the Vidhana Soudha in Bengaluru, they stand tall
as marvels of our achievements in the field of civil engineering.
India is today growing at a brisk pace of close to ten percent
However, the new crop leaves much to be desired. When pride
year on year, with infrastructure spending exceeding over one
is lost in the quagmire of deceit, corruption and indifference, the
Lakh crores, by conservative estimates. Currently, the onus of
rule of law has to step up. In the absence of self enforcement,
planning, spending and monitoring the outcomes of this initiative
the only way to prevent degeneration of value systems is to raise
rests squarely with governmental bodies at the local, state and
the standard in the face of mediocrity. The key however, will be
central level. The apathy and indifference towards delivering
to regulate the practice without letting the evils of present day
a product that one can be proud of is palpable even to the
society such as corruption override our noble intentions. For that
untrained eye. The Jawaharlal Nehru National Urban Renewal
will only lead to a greater “License Raj”.
Mission (JNNURM) aimed at closing the disparities in spending
capabilities between various Metros and committed a sizeable Lest this initiative fall on deaf ears, the idea has been presented
chunk from the national exchequer to the state and local bodies. at one of India’s premier institutions with the hope of getting the
For a country that at one time was looked at as a third world best and the brightest to formulate the Act and enforce it in the
economy with foreign exchange reserves languishing at USD true spirit. Hopefully, this will someday help us restore the glory of
two billion, India has come a long way to becoming the fourth this halcyon nation that boasts some of the greatest engineering
largest economy in terms of purchasing power parity. The dearth marvels that mankind has ever known.
of financial resources is a thing of the past but the way we are
NEW BASE RATE
SYSTEM OF BANKS
- Rathnakar Hegde
one could sanction the
loan for lower price for
the preferred customer or
the corporate bodies and
retail customers may have
Editor’s Box to pay more for the same
All that we all wanted to know about Base Rate System
type of loans. In the base
is explained lucidly in this piece by one of the most
rate system, there will not
knowledgeable, dynamic and respected Bankers.
be much variance on the
loans.
B
However, the base rate
ACKGROUND. Why Benchmark Prime Lending system will not be applicable for the following type of loans:
Rate (BPLR or benchmark PLR) did not work? • Agricultural Loans
• Loans given to own employees
Before introducing the base rate system, banks used a rate
• Loans against deposit
system called Prime Lending Rate (PLR) to set their lending
• Export Credit
rates. The problem with this system was, banks manipulated
their PLR to a lower level to offer discounted lending rates for Base rate system is arrived at by taking into account, the cost
the borrowers. It may cause loss for banks if they offer loan of deposits and cost of keeping aside cash to meet CLR and
with much cheaper price. The real intention of the RBI is to SLR. It is convenient for banks to adjust the lending rates after
make banking system much stronger after the global financial the changes on policy rates by the RBI.
crisis.
The new “Base Rate” system
The PLR was introduced in 2003 to ensure that banks publish Due to these limitations, a new “base rate” system is being
their lending rates based on their true cost of funds. All lending implemented from 1st July 2010. This new framework would
was expected to be at or above the BPLR. This was a fair have two major benefits:
expectation, as you can’t expect a bank to lend below its cost 1. Banks would be required to revise the base rate every
of funds. However, over a period of time, competition forced quarter.
many banks to do exactly the opposite. 2. Banks would not be allowed to lend below the base rate
Banks stopped adjusting the BPLR when the interest rates went What happens to the existing loans?
down – therefore, the BPLR lost its relevance as a rate reflecting The Reserve Bank of India (RBI) has given out guidelines which
the cost of funds for banks. And when the RBI allowed lending say that customers of existing loans (based on BPLR) should
at below BPLR rates, the banks started giving out most of their be given an option to switch to the new base rate system
loans below the PLR / BPLR (also known as sub-PLR or sub-BPLR without any fee.
loans). In fact, the loans were priced as “BPLR minus 200 basis
Even for banks, maintaining two systems of PLR and base
points”! (That is, 2% less than the BPLR)
rate would be administratively difficult – so you can expect
Base rate system provides more transparency on setting the the banks to encourage
rates. Each bank has some criteria to set their base rates. Base you to shift to the
Rate System is for the banks to set a level of minimum interest base rate system.
rates charged while giving out loans. This Base Rate System But the golden
has many advantages over the older method of Prime Lending
Rate (PLR). One advantage is, in the Prime Lending Rate (PLR),
question is – will the rate of interest on your loan change if you The base rate will set the floor for interest rates on all types
switch? of loans. There would be very few exceptions. Staff loans,
loans under the differential interest rate scheme, advances
No, it won’t – only the method of calculating the rate would
against fixed deposits and a few other categories will be
change. And you would get a benefit immediately if the base
charged interest rates that are quite independent of the base
rate is revised downwards (remember – base rate needs to be
rate mechanism.
revised every quarter).
It is this near universal coverage coupled with the transparency
Example:
in its computation that is supposed to give the base rate system
Let’s say you have taken a floating rate home loan which is at
an edge over the BPLR (Bench mark prime lending rate). Will
BPLR minus 200 basis points. (2% less than the BPLR). Right
it deliver what the old system could not?
now, the BPLR is 12%, so your loan is at 10%.
Knowledgeable observers have pointed that the base rate is
As you would have observed, if the interest rates go down,
actually a resurrection of a system that was in vogue in the
the bank does not necessarily reduce the BPLR. So, even if
early 1990s. The Prime Lending Rate (PLR) system was diluted
the overall interest rates go down by 0.5%, your loan would
over time as many types of borrowers sought to be exempted
remain at 10%. Yes, it is unfair, but that’s the reality today.
from its review. By 2001 it had become just a reference rate.
When you change to the base rate system, the current rate for
The rate charged by banks had very little nexus with the PLR.
your loan would remain the same. So, if the bank’s base rate
In fact, a large proportions of loans have till recently been
is say 7.5%, your loan would be marked as “base rate plus
made at below PLR rates. Sub-PLR loans in India have very
250 basis points” (or, 2.5% above the base rate). So, there
little connection with loans of the same nomenclature that were
would be no immediate change for you.
wildly popular in the U.S. Risky lending on a massive scale to
However – and this is important – what would change is how less than credit worthy borrowers was one of the factors that
a change in interest rate is passed on to you. Since banks brought about the collapse of the financial sector in the U.S.
have to revise the base rate every quarter, any change in
Base Rate shall include all those elements of the lending rates
the interest rate – either downwards or upwards – would be
that are common across all categories of borrowers. While
passed on to you in a maximum of 3 months.
each bank may decide its own Base Rate, some of the criteria
This is a big leap forward, considering the fact that till now; that could go into the determination of the Base Rate are:
most floating rate loan customers have only seen an upward
1. Cost of deposits
movement in their interest rates.
2. Adjustment for negative carry in respect of CRR and
Transparency on Base Rate System SLR.
Another advantage of base rate system is transparency on 3. Unallocatable overhead cost for banks such as aggregate
calculation method to arrive at the base rates. Every bank has employee compensation relating to administrative functions
to declare to the public how they have calculated the base in corporate office, directors’ and auditors’ fees, legal
rates. For example, SBI has calculated the base rate by taking and premises expenses, depreciation, cost of printing
into account past six month deposits. and stationery, expenses incurred on communication and
advertising, IT spending, and cost incurred towards deposit
Under the new system, banks have been asked by the RBI to
insurance
ensure uniformity and transparency in calculating the base
4. Profit margin.
rate, which is the floor rate for all loans.
5. Return on Net Worth
Each bank will calculate its own base rate taking into account
the cost of funds, possible loss incurred in complying with
the reserve requirements, administrative costs and the profit
element. The actual lending rate to the borrower will be
higher.
To the base rate will be added borrower-specific charges,

product specific operating costs, and premium on account of
credit risks and tenure.
Base Rates are different for different banks. The following table presents the base rates announced for some of the Leading Banks.
Bank Name Base Rate%

Calculation of Final Rate of Interest
STATE BANK OF INDIA 7.50
Every bank calculates their Final Rate of Interest with some
HDFC 7.25
points in it. Amongst all those points “Base Rate” plays
ICICI 7.50 Vital Role. Base rate is different for ‘Rated’ & “Non-Rated”
organizations. The calculation is as under:
PUNJAB NATIONAL BANK 8.00
UNION BANK OF INDIA 8.00 Base Rate (As per Bank) 8.00%
CENTRAL BANK OF INDIA 8.00 Add: Risk Premium 0.15
AXIS BANK 7.50

Tenor Premium 0.25
ALLAHABAD BANK 8.00
Product Cost 1.75
ANDHRA BANK 8.25
Final Rate of Interest 10.15%
BANK OF BARODA 8.00
Risk Premium is calculated on various ratings of the said
BANK OF INDIA 8.00
organization. It represents opportunity cost of the regulatory
BANK OF MAHARASHTRA 8.25 capital allocated against the loan offered and expected
CANARA BANK 8.00 loss due to the risk of default. It considers of Rating of Bank,
External ratings. Incase there is any difference between the
CORPORATION BANK 7.75
internal and external rating, the risk premium as applicable
DENA BANK 8.25 to internal rating only will be reckoned for arriving at the final
INDIAN BANK 8.00 rate of interest.
INDIAN OVERSEAS BANK 8.25 Tenor premium represents cost of outlay of funds for a specified
ORIENTAL BANK OF COMMERCE 8.00 tenor. Premium is also decided by the concerned banks.
SYNDICATE BANK 8.25 Product cost represents allocable facility handling cost incurred
at branch level.
UCO BANK 8.00
VIJAYA BANK 8.25 CONCLUSION:
IDBI BANK 8.00 Whether Base Rate is beneficial?
Why do we need a base / benchmark rate as a reference? Base Rate is decided by Banks. Also Base Rate is subject
to change at quarterly intervals. Also, it goes hand in hand
Each bank would have a different cost for the funds – in simple
with different terms like Risk Premium, Tenor Premium and
words, each bank would pay different rate of interest to its
Product Costs. Base Rate is certainly beneficial to strong
depositors. For example, State Bank of India (SBI) might pay
companies and for those who maintain high financial
6% interest on a 1 year FD, whereas a cooperative bank might
and credit discipline who will have the natural strength to
pay 9% for the same tenure.
negotiate the cost of borrowing
Therefore, the rate at which the banks lend the money would and obtain loans at base or
also be different for different banks. But how would the public slightly above base rate.
know what the normal lending rate of the bank is?

Mr. Rathnakar Hegde is
This is the reason why a reference rate is required. It is a the former Executive
rate that is derived based on the actual cost of funds to the Director of Union Bank
bank. This is the rate based on which all loans of a bank are of India.
supposed to be priced.
Office real estate -
Creating
symbiotic
relationships
- Akash Deep Jyoti
The building should
have a high degree of
adaptability to ensure that
it not only meets occupiers’
Editor’s Box current requirements but
Article deals with the expectations of an occupier and
also future needs. The
investor from the Developer of a commercial building. Simple
business requirements
language without jargons is the highlight of this writing.
can change over time
D
due to management
evelopers, occupiers and investors are three
reorganisation, personnel
critical components of the office real estate
shifts, changes in business
segment. While developers promote the property
models, or the advent of technological innovation. Occupiers
and give it on lease, occupiers use and maintain
will want to retain flexibility to ensure alternative ways of utilising
it, and investors fund it for maximum returns. It is important
building space. Adaptability in the building will ensure a long,
that office property provide sustainable returns to occupiers, if
useful life for it, and maximise returns on initial investment.
developers are to ensure maximum occupancy, and investors can
maximise returns. In this opinion piece, we seek to understand The building should have high efficiency in terms of space and
what the occupier expects from office property. energy. Space efficiency implies optimal utilisation of horizontal
and vertical areas. Energy efficiency means optimal utilisation
The occupier’s primary expectation from an office building is
of power, and maximum use of natural light and heat. It can be
good quality construction at a reasonable cost, and within the
achieved through adoption of bioclimatic architectural principles
targeted timeline. Construction quality not only means structural
responsive to the climate of the particular location, use of
safety against natural disasters, but also usage of innovative
construction materials with low embodied energy, incorporation
construction materials and technologies. The building should
of efficient structural design and effective utilisation of renewable
be resilient to extreme environmental conditions, earthquakes,
energy sources to power the building. The individualised
floods and other catastrophes. Construction materials and
climate controls should permit users to set their own, localised
technologies should ensure structural resilience against cracks
temperature, ventilation rate, and air movement preferences.
and damages. Occupiers will wish to ensure that the building
facilitates smooth business operations at a maximum value for The occupier expects the building to be ‘intelligent’ and well-
money. If the building is still under construction, occupiers will integrated. It should have a superior building management system
expect it to be completed and handed over on time to ensure with tightly integrated mechanical as well as electrical systems
that their overall business plans are not affected. to enable control of the building’s security, high-speed networks
and power operations. It should deploy energy-saving controls Finally, the building should have high sustainability levels in
such as automatic switching-off of lights and air-conditioners in terms of environmental friendliness and ecological harmony.
vacant rooms through occupancy sensors. The security of the Most ongoing office building projects in India now target
green building certification in this regard. The main objectives
building should be ensured through a card-access system and
of sustainable design are to avoid resource depletion of
sensor. The building should have a well-distributed, robust, and
energy, water, and materials; prevent adverse environmental
flexible IT infrastructure, which allows technological access in
impact; and create an environment that facilitates life that is
virtually the entire space.
comfortable, safe, and productive.
The design of the building should ensure good light, In other words, developers of office buildings need to be
ventilation and natural environment. The building should receptive to occupiers’ needs, and strive to create buildings
either provide a view of nature to occupants or an inner that cater to the occupiers’ requirements. The extent to which
courtyard with a view to nature. This would definitely developers are receptive to occupiers’ interests, and maximise
improve the employees’ concentration, efficiency and returns for investors will be key determinants of demand and
health. The acoustics of the building must be designed pricing of office buildings.
and integrated with the other architectural aspects and Mr. Akash Deep Jyoti, a realty expert with 15 years’
furnishings of the office. experience, is Head - Ratings, CRISIL Ltd
CREDAI Bengal
MABA and NABC 2010

(Property Exhibition in U.S.A)
F
or the first time this year there was an 2010 at Atlantic City, Convention Centre U.S.
Exclusive “Indian Real Estate Pavilion”
CREDAI Bengal pavilion made a mark at MABA and NABC
by CREDAI Bengal in Banga Mela 2010
EVE N T
2010 since this was also the first time proper stalls were
(MABA) from July 2nd - 4th, 2010 at
made for real estate pavilion which was standing out in
Sheraton Music City Hotel, Nashville, Tennessee, USA
the large exhibition area of the auditorium
and Banga Sammelan 2010 (NABC) from July 9th - 11th,
Report on ‘Implication of Service Tax on

Real Estate Industry’ the Central Government in the current year’s union
budget.
T
he Programme, Events and Fellowship
Committee of CREDAI Bengal had The session had a large attendance and the interaction
organized an interactive session on between ‘Ernst & Young’ and the members was highly
‘Implication of Service enlightening.
Tax on Real Estate Industry’ by Ernst &
Young on Thursday, 19th August 2010
at Bengal Club for CREDAI Bengal
members.
The speakers from ‘Ernst & Young’

were as follows:
Mr. Bhaskar Thakkar: Associate

Director
Mr. Amit Bhagat: Senior Manager
The discussion was about the various

issues on Service Tax imposed by
65
Cover Story
Improving Urban Housing

How do we
F
indings from two recent government surveys offer
glimpses into the overall urban housing scenario
in the nation, with special reference to slums.
strategize to
However, far more detailed city specific data is
required if private real estate developers are to provide Homes
prepare strategies to partner with local governments or non-
profit organizations to prepare projects that build homes for
lower income groups. Mukta Naik throws up some ideas on
for All
if and whether this is an opportunity for developers. - Mukta Naik
What with the Adarsh Society and the housing finance scam, Financial indicators
housing has got more than its share of print column space • 63% of urban households
this past fortnight. What that tells us, besides the politics and live on owned premises
scandal, is that housing gets precious little media exposure and 30% of urban
otherwise compared to the huge part housing stocks and household live in hired
prices play in the evaluation of economic conditions in Europe dwellings. In fact, 5% of
and the United States. In fact, using housing as a barometer urban households reside
to gauge economic growth and predict economic trends is a in their employers’
sure sign of a mature economy. premises!
In India, of course, the scenario is vastly different. Politically, • 92% of urban households
we are not a federal system; yet states can choose to adopt, live in pucca structures,
adapt and sometime ignore the policy decisions of the central 6% live in semi-pucca
government. The housing scenario is therefore very different structures and 2% live
from state to state, depending on the pressure on urban in katcha structures.
centres, the stability of the government and the buying power • Average monthly rent of rented dwellings in urban areas
of the population. is Rs 1149 as opposed to Rs 590 in rural areas.
Its clear that there is an acute shortage of housing in India’s The percentage of home ownership gives an idea of the
urban centres (24.7 million, by government estimates) and tremendous pent-up demand in urban markets. If detailed
that the majority of this shortage lies in the economically data regarding the distribution of this data across specific
weaker and low-income group sections. It is also clear that it cities were available, it would enable the creation of detailed
is impossible to address the problem of urban housing without market studies to facilitate the housing industry.
more city-specific data and a detailed assessments of needs,
not only for the dwelling units per se, but about the conditions While the construction of homes appears to be overall good
required to live a decent life—amenities like water, power, in the survey, this belies the large populations that live in
sanitation, transport, access, health facilities, education and slums that are largely impermanent structures highly prone to
so on and so forth. Two recent government studies shed a collapse in disasters like a fire, flood or earthquake. The data
considerable amount of light in this direction. seems out of sync with reality.
NSSO findings Health-related indicators

• Urban households have a per capita floor area of 9.45 sq m and
The National Sample Survey Office (NSSO) has recently
• Nearly 13% of urban households had a per capita floor
released Report no. 535 titled ‘Housing Condition and
area of over 20 sq m.
Amenities in India, 2008-2009’ based on the household
• 6% of urban households have katcha drainage, 15% have
surveys conducted across the nation in its 65th round of data
no drainage!
collection. Some of the findings pertaining to India’s urban
• 21% of urban households have no garbage disposal facility.
areas are notable in the context of housing. Particularly, these
• 6% of urban households have no direct opening to a road
results give considerable insight into the quality of life offered
• 75% of urban households do not have access to drinking
by India’s urban centres to the citizens.
water within their premises
While the per capita availability of space is generous, the rates show relatively modest slum populations.
truth is that the disparity between high income and low-income
Clearly, the factors that determine the growth of slums are
households is increasing year on year. The conditions of
varied and complex. The next step would be to arrive at city-
overcrowding in slums and squatter settlements continues to
specific estimates that would help the planners as well as private
impact the health of the city’s poorest residents and its base
developers interested in partnering with local governments to
level workforce.
plan their strategies.
The conditions for drainage and garbage collection need
drastic investments into the overall physical infrastructure of Is there an opportunity for developers here?
India’s urban areas. While these have been facilitated by At present, private sector real estate developers are focusing on
government schemes like the Jawaharlal Nehru National the affordable housing segment, which largely addressed the
Urban Renewal Mission (JNNURM), these upgrades and the needs of the middle class in Indian cities. The determinants of
long-term operations and maintenance (O&M) of the city’s this type of housing is the cost of land, construction technology,
infrastructure require cities to invite private sector investment, materials used, density and house size and design. With
participation and consequent benefits. consumers becoming savvier, developers are continuously
challenged to be able to provide decent, aesthetically pleasing
Construction-related indicators homes at affordable prices.
• 4% of urban households took up some form of home
However, developers are yet to en-masse conquer the last
improvement/construction during the 365 days preceding
bastion for urban housing—housing for the urban poor. This
the survey.
means that, in an ideal situation, developers should be able to
• Average cost per completed activity was Rs 58,000 in
partner with the local government or non-profit organizations
urban areas.
in specific cities to prepare projects that provide homes that
• 14% of these constructions related to a new building
are viable alternatives to slum dwellers.
• 25% of these were financed from non-institutional entities,
while 15% were financed from institutional agencies Is this a possibility? In the current frame of thinking, probably
not. But with the pressure of meeting (or at least appearing to
Both the high cost of construction, considering most of
meet) the Millenium Development Goals (MDGs) set down by
these were repair or improvement jobs, as well as the high
the UN and to which India is also a signatory, the government
percentage of dependence on informal sources of credit are
is waking up the fact that addressing the needs of the urban
alarming. They point to the unorganised situation of credit
poor is a vital necessity if we are to avoid political, economic
and construction in urban India.
and diplomatic disaster!
Findings of the slum committee
Recognising that the first hurdle in truly addressing the
Committee of Slum Statistics/Census has been set up by the
Ministry of Housing and Urban Poverty Alleviation.
The report sums up the data collected by the Registrar General
of India (RGI) within the 2001 Census, NSSO and UN and
then goes on to make its own estimates.
Slum population, as per the RGI, constitutes 5.1 % of the
country’s total population and 18.5% of the urban population
of India. In the 1743 cities studies, 52.4 million people living
in 10.2 million households lived in slums. However, the UN
pegs India’s slum population to be about 158.42 million
people. NSSO reported yet another figure. The discrepancy
in data is due to different definitions of slums used by all three
organisations. Some of the fallouts of the lack of data has
been disproportionate allocation of funds in JNNURM’s sub-
missions. Clearly there was a need for detailed and coherent
data using the same definition across the country and the
above-named committee was set up.
However, there is value in the fact that actual survey-based slum
data was collected in the 2001 Census. Using appropriate
statistical techniques and based on Census and NSSO
data, the committee has come up with an estimate of slum
populations and the projections for years ahead.
Unsurprisingly, the states of Maharashtra and Uttar Pradesh
are estimated to have the largest slum populations (18,151,071
and 10,878,336 respectively) for the year 2011. Tamil Nadu
(8,644,892), West Bengal (8,546,755), Andhra Pradesh
(8,188,022) and Madhya Pradesh (6,393,040) follow suit.
Large states like Bihar and Rajasthan with lower urbanization
To this end, the Rajiv Awas Yojana (RAY) is being rolled out and • Is this an opportunity that suits the way your organization
several other inititiaves are in the offing. However, serious though the functions?
government may be addressing this monumental task, the truth is that • Can you restructure your organization’s DNA to work on
the solutions lie in empowering local governments in several ways. a low margin and high volumes game?
• Do you have access to the right construction and project
First, local government need to have the funds to invest in such
management technologies?
projects. Then, they must be willing to partner with private
• Are you willing to invest in the R&D required to customize
sector players by putting on the table the most expensive
the technology for Indian conditions and more importantly
resources, the land. Third, they must also be willing to provide
project-specific factors?
incentives like reduction of taxes and duties and fast-track
• Are you willing to invest in planning and design innovations
approvals to these priority projects. Last, and most difficult,
that are cutting edge?
they must be in the frame of mind that the developer is here
• Does your organization have the human resources required
to do business and not as a philanthropic gesture. Therefore,
to partner and work with government and NGOs?
the business model must also permit the developer to make
• Are you willing to risk a new business model?
profits—in this context low profits per unit but large-scale
projects should work. Happy pondering!
Strategy for developers: Points to ponder Mukta Naik is an architect and urban planner. She heads the
There are several areas that a developer organization needs to planning research and advisory practice at the Institute for
be sure about before joining the bandwagon. Here are some Competitiveness. Her interests centre on housing, equitable
indicative questions that could help think through whether this
development and policy.
opportunity is right for your organization.
CREDAI – TAMIL NADU
CREDAI Tamil Nadu & Habitat for Humanity
C
redai Tamil Nadu had as a CSR Initiative alongside poor families and thus giving hope and lending
joined hands with Habitat for Humanity an the sense of solidarity to the cause, our Members did just
NGO concentrating on providing decent that. By moving out of their comfort zone for a worthy cause
and affordable shelter to the needy and TN Members beginning with the President, Secretary and
had offered to sponsor 300 such units at 5 lakhs each Vice President National and other EC Members leading the
by inviting its Members to come forward and sponsor at way, literally donned the hard hats and worked alongside
least 5 units each. families building homes around Thiruvallur giving the much
CSR
needed hope to around 300 families in that region.

Following this initiative and having embraced this
opportunity with a spirit of compassion it only seemed The satisfaction and gratitude felt and expressed by the
befitting that on the occasion of World Habitat Day on villagers and inhabitants of Thiruvallur District provided
October 4th ( as recognized as by the United Nations as Credai TN Members with the feeling gratification that
a day of reflection on the basic right to adequate shelter comes out of giving back to society by way of acting
for all and of the world’s collective responsibility for the on a tangible social responsibility by demonstrating in
future of the world habitat ), which marked the beginning actions and service its collective commitment to the shelter
of a week to advocate and educate the importance and requirements of the less priviledged in the State especially
the need for affordable housing with adequate sanitation when juxtaposed with the booming Real Estate Industry.
for the marginalized, that Credai TN do something
noteworthy to promote the cause with the theme being
“Shelter for all’
Habitat for Humanity called for a unique Partnership with

Credai TN Members in a drive to address the Collective
Responsibility of key Members/Stakeholders of the
Industry in creating an equitable habitat where simple,
safe and affordable shelter is made possible for approx.
315 million Indians who lack the means to a decent
home. In response to this appeal to MDs and CEOs of
our Member Organizations to participate in this drive of
a day of grass roots house building activity by working
NSDC- BANGALORE INITIATIVE - Suresh Hari
W
ith a stabilizing economy and upward are on by a few training
movement in demand, the Construction institutions over a long
Industry is seeing rapid and phenomenal period of time (NICMAR,
growth across the country. The challenge INSTRUCT etc.,) who have
today for the Industry is shortage of trained labour with good taken more of advance
skill. The challenge of achieving quality work in specified timeline level training in class
has to be addressed by the Industry on a war footing. room like situation. Since
workers skill development
NSDC is a first of its kind Public Private Partnership in India
needs site interface, it is
that facilitates skill development. A large part of its efforts are
imperative the training
directed at skill development programmes in the unorganized
goes to their door steps.
sector. NSDC acts as a catalyst in skill development by
Also to have a successful
providing viability gap funding to enterprises, companies and
long lasting effort in
organizations that provide skill training. It will also develop
achieving the desired results, the economy of operation is vital.
appropriate models to enhance, support and coordinate
Hence at the start of the programme, large sites with sizable
private sector initiatives.
workforce involved, will be addressed. Smaller sites and few
It’s the privilege of CREDAI that our Chairman Mr. Kumar workers needing training need to be addressed immediately
Gera, is one of the board members of NSDC. Ever since its on getting the confidence of start. Model of small groups will
inception, Sri Kumar Gera has been keen that Bangalore be worked out once experience input is analyzed
should play a vital role in taking forward the NSDC initiative.
Some of the related fields of training to be imparted to start
And as such CREDAI Karnataka has taken the step forward
with are:
taking advantage of the NSDC initiative and has embarked on
1. Masonry (all related work), Plastering and Tiling.
the task of undertaking skill development to workers connected
2. Plumbing and Sanitation.
with construction Industry.
3. Carpentry
The inspiration for the scheme of things is from CREDAI 4. Site keeping and supervision/management
Pune spearheaded by Mr. Ranjit Naiknavare and persistent 5. Hands on experience to fresh graduates / diploma holders
persuasion by our Chairman Mr. Kumar Gera. prior to employment
Potentially, the target group for skill development comprises all The entire training programme will encompass Safety and
those in the labour force, including those entering the labour basic communication skills.
market for the first time (12.8 million annually), those employed
Since this training can be of two pronged, the just out
in the organized sector (26.0 million) and those working in the
Engineering / Diploma graduates from Civil and connected
unorganized sector (433 million) in 2004-05. The current capacity
discipline will also be trained hands on at work situation
of the skill development programs is 3.1 million. India has set a
along with unskilled workers to take up next level of activity
target of providing skill to 500 million people by 2022.
which is not in the framework of NSDC but an independent
Even before the formation of NSDC, CREDAI Karnataka had initiative to be taken up by CREDAI Karnataka. Two goals can
planned similar activity when Mr.Balakrishna Hegde was be achieved through this
the President and to this end an approach was made to the
1- Improving the working condition of existing labor
Government of Karnataka for the allotment of required land
along with enhanced efficiency
to house the Training Centre. Again I should place on record
my appreciation to Mr. Balakrishna Hegde for initiating the 2- Training and finding fresh engineers for productive
process and also to Mr. Raj Menda and Mr. Sushil Mantri employment
for taking the effort forward in addressing this very essential
To get better result and sustainable programme, pilot projects
requirement of Construction Industry.
at few large construction sites are planned. The training needs
Given the nature of Industry - mostly unorganized with poor to be 100% at site, since the office interface of skilled workers
affordability of the workers to pay for the training (foregoing is a corollary. To create stimulating situations, mobile models
their daily wages) most of the development needs to be will be created on the lines of ‘Mobile demo models’ on
imparted at convenient time and location. Similar efforts wheels. This vehicle will be taken to different sites depending
on need and situation. The training will be date specific and this programme. They need to relieve workers to enable skill
cannot run for months to start with. development and also provide them with the wages lost. Site
support for conducting the course is a must.
Interfacing with other similar associations is vital for the
successful implementation of the programme. BAI Bangalore Partnership with other organizations like state governments,
center at present has specific programmes to train fresh especially ‘Cess Board’ will make the programme very effective.
graduates and certificates are issued under the authority of The cess collection utilization is one of the nagging issues faced
VTU (Visweswaraya Technological University, the authority by the Board. An effective interface with them will enable part
who controls all Engineering colleges in Karnataka). These funding of the programmes. Karnataka is one of the early States
graduates, once trained are an asset to any construction firm to have initiated the Labour Cess charges and huge corpus is
who look for effective engineers who not only takes care of available. Though Tackling Government Funding has its own
technical aspects, but also the administrative part. Partnership limitation, a prudent mix of funds and involvement from them
for the execution of project with these similar Associations will will enable more authenticity to the Programmes.
enable greater success and reach.
Initially CREDAI Karnataka will allot budget for the programme
We will look at advanced training once the pilot project takes as CSR initiative, but huge outflow will be required once the
shape. CREDAI Karnataka needs to procure suitable land for programme takes shape. Detailed costing will be worked
putting up such a center for class room benefit and training out once the various parameters are put in place. When
different disciplines of labor force. CREDAI Karnataka launches the full fledged programme
with established center for training, etc., the rough Budgetary
Even though NSDC contemplates basic Skill development,
Estimate of around Rs.15 crores will be tapped through
we will embark on advanced programmes once the needed
NSDC.
experience is achieved.
The programmes will be implemented through identified
1. Grade III as Trainee Worker :- 3 months course
agencies who have specialized teams handling similar efforts.
2. Grade II as Junior skilled worker : 6 months course
Due discussions have been initiated.
3. Grade I as Senior skilled worker: short term advance
course with greater focus for individuals already qualified or The pilot programme will take shape within 3 months.
one who has gone through skill development.
S. Suresh Hari, Former Secretary, CREDAI Karnataka and
Employers of workers will be made to play a vital part in currently, Chairman- Skill Development Cell
CREDAI KOCHI
CSR INITIATIVE OF CREDAI KOCHI
A
s part of the CSR activities, CREDAI Kochi Clean City Movement for 15 years.
formed a nodal agency called CREDAI Clean
Specialty: - A World class toilet facility is
City Movement to take up social projects. The
today available for Ladies, Gents & physically
movement undertakes projects for the benefit
handicapped.
of the city and its citizens. CREDAI Kochi’s objective is to
identify areas where its assistance will be helpful to improve A nominal fee of Rs.2/- will be collected from the
CSR
up keep of city with the involvement of civic authorities. As a users while there is no entrance fee for physically
part of total sanitation campaign of Dist. Administration, the handicapped persons.
Dist. Collector requested CREDAI Kochi to
construct and maintain a Public toilet at
the Collectorate. Space was allotted in the
Collectorate complex at Kochi.
BPCL Kochi Refinery and CREDAI Kochi

jointly met the cost of Rs.15 lakhs for
construction of the toilet complex and
the Collector signed the agreement with
CREDAI Kochi for maintenance of the
toilet under the management of CREDAI
Are you Future-Ready?
5 Steps to Building an
“Information-Edge” In Real Estate
- Prashant Das - Divyanshu Sharma
Editor’s Box
This piece tells us the criticality of the most important tool
– the “data” – where to get it, how to analyse it and how
to use it.
R
eal estate development is an evolutionary
process; so no two developments are exactly
alike. Perhaps, this is what led some developers
to believe that it is better to be “lucky” than to
be “good” when it comes to being successful in the business.
Gone are those days, though. “Strategy” is picking up as
a buzz word in Indian real estate with globally acclaimed
business schools and groups organizing workshops and Any strategic improvements would be contingent upon our
crash courses in India on these lines. It is a whole new world understanding of the current state. So, our research team recently
today, especially after the recent global economic crisis. conducted a pilot study on a sample of small and medium sized
The world looks forward to opportunities in India as do we real estate developers across India to understand their business
Indians in the rest of the world. That has clear implications on processes. One of the findings of the study was that Indian
Indian developers. Real estate is local and local developers, developers need to strengthen their “Information-Edge”.
definitely, have advantages over others. But close your eyes
In other words, one of the critical strategies to remain
for a moment and ask yourself: is this advantage perpetual?
competitive in the market is to understand that “Knowledge
If you are a realist, you will see competition knocking at your
is King”. Obviously, it has to be the knowledge that is
door sooner than you would want it to. They will leave you
exclusive to your own firm. The question is: how to acquire that
with two options: wait for your “lucky” moment or become
knowledge? “Create it” would be our answer if you are serious
“better” than the others in the market.
about differentiating yourself. One of the biggest sources of
In the development business, today’s successfulness does not knowledge is information. And anyone can tell: Information is
have much bearing on whether you are going to be successful made of data. Evidently, data remains focal to the remaining
tomorrow. The business landscape of this article. It is a misconception that dealing with data is an
is changing and you must adapt
to it. Professor Michael Porter of
Harvard Business school said
of developers a long time ago:
“…past modes of behavior
probably will not carry you
through the next decade. The
questions are how you think
about the question of strategy
for your business and how do
you do that in a constructive
way…no matter where you are
operating, you are going to have
to decide exactly how your company is going to compete and irrelevant activity for small and medium sized developer firms.
how you are going to position your company to be a superior In fact, these are the firms that would benefit the most from this
performer…” The message is clear: to remain competitive with competency. In the context of Indian real estate developers,
increasingly more sophisticated competitors in the market, here are the five steps that we recommend:
Indian developers need to adopt the best practices of real
1. Collect: Secondary data (data collected by others) from
estate development, an area where India lacks a formal
government agencies is available abundantly in India; and at
knowledge system.
no cost. You need an explorer’s eye to find them, though. The the initial pitch. Knowing this will enable you to optimize your
publicly available data is actually meant for your use; and they resources and develop efficient strategies. As a thumb rule,
have great application in real estate (and, for that matter, any you would need 30-50 data points (number of prospects
other business) beyond academics and policy makers. Moreover, from which you will collect your data) for each such factor
the argument that public data is usually “old” and, therefore, you plan to examine. Also, if you often fail to price your
“useless” pertaining to your real estate project is only partially products appropriately (may be, because you do not find a
true, as we remain obsessed with census data. We often fail to close comparable property), such an analysis will become
explore the sampled survey data released by numerous central your crystal ball for putting the prices on the properties which
and state government agencies. Remember, census and survey you develop that truly “work”. Developers across the globe
usually refer to similar but inherently different methods of collecting are known to use “hedonic modeling” in order to optimally
data. In census, the attempt is to collect the complete data of the price the properties they develop or acquire. Remember,
population whereas a survey typically attempts to collect the data these analyses will give you insights that you would not find
of a smaller sample that is carefully chosen to represent the overall in books. Books are aimed at covering “broad” spectrums in
population. Due to this reason, it is far less difficult to collect more contrast to your own projects that, perhaps, serve a niche.
up-to-date data through sampled surveys. Explore some of these
4. Learn: OK! This is where you need some serious work.
sources and you would be surprised at the availability of recent
Well designed datasets (primary or secondary) empower
and relevant data.
you with unparalleled capacity to optimize your investments,
2. Create: While an awareness of the secondary data sources both in terms of time and money. But analysis methods come
will provide you an advantage of a relatively “inefficient” Indian in all colors, sizes and shapes. Moreover, they need some
understanding of statistical methods and software tools. Do
Some sources of latest survey data:
not let these words scare you! If you are a developer, you are
Ministry of Statistics: http://mospi.nic.in
smart enough to learn what it takes to become a developer.
Economic Survey: http://indiabudget.nic.in/ Remember, you always have an option to delegate this task
Redix for multiple cities: http://nhb.org.in/Residex to someone else in your firm (or simply hire an expert!). Yet,
Andhra Pradesh: http://www.apdes.ap.gov.in/ interpreting the results would, again, require some basic
Maharastra: http://mahades.maharashtra.gov.in understanding. Consider taking a crash course in “Business
Analysis” which includes basic regression. SPSS, Minitab, JMP
Tamilnadu: http://www.tn.gov.in/deptst/
are some popular, user friendly software for statistical analysis;
and you may learn some basics from Professor Google. Some
real estate markets, creating your own, “primary” data would
free software are available too (visit: http://www.realism.in/
enable you with an unparalleled information-edge. Take it easy,
stat); but they may not be as intuitive. In fact, MS Excel has
you can do it in-house with some planning! All you need is some
a wide range of in-built functions, although it is usually not a
brain storming. If you can afford, seek a few hours of expert
top choice for regression-like analyses. In future, as your firm
advice (preferably, from a quantitative researcher who loves
grows, you may decide to implement Customer Relationship
statistical modeling). Review your touch points (opportunities to
Management (CRM) packages. With your understanding of
interact with your clients/end users) and make a note of how you
the potentials of data, you will be far better equipped to exploit
interface with your customers. They need not be only the prospects
your investments in CRM-like solutions.
that you were able to convert. In fact, collecting data about the
ones that you could not convert into your customers would be 5. Sell: Achieving the “Information-Edge” means a lot more to
more insightful. Now, design a well-laid out questionnaire that you than developing insights for business strategies. A deeper
helps you create customer “profiles” with demographic data, understanding of the dynamics of real estate development
preferences, etc. Collect them through a website or paper-based business, customers and product strategies set you apart as
survey. Later, add some observations from your own side; for “experts”. Your firm can showcase its “knowledge” through
example, did they really make the purchase, what price was impressive white papers and corporate presentations at
negotiated upon, and so on. Do not forget to digitize your data reputed forums. You add weight to your brand image which
in a spreadsheet. may help you build relationships for collaborative projects and
win large-scale partners who might be seeking to leverage on
3. Analyze: Most analysts stop after calculating statistics
your capabilities for upcoming projects in the region.
(mean, median, etc). However, with the same set of data,
possibly, they would have been able to draw numerous Divyanshu Sharma - Partner, Realism.IN
conclusions critical to your business strategies. As your data (a research & education firm focused on Indian real estate)
set gets richer with time, you can conduct more sophisticated
analyses with your data. For example, such analyses may Prashant Das - Head of Research, Realism.IN & Editor, India
help you ascertain which factor is more critical to a prospect’s China America Institute, Atlanta
decision to buy from your firm: the difference between quoted
and offered price or the method used by your sales force for
Between
a rock
a soft place
&
The government has a two-pronged approach to housing
sector, one that of preventing bubbles, which ends up
strangulating the industry and second, complete apathy
towards formulating policies to help meet the burgeoning
demand.
T
he latest video on youtube.com (http://www.
yout ub e. c om / wa tch ? v = Ps 0 DS i h g g io ) on - Anil Parameswaran Nair
constructing a 15-storey building in six days
than any other industry.
in Shanghai is probably the most forwarded
The central bank capped
link among the real estate professionals today. It would be
the loan-to-value ratio for
instructive if critics of teaser loans and 10-90 loan schemes
housing loan exposure at
saw it.
80 per cent, even while
The central bank of India in early November tightened the increasing risk weightage
provisions for housing loans which singularly created a for residential housing
dent in the real estate growth story. The higher provisioning loans worth Rs75-lakh or
requirement for teaser loan rates will, in all probability, affect more by 125 per cent.
the sector in the short term.

The RBI in its combined
The motive behind the move by Reserve Bank of India (RBI) wisdom raised the
is essentially to prevent excessive leveraging by banks. Most standard asset provisioning by commercial banks for teaser
market watchers are of the view that if the RBI starts to take loans to 2 per cent from 0.4 per cent. This step seems wholly
such punitive action against financial instruments brought out unnecessary in view of the sector’s struggle to come out of
by innovative thinking, the real estate sector as a whole will the slump seen a year ago. Even stock markets gave RBI a
suffer. It is true that the regulators have held the industry in thumbs-down when the markets tanked after its decision mostly
good stead in the past and have prevented market bubbles, because of the ‘negative surprise’.
but the over-caution might be uncalled for.

In other words, for all outstanding teaser loans the banks will
The fact of the matter is that asset prices might be rising have to make a one-time additional standard provisioning of
inexorably in some markets though in others it is more 1.6 per cent. Also, in future they will need to take into account
sobering, mostly due to demand. A market like Goa has these additional standard provisioning norms if they continue
seen stabilised pricing for the last decade, even during the with the teaser loan schemes.
last economic downturn, so much so that asset buyers and

It is not just the developers and intermediaries which are cut up
investors have increasingly flocked to these markets in tandem
with the decision of the central bank. Commercial banks which
with the construction activity.
have been forced to look the other way when developers seek
“The asset prices will not be brought down by simplistic moves debt financing, have also expressed their chagrin at measures
like higher provisioning requirements for loans in a demand-led like tightening provisions for loans.
economy. The government has to increase FSI across the board

In the mid-term review of monetary policy, RBI raised provisions
and improve infrastructure development to control prices”, said
for standard assets of teaser loans five fold. The ostensible
a leading NCR-based real estate developer during a recent
reason is that last time the RBI tried to control teaser loans the
conference on hotels and organised retail in Mumbai.
banks conveniently bypassed it and continued to selective offer
The regulators have an uncanny detailing of the property sector teaser loans. This is not to say that all such loans are above
board, but to club them all in one basket is a mistake that RBI and bereft of investor-buyers, will be adversely affected. In
commits with impunity. the higher end of the market, which includes even affordable
homes in some metro cities and luxury in smaller cities, the
The higher provisioning will jack up cost of funds for banks and
new regulation will not mean any thing.
discourage them from aggressively pushing for teaser loans.
The reason for such tight measures is that such loans affect There is little speculation in the higher end of the market even
the quality of assets and chances of defaults by borrowers are today and hence the increase in risk weightage will dampen
high. The RBI might also be playing into the SBI versus HDFC the 10-90 schemes popular in cities like Mumbai where the
game being played out in public for a long time now. down payment is broken into two parts – 10 per cent while
booking and 5 per cent while taking possession.
The home loan default for SBI, for instance, is known to be
about 3 per cent and that can be considered an industry But most big developers any where in the country are not quite
average. This kind of default in payments does not usually given to taking these measures as a bad thing, more because
affect the balance sheet of banks like SBI because mortgages the economy is growing and the demand will only firm up
as a percentage of total assets are very low. Of the total loan even more. The price and demand have not been affected in
portfolio of Rs80,000-crore, special loans would be in the the festive season which ended recently.
vicinity of Rs20,000-crore.
Pricing in real estate can only be controlled by increasing
Even HDFC’s teaser loan portfolio is about 27 per cent of supply in housing segment. Even if the floating rates for housing
its retail home loans provided. HDFC’s mortgage book, it loans are likely to rise, developers don’t see any denting in
is known, is around Rs1.06-trillion and retail loan makes up the demand – it is almost like the Shanghai building which
about 68 per cent of that. rises tall in six days to 15 storey. But the point that is moot is:
will the approvals in India come so fast to build a structure
In regulation of loan to value (LTV) ratios the RBI has said that
of that kind?
banks will be able to give up to 80 per cent loans to Rs50-lakh
worth property. Till now the LTV was unregulated and banks Anil Parameswaran Nair is Executive Editor of Property World
used to give up to 85 per cent loans. In many of the developed magazine, based out of Mumbai. He has been a business
and a few developing countries the LTV is regulated, but the journalist for the last 19 years and has worked as Associate
government also helps people to buy houses in terms of down Editor of the Indian Express Group, News Head of Real Estate
payment assistance for first time buyers. Television, News Channel Head of India.com and Assistant
Editor of Express Exim Review. Though most of his time is spent
In India the government has no such plans or provisioning and
in pursuing professional calls, Anil Nair’s favourite pastime is
hence the lower end of the market, where the demand is real
making short films and photography.
CREDAI-NAGPUR
CREDAI Nagpur sets up a Customer

REP O RT
Grievance Cell
T
he CREDAI Nagpur in its Annual General Many builders, including Vice President Mr. Anil Nair
Meeting formed a Customer Grievance Redressal and Mahesh Sadhvani, Gaurav Agarwal, Ramesh
Cell for the benefit of the flat purchasers from Pise, Pradeep Khandwani, Siddharth Saraf, Satish
the builders who are the members of the Bais, Anil Sahasrabjojanee, Suresh Wadwhani,
Association. More than 100 builders attended the AGM and Ashok Chandak, Vijay Kandode, Rajesh Bajaj,
unanimously decided to follow the Code of Ethics to bring Mahendra Tayawade, Pahilaj Sachani, Eaktavya
in more transparency. Hon. Gen Secretary Prashant Sarode Wasekar, R A Sahu, Shashikant Gosavi, Rajendra
assured that the Redressal Cell will be made operational very Bose and Milind Bhombe were present.
soon and customers of our Member builders can contact this
cell for any grievances.
- Rathnakar Hegde
REAL ESTATE – The overall funding by
FUTURE banks is regulated by

Reserve Bank of India,
OPPORTUNITIES &
who has played a pro-
active role in financing
of various sectors of the
BANK FUNDING economy including real

estate.
Editor’s Box Reserve Bank of India,

Here is a piece with past, present and future of and had in June 2005 laid
opportunities in Real Estate clearly enunciated with down guidelines for banks
ofcourse a hint as to what a Developer should do to tap to classify their funding to real estate sector under different
Bank finance by one of the most pro-active and practical classification viz., Direct and Indirect exposure. Residential
Bankers of the country. mortgages, Commercial real estate and Investment in
mortgage backed securities were included under Direct
I
t has been widely acknowledged that with exposure, whereas exposure to National Housing bank (NHB)
the liberalization of Indian Economy and the and Housing Finance Companies (HFCs) was included under
economic reform programmes, Real Estate sector Indirect exposure.
has made rapid changes. Real Estate, with its

Banks have been encouraged to lend to Housing sector
contribution to the GDP has emerged as one of the major
and have been permitted to include their direct exposure
indicators of the economic health of the country. Real GDP
upto Rs.20.00 lakhs to a single unit, under priority sector
from real estate, ownership of dwellings and business services
lending. Indirect exposure of banks to housing sector by way
increased at a 5-year CAGR of around 8.5% between 2005-
of refinance to governmental/non-governmental agencies or
2009. At current prices, the 5-year CAGR was around 15%
Housing Finance Companies, subject to certain conditions
The sector generates huge employment opportunities in the has also been permitted to be included under priority sector
country directly, including self employment opportunities to lending. Government of India, by providing tax benefits/
unskilled/semi-skilled and skilled workforce, such as plumbing, incentives to individuals as well as to developers has driven
masonry, electrical, etc. Indirectly it also generates substantial the growth in the sector. Allowing Foreign Direct Investment, is
business opportunities and consequently employment in other also an endeavour to give boost to the real estate sector.
segments of economy, such as Iron & Steel, Cement, Mining,

However, after sub-prime crisis in USA, Reserve Bank of India
Manufacturing, etc. Investments in real estate, like any other
as well as Banks in the country have been taking a cautious
industry, have a multiplier effect on income and employment.
approach in lending to Real Estate Sector. The caution is not
It is estimated that the overall employment generation in
unfounded, as it has been observed that a lot of projects
the economy due to additional investment in the housing/
were delayed, due to shortage of genuine buyers, speculative
construction sector is eight times of the direct employment. nature of transactions, etc. Indian real
The banks have always played a crucial role in development of estate sector too witnessed
downturn, forcing
the real estate sector. Their pivotal role in the shape of financing
of housing sector initially has given a huge boost to the real
estate. It would not be incorrect to say that banks’ financing
of housing sector has resulted in more planned expansion
of towns and cities. Similarly, emergence of commercial
complexes, which have improved visual aesthetics not only
of the buildings but of the towns and cities also, owe a lot to
the financing from banks.
RBI to extend special regulatory benefits to banks, on first urban areas is only 28 per cent. The pace
restructuring of advances to real estate, upto 30.06.2009. of urbanisation is now set to accelerate as
the country sets to a more rapid growth. 300
Reserve Bank of India rationalized the guidelines to be
million Indians currently live in towns and
followed by banks with regard to lending to real estate in
cities underserved by utilities, with inadequate
September 2009. It seems that RBI made an effort to exclude
housing and now choking in traffic. Within 25
all such components from the definition of real estate, where
years, another 300-400 million people will be
the element of speculation was minimum and ensure smoother added to Indian towns and cities. If not well
flow of bank credit to them. managed, this inevitable increase in India’s
urban population will place enormous
The sector has started to see some light after the downturn and
stress on the system. According
looks forward to gain growth momentum in the coming years.
to the report of the technical
The sector has recorded a healthy recovery during the current
group on estimation of
financial year, compared to the sluggish demand observed
h o u s i n g s h o r t a g e, a
during the last year. With other segments of economy such as
shortage of 26.53 million
manufacturing and services recovering from the downturn, the
houses during the 11th five
demand for office space, commercial space as well as housing
year plan was estimated.
can be expected to improve. The oversubscription of recent
Over a longer term, it has
IPOs from Prestige Estates, a real estate firm, from Bengaluru,
been estimated that upto year 2021, there will be demand
and Oberoi Realty a Mumbai based real estate company is
for around 140 million houses requiring investment of Rs.
testimony to the fact that the mood with regard to real estate
200000 crore.
business has improved.
This though being an area of concern, for State as well as
The developers, however, have to be cautious in their optimism.
Central Government, is an area of vast business opportunity
It has been observed that with pick up of demand, prices have
for the industry as a whole, as this can be expected to
registered a steep rise more so in metros and large cities. The
give impetus to the residential mortgages as well as to the
Indian customer, known globally for his ‘value for money’
commercial real estate.
attribute, is sure to adopt wait and watch policy, if price rise
is steeper. The developers would be well advised, if they Keeping in view that the real estate sector is considered
adopt a more customer friendly policy and do not go all out as a sensitive sector for lending by the banks, it becomes
for increasing prices. This is expected to keep the momentum necessary for the developers to improve their credibility, so
going over a longer period. that they continue to have access to bank credit. The rating
of the real estate projects by external agencies has recently
Recent entry of large corporates into the real estate business been introduced, which should be utilized by the developers,
sector has made the sector exciting and shakeout and not only to sell the projects, but also to provide comfort to the
consolidation, if expected, cannot be out of place. Hence to bankers and seek competitive pricing.
remain in business, smaller yet earlier players in the industry
will have to gear up for the challenge and set new benchmarks, The challenge before industry, therefore, is to ensure that
for new entrants to emulate. momentum of growth is maintained, keep the cost low, prices
moderate, provide value for money to customers and be able
RBI in its 2nd quarter review of monetary policy on 2nd to raise finances both from banks as well as from public
November 2010, has put a regulatory ceiling on housing loans and continue setting new benchmarks in ethical business
by commercial banks as a result of which banks shall not be practices.
able to lend above 80% of value of the property. RBI has also
Mr. Rathnakar Hegde is the Executive Director of Oriental
increased the cost of lending by banks, for residential housing
Bank of Commerce
loans by increasing the risk weight. The loans for acquisition
of high end housing units where loan component shall exceed
Rs.75 lakhs will become more expensive. This is expected to
lead to moderation in demand for housing units especially high
end housing units.
As per the mid-term appraisal of 11th five year plan,

urbanisation in India has occurred more slowly than in other
developing countries and the proportion of the population in
Service tax -
Realty players
caught between
Writs and the
Department
Editor’s Box
The author has tried to clear the mess relating to Service - S Sivakumar
Tax issues and also has given his suggestions as to how to be ‘deemed’ as taxable
tackle situations when the Department or the clients armed services. The text of the
with court decisions attack them. Explanation, as passed

by the Parliament is as
S
ubsequent to the introduction of certain highly follows:
controversial amendments in the Finance Act,
2010, in respect of construction services and “Explanation.—For the
renting services, the High Courts have been purposes of this sub-
swamped with writ petitions filed by the Industry Associations clause, the construction
as well as by the aggrieved parties. Many of these writ of a new building which is intended for sale, wholly or partly,
petitions have included the Developers as respondents, a by a builder or any person authorised by the builder before,
new phenomenon. during or after construction (except in cases for which no sum
is received from or on behalf of the prospective buyer by the
While numerous writs are getting filed in the Courts and some builder or the person authorised by the builder before grant of
Courts have been giving stay orders, the Department, on its completion certificate by the authority competent to issue such
side, has been vigorously pursuing the Developers and Builders certificate under any law for the time being in force) shall be
for collection of service tax. deemed to be service provided by the builder to the buyer;”
This piece is an attempt to get an understanding of the current Till this amendment, the prevailing view, which has been
issues and on how Developers can think of protecting their accepted by the Department is that, pure Developers, who
interests in this highly surcharged atmosphere. were not constructing the residential complexes, are not liable
to service tax. After all, in terms of the statutory provisions, the
Let’s look at Construction services, first.
service tax levy is on ‘construction’ of residential complexes
The Finance Act, 2010 has introduced certain fundamental and by no stretch of imagination, can a Developer
changes in the levy of service tax on the Realty players. A new who has contracted out the construction activity
concept of making the Developer a ‘deemed service provider’, be treated as one who is ‘constructing’ the
a concept which is till now unknown in the service tax law, residential complexes, as contrasted
was introduced with effect from July 1, 2010. The Budget for to the contractor. The Board had, in
2010-11 has incorporated the insertion of the Explanation to its Master Circular No. 96/7/2007
Sections 65(105)(zzzh) of the Finance Act, 1994, according to dated 23rd August 2007, in Para 079.1,
which, the scope of ‘Construction of Complex’ services is now clarified that, where the builder, promoter,
expanded to provide that, unless the entire payment for the developer or any such person builds
property is received post the completion of the construction of a residential complex by engaging
the flat/commercial property, as evidenced by the Occupation a contractor for construction of
Certificate, all contracts, irrespective of whether they are the said residential complex, it is
agreements of sale or agreements of construction, would the contractor in his capacity as
Now, how does the Developer protect himself in a situation
a taxable like this, where on the one hand, his customers, armed with
service interim orders from the Courts, are not willing to pay service
provider tax, while, on the other hand, the Department is asking for
(to the builder/ service tax to be paid from Day One?
promoter/developer/
Firstly.... it must be borne in mind that the remedies against
any such person) who is liable
writs are available only to the petitioners. Thus the benefit
for payment of service tax. The Board
arising out of a stay order cannot be extended to third parties,
has been expressing a similar view in its earlier
who are not petitioners.
circulars also.
Secondly....when Developers are included as Respondents,

Writs have been filed in many High Courts, challenging the
they would need to approach the Court for clear directions
amendments carried out to ‘Construction of Complex’ services
on discharging their liability to the Department. While the
and ‘Commercial or Industrial Construction’ services. The
individual flat buyers are entitled to approach the Courts
Bombay High Court, in the writ filed by the Maharasthra
on service tax matters, a stay given to them would not
Chamber of Housing Industry 2010-TIOL-526-HC-MUM-ST
automatically cover the Developers, unless the orders of the
and the Madras High Court, in A P Ravi v. Union of India and
Court specifically cover them (in addition to the Service Tax
others 2010-TIOL-604-HC-MAD-ST have stayed the operation
Department), as well, as is the case in the stay given by the
of the amendment. The Karnataka High Court has also given
an interim stay, in respect of a writ petition filed by the CREDAI, Madras High Court, referred to above.
pending further hearings. What is extremely surprising in the Thirdly....we would need to bear in mind the fact that writs
A P Ravi case is that, the Developer has also been included
that are being filed are only in respect of the amendment to
as a respondent, as aforesaid. The Madras High Court has
‘Construction of Complex’ services. Budget 2009-10 has not
restrained both the Service Tax Department and the Developer,
tinkered with the provisions applicable to ‘Works Contract’
from collecting service tax, on construction services.
services, which came into effect from June 1, 2007. Most
Not withstanding the fact that the High Courts are granting Developers and Builders have already switched over to the
stay orders, the Service Tax Department has been quite busy Works Contract services in respect of the new projects. In these
pursuing the Developers and Builders for collection of service cases, service tax would need to be collected and paid to the
tax. The Service Tax Commissionerates in some Southern Department, in accordance with the Composition Scheme.
cities have sent written notices to even pure Developers who,

Fourthly....in cases where the individual flat buyers have
as aforesaid, have been outside the purview of service tax
obtained stay orders from the Courts, it would be important
even by the admission of the Board, demanding service
for the Developers and Builders to protect themselves against
tax from June 16, 2005 on a rather perverse interpretation
any future liability, by insisting on a legal indemnity from the
that the amendment introduced in the Finance Act, 2010, is
flat buyers. A typical indemnity format covering the Developer
retrospectively applicable. I’ve reproduced below, the typical
for a possible service tax liability, in the future, along with
wordings used in the communications sent by one of these
interest, would greatly help.
Commissionerates, viz.
Fifthly.... Realty players would be well advised to keep the
“It has been clarified in Budget 2010, by way of insertion of
Service Tax Department informed of the stay orders received by
an explanation under the definition of Construction of Complex
their customers, so as to completely avoid any
Service, which states that, unless the entire payment for the
chances of being slapped with penalties at
property is paid by the prospective buyer or on his behalf, after
a later point of time.
the Completion of Construction (including its certification by
local authorities), the activity of construction would be deemed And lastly..... Developers and
to be a taxable service provided by the builder/promoter/ Builders would be well advised to
developer to the prospective buyer and the service tax would keep a track of the developments
be charged accordingly. Since, this explanation does not alter emanating from their respective
or amend the scope of the service, it will have effect as if the Service Tax Commissionerates. Very
same if part of the service since beginning”. recently, a prominent online tax portal
carried a story of how the Service Tax Commissionerate of a ord er i n t h e
Southern metro, had openly taken a stand against the Circular Home Solutions
No. 108/02/2009-ST dated January 2009 in a show cause case.
notice issued to a Developer. I am informed that the Joint
The Supreme Court in its
Secretary of the Ministry of Finance had had to pull up this
order on 19.11.2010, has held as
particular Commissioner for taking an open stand, against the
under:
views of the Board. It seems to me that non-implementation
of the Board Circulars by the Departmental officers is not “Counsel appearing for the parties agree that they would all
a crime, so long as it is not done in a brazen manner as make efforts for getting the writ petition, pending in the High
is perhaps the case with the Commissioner of the Southern Court, disposed of on the next date and therefore, no order
metro, referred to by me. is required to be passed on this, for the present. We request
Let’s now discuss the issues related to the writs filed in respect the High Court to dispose of the writ petition itself since an
of the amendment effected to the renting services. interim order is passed, which according to the petitioners,
is creating prejudice to their interest. Re-notify in the second
As we know, the Government’s attempts to legalize the levy week of January, 2011.”
of and collection of service tax on commercial rentals, on a
retrospective basis, from June 1, 2007, would seem to have How do the Developers protect themselves, in the case of the
met with some judicial residence, at least in so far as the service tax levy on renting services?
retrospectivity of the levy is concerned. While the Delhi High

Well... the suggestions given in the earlier paragraphs would
Court has given a stay in the Home Solution Retail Ltd v. Union
pretty much apply here. In addition, in the light of the fact that
of India and others 2010-TIOL-341-HC-DEL-ST, the AP High
some High Courts have stayed only the retrospective operation
Court, in Trent Limited v. Union of India and Others 2010-TIOL-
of the service tax levy on renting services, Developers would
402-HC-AP-ST, has stayed the recovery of service tax only for
need to bear in mind that an order passed by a High Court
the period June 1, 2007 to March 31, 2010. Further, while the
on a writ petition questioning the constitutionality of a statutory
Karnataka High Court has been giving blanket stay in respect
provision under Article 226 of the Constitution will have effect
of the writs filed before it challenging the constitutional validity
only in the particular State or States covered by its jurisdiction.
of the levy of service tax on rentals, the Allahabad High Court,
I also understand that the Punjab and Haryana High Court has
in a very recent decision, viz. Orient Craft Limited v. Union of
already passed orders, upholding the constitutional validity of
India and others, has refused to stay the prospective operation
the retrospective levy of service tax on renting services.
of the service tax levy on rentals.
And, in the case of renting services, Developers would need to
As is the case with regard to the writs filed in the case of
bear in mind that what is covered by the writs are cases where
construction services, Realty Developers are being included as
the Developers are only involved in the renting/leasing of the
respondents in many of these writs. It becomes very important for
bare shells. When additional services like air-conditioning are
the Developers and Lessors, to approach the Courts for specific
provided service tax is very much applicable, as has been held
directions on their statutory obligation to discharge the service
by the Delhi High Court, in the famous Home Solutions case.
tax liability in respect of renting services, as most of the stay
orders that I have come across have not specifically stayed the Before concluding....
collection of tax by the Developers-respondents, as contrasted to It would need to be appreciated with concern that, in the
the Government/Service Tax Department who are also named
event that the Courts uphold the constitutional validity of the
as respondents.
amendments brought about to construction services and renting
In a very recent interesting development, services, it would be the Developers who would have to cough
the Supreme Court has, in its orders up the tax liability, along with interest, not withstanding the
dated November 19, 2010, refused to fact that the Realty players may not be in a position to recover
restrain the High Courts from passing stay this liability from their customers. Hence, it becomes extremely
orders, in respect of the levy of service tax critical for the Realty players to legally cover themselves with
on renting services, in an appeal filed by indemnities from their customers.
the Government against Delhi High Court’s
Mr. S Sivakumar, CA & Director, S3 Solutions Pvt. Ltd.
The Ant
and its
Philosophy
Swami Sukhabodhananda
of Prasanna Trust
Editor’s Box - Swami Sukhabodhananda

This Management lesson from Swamiji, though general in ‘An ant?’ he questioned.
nature, is very very appropriate for Real Estate which goes
through cycles of depression and buoyancy. If we follow the If you observe an ant, you can learn a lot.
8 simple principles enunciated in this article, all our affairs

• Whatever obstacles you place in front of an ant, it is so
can be handled efficiently and with peace of mind.
flexible that either it goes around it, under it or above it.
T
Flexibility is a great quality in an ant.
his is a typical narration from what I recently
• An ant never quits and it is focused on its goal. It has the
encountered.
attitude of ‘Winners never quit; Quitters never win.’
A person who met me said, ‘I was born in • When it is summer, it plans for winter – Tremendous
Bombay, and am now settled in New York. I leave home at planning ability.
7.30 a.m. for work and am back only at 8.30 p.m. I have to • When it is winter, it waits patiently for summer –
achieve my organisational goals and at the same time give Patience.
quality time to my wife and family. I am tense and I don’t • At any given point of time, it does all that is possible; it
know how to go about organising my life… and I find that is holistic in whatever it does, however small it is, never
my life is imbalanced.’ invalidates its strengths – Commitment to do its best.
• It operates in a TEAM – Team is Together Empowering
I said, ‘The fact of life is, you are busy and have chosen to be
to Achieve More.
in a busy city. It is your choice. Now add one more dimension
• Ants have the humility to follow the Leader- Humility is
to your choice . . . inspite of this fact I will learn to be relaxed,
Strength; not Weakness.
balanced and make my relationship work beautifully. Life is
• United they build an ant-hill - an engineering feat – where
like painting and not arithmetic. The painter chooses to create
even cooling effect is taken care of, inside an ant-hill –
his own world through his art.’
Team and Team Intelligence.
The person asked, ‘What should I do, in spite of my busy • Ants, while moving in a chain, have perfect co-ordination
schedule, to give quality time to my wife & family, still be relaxed to send feedback to the ants following them about the
and proactively go about reaching my organisational goals?’ path they are treading on. This communication chain has
perfect networking – Communication Chain.
I said, ‘You should observe an ant and learn to organise
‘Can you organise and balance your life like an ant?’, was my
your life. Ants overcome life-threatening obstacles in this
advise. I elaborated further saying we can ask these questions
vast world.’
by comparing an ant’s qualities:
1 Flexibility: Are you flexible in giving quality time to your By following this philosophy, let the results speak.
family? Can you appreciate your wife in a way that is Have you created a successful ant-hill?
life nourishing? Can you see flexibility is the mother of
Oh, Mind Relax Please! and allow relaxation to create balance
creativity?
and peace thus making your struggles sacred.
2 Planning: In summer, when everything is going well, are
you planning for winter? Or are you lost in your joy? Yoga of Wisdom
3 Patience: In winter, during difficult days, are you wise Life is like Painting and not Arithmetic.
enough to develop the quality of patience and have an Create your world of Joy.
understanding of the seasonal changes?
Yoga of Action
4 Enjoy each moment: Can you consider every incident
Follow the Wisdom of the Ants.
as joyous and totally rejoice in the present rather than
desiring that one or some of your joyous moments be Contemplation
permanent? What the human mind can conceive, believe and dare,
5 Commitment: Are you giving your best to the present it can surely accomplish.
moment? Are you allowing yourself to better your best Our struggles have a cosmic purpose.
and make it a habit to be fully involved in everything?
Swami Sukhobodhananda is not only one of the most respected
6 TEAM: Can you drop the ‘I’ in you and operate from
spiritual preachers of our country but also nicknamed as
‘WE’ and make your family a team?
‘Corporate Swamiji’ because of the highly motivating and
7 Humility: Can you be humble to follow the rules of life
successful corporate programmes offered by him.
rather than treat rules as binding forces? Can discipline
become a harnessing force? For Swamiji’s tailor made corporate interventions
8 Networking ability: Can you meticulously network with and seminars contact 9901777006, 4153 5832-35.
people in accomplishing higher tasks? www.prasannatrust.org
CREDAI Tamil Nadu
October 28,2010 will be marked

as a red letter day in the annals of
REP O RT
CREDAI Tamil Nadu.
T
he show of solidarity expressed by CREDAI Tamil intention to go public with the strike was made during
Nadu at the unjust hike of cement prices and the the press conference.
strike organized to demonstrate protest was a
grand success. There was a huge show of support to the strike
and work at sites came to a virtual standstill. In
This show of protest was initiated post the EC meeting held fact there was representation from the employees
on September 28,2010 during which it was decided to of construction companies and the laborers too.
escalate the issue which effects the business. Subsequently CREDAI Tamil Nadu was present in strength with
CREDAI Tamil Nadu mobilized opinion from across the representation by 42 members from Chennai and 20
Industry bodies including National Association of Realtors, members from Madurai/Coimbatore/ Trichy.
CREA, BAI and Federation of Civil Engineers Association,
all the Flat Promoters Association of Tamil Nadu etc. This The cement manufacturers and the State Government
was followed by a press conference initiated on September will surely take cognizance of CREDAI Tamil Nadu’s
29, 2010 highlighting the unjustness of the move by cement just stand and in turn will lead to a rollback of the
manufacturers. cement prices.
Subsequently the team met the Finance Secretary of Govt The demonstration today has exhibited that CREDAI
of Tamil Nadu to represent our concerns. During the period Tamil Nadu is in the forefront to protect the interest
leading to the protest, the members were in constant touch of our sector and our consumers and when required
with other Industry associations to mobilize opinion. The can take the Bull by the Horns.
Advertise in CREDAI Magazine to enlist attention of the top
Management of the top developers in the country
Confederation of Real Estate Developers’ Associations of India (CREDAI) is the apex body for
private Real Estate Developers in India. CREDAI Real Estate Review is the official quarterly
magazine of CREDAI which reaches out to more than 5000 prominent Developers all over the
country. The magazine has a captive audience who are users of basic construction products in
general and your product in particular. The product, if advertised, will attract special attention
of the topmost executive in the Developer companies. The magazine is generally retained by
EDITORIAL BOARD
the decision makers as a reference booklet. Therefore, the magazine will be the most effective
Irfan Razack
tool to reach out to the decision makers of the Developer community.
Ranjit Naiknavare
Pradeep Jain
The tariff and other details for advertising in the magazine are ; Niranjan Hiranandani
Position Single Insertion 4 Insertions (One Year) Dharmesh Jain
Back Cover - Full page Rs. 75,000/- Rs. 2,50,000/- Harsh Patodia
Uzma Irfan
Inside Cover - Full Page Front or Back Rs. 50,000/- Rs. 1,50,000/-
G P Savlani
Double spread (inside) Rs. 50,000/- Rs. 1,50,000/-
Full Page (inside) Rs. 30,000/- Rs. 1,00,000/-
 Only full page or double spread advertisements accepted.
 Dimensions
Double Spread Full Page
Bleed: 426 x 303 mm Bleed: 216 x 303 mm
Non Bleed: 360 x 265 mm Non Bleed: 180 x 265 mm
Trim size: 420 x 297 mm Trim size: 210 x 297 mm
 The rates are for colour advertisements (B/W ads are not
accepted)
 Paper : Cover page 300 gsm, Inner page 170 gsm art
paper
 Artworks to be submitted in high resolution (300 dpi) in
CMYK color and in one of the following formats - PDF,
EPS Tiff, Corel Version 9 or Illustrator Version 9 and must
be accompanied by a color proof.
 Payments in favour of CREDAI by at par cheques or those
payable at Delhi.
To place your advertisement in the magazine, please send the

material to the address mentioned below.
Hope you will utilize this wonderful opportunity to showcase

your products.
A. Balakrishna Hegde
Editor
CREDAI Real Estate Review
Advertisement cheques (favouring CREDAI) and material may please be sent to : A. Balakrishna Hegde (Editor, CREDAI Real Estate Review),
Chartered Housing, #27, Victoria Road, Bangalore 560 047. Ph: 080 – 25567333 / 34, fax : 080 25567322, email : info@charteredhousing.com
SP FABPROJECT
PROJECT : SD TOWERS
LOCATION : MUMBAI
CLIENT : SD CORPORATION
ARCHITECT : HAFEEZ CONTRACTOR
PRODUCT : CAPPED CURTAIN WALL,WINDOW, SKYLIGHT
TOTAL AREA : 18250 SQM.(UNDER EXECUTION)

Letters to Editor
You have taken CREDAI’s in house magazine to new heights.
Without a doubt the last issue is the best we have ever produced.
It has become a great vehicle for advertisers of building materials
in addition to the excellent content for Developers
Kumar Gera
Chairman, CREDAI National
Day by day content is improving and becoming

more and more informative.
Sushil Mantri
Chairman & MD, Mantri Developers
I was pleased to go through the latest edition of the Magazine, which has improved
dramatically in terms of the quality and the contents. We should have a dedicated
section focusing on the Technology, Innovation & Efficient Techniques in the construction
sector – with elaborate case studies and the benchmarks created in the burgeoning Real
Estate Sector in India. We can also support this section by inviting the special guest
columns from the renowned experts at the world’s foremost real estate institutes
Getamber Anand,
Managing Director, ATS Group
Vice-President, CREDAI
CREDAI – REAL ESTATE REVIEW has come out with an International class printing and presentation.
Kudos to the editorial team for the quality of content. May I suggest that the review should have
section devoted to builders and developers from every region where they could share their feedback
on newer technologies and materials.
S.K. Jhawar
SuSampada, Indore
I have just flipped thru the pages of the latest CREDAI Magazine and I should confess, it
is one of the best produced magazine, with innovative formats, specially editors note in
each of the face page of articles.
Specially the articles by Shri. Subrotho Bagchi, about the most humanitarian -
professional work being done by , who has given a decent burial to 42,000 ( mind
boggling indeed) claimless bodies. It is JUST GREAT, indeed and it will take only
authors like Shri. Bagchi, to recognise such selfless work. Of course, Swami
Sukhabodhananda’s article on good parenting, specially the story of the
boy who tries to demand money from his mother, for the chores done by
him, in his own house, is thought provoking.
Congratulations to your finest efforts in bringing such a magazine

into light.
Gouraswamy Krishna murthy

Bangalore
T
N
EXPO 2010
CREDAI MAHARASHTRA’S
PROPERTY
C
REDAI Maharastra organised a very successful city associations were present along with Mr Rajesh Rane,
Property Expo titled “Mera Shahar, Mera Editor of Metroscan.
EVE
Ghar” at the Bandra Kurla Complex Ground in

Mr Gautam Chatterji complimented CREDAI Maharashtra
Mumbai on 26-28 November 2010. The expo
on conducting this exhibition in Mumbai and said how
was held in a huge air conditioned hangar which provided all
this initiative would help decongest Mumbai. He praised
facilities both for participants and home seekers. The highlight
CREDAI Maharashtra for having a proper Code Of
of the expo was the fact that properties from 10 cities outside
Conduct with its efficient redressal system, which ultimately
Mumbai were showcased; and hence the title. DHFL was the
benefitted the consumers. While talking about the rapid
principal sponsor of the event.
urbanisation and housing shortage, he mentioned that
Over 125 stalls with developers from Akola, Amravati, the state government was looking to fruitful partnership
Aurangabad, Kolhapur, Nagpur, Nashik, Pune, Pimpri with private sector to fulfil the need for housing. He said
Chinchwad & Solapur displayed over 500 projects from the government looked forward to working closely with
across the state. CREDAI Maharashtra in the days to come and assured the
organisation of his assistance in resolving issues pending
The Expo was inaugurated by Mr. Gautam Chatterji, Hon.
with the government.
Principal Secretary, Housing, Government of Maharashtra
with the traditional lamp lighting and ribbon cutting in the Mr Rajan Daryani spoke about the various initiatives of
presence of Mr. Lalitkumar Jain, Vice President, CREDAI. CREDAI Maharashtra and elaborated on the Code Of
Conduct. Mr Atul Goel spoke about the various cities and
Mr. Rajan Daryani, President, CREDAI Maharashtra
projects that participated in the expo. He also introduced
explained that since Mumbai is a city consisting of large
and complimented the Exhibition Team of Mr Rinku
migrant citizens from all cities, this expo tried to reach out
Shewani, Mr Samir Sagar & Mr Rupesh Banthia.
to the people wanting to own a house in their hometowns.
It also aimed to showcase the progress of the various towns Mr Lalitkumar Jain and Mr Rajan Daryani also conducted
and cities in Maharashtra to the Mumbaikars. Present at a press meet at the venue. The expo and the press meet
the inauguration were Vice Presidents Mr. Satish Magar was widely covered extensively in the Print & Electronic
& Mr. Anant Rajegaonkar, Hon Secretary Mr. Pradeep Media including Indian Express, Hindu Businessline,
Pimparkar, Hon. Treasurer Mr. Shantilal Kataria ; and Mr. Maharashtra Times, Sakaal, Nav Baharat Times, Saamna,
Atul Goel, the Hon. Joint Secretary & Convener of the etc. A special edition of Metroscan was distributed to all
Exhibition. Besides, the Presidents and members of various visitors at the exhibition.
S e r i o u s Humour
The Donkey and
the Dog New Story
There was once a washer man
MANAGEMENT LESSON
who had a donkey and a dog.
One night when the whole world was One fine day, a bus driver went to the bus garage, started
sleeping, a thief broke into the house, his bus, and drove off along the route. No problems for
the washer man was fast asleep too but the first few stops - a few people got on, a few got off,
the donkey and the dog were awake. The dog and things went generally well.
decided not to bark since the master did not take
At the next stop, however, a big hulk of a guy got on.
good care of him and wanted to teach him a lesson.
Six feet eight,built like a wrestler, arms hanging down to
The donkey got worried and said to the dog that if he doesn’t the ground. He glared at the driver and said, “Big John
bark, the donkey will have to do something himself. The dog doesn’t pay!” and sat down at the back.
did not change his mind and the donkey started braying
Did I mention that the driver was five feet three, thin, and
loudly.
basically meek? Well, he was. Naturally, he didn’t argue
Hearing the donkey bray, the thief ran away, the master woke with Big John, but he wasn’t happy about it. The next day
up and started beating the donkey for braying in the middle the same thing happened - Big John got on again, made
of the night for no reason. a show of refusing to pay, and sat down. And the next
day, and the next.
Moral of the story “ One must not engage in duties other
than his own” This grated on the bus driver, who started losing sleep over
the way Big John was taking advantage of him. Finally he
Now take a new look at the same story...
could stand it no longer. He signed up for body building
The washer man was a well educated man from a premier courses, karate, judo, and all that good stuff.
management institute. He had the fundas of looking at the
By the end of the summer, he had become quite strong;
bigger picture and thinking out of the box. He was convinced
what’s more, he felt really good about himself. So on the
that there must be some reason for the donkey to bray in the
next Monday, when Big John once again got on the bus
night. He walked outside a little and did some fact finding,
and said, “Big John doesn’t pay!”
applied a bottom up approach, figured out from the ground
realities that there was a thief who broke in and the donkey The driver stood up, glared back at the passenger, and
only wanted to alert him about it. Looking at the donkey’s screamed, “And why not?”
extra initiative and going beyond the call of the duty, he
With a surprised look on his face, Big John replied, “Big
rewarded him with lot of hay and other perks and became
John has a bus pass.”
his favorite pet. The dog’s life didn’t change much, except
that now the donkey was more motivated in doing the dog’s Management Lesson: “Be sure there is a problem in the
duties as well. In the annual appraisal the dog managed first place before working hard to solve one.”
“ME” (Met Expectations) Adapted from http://www.fropki.com/management-lesson
Soon the dog realized that the donkey is taking care of his
duties and he can enjoy his life sleeping and lazing around.
The donkey was rated as “ star performer”. The donkey had
to live up to his already high performance standards. Soon
he was over burdened with work and always under pressure
and now is looking for a NEW JOB ...
Disclaimer: All characters in the story are not at all imaginary.

Any resemblance to person living or dying of work is purely
intentional
Adapted from idle-hours.blogspot.com

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Cover Story

Blue Gold - Vivek Menon

Office real estate -

Quarterly in house magazine of CREDAI National

Our constant endeavor has been to add new and

At the time of writing this, our nation is in

Politicians are, by the common people, presumed

All this is very disheartening and is a matter

The Indian Real Estate Sector is witnessing a metamorphosis. The

A Lessonin NSDC- BANGALORE INITIATIVE

Professional’s Quote 5 Steps to Building an “Information-Edge” In Real Estate

The Ant Harsh Patodia

and its G P Savlani

Philosophy Design & Layout

of Prasanna Trust Email: mail@gaapcommunications.com

Between contributions and advertising queries to :

FUTURE Email: info@credai.org

OPPORTUNITIES & Inhouse Magazine for Private Circulation.

billion by the year 2016 and it is expected and in order to facilitate

to overtake China to be the most populous growth without impairing

country by 2050. Furthermore around 40 the habitat we have

behind large carbon footprint and green house gases. Another

A host of other programmes are on its anvil and IGBC

To become more forceful and effective the council

Going Green as a community means that we need to

The hospital administration

Doctors donated drugs the

Editor’s Box plastic waste, the bowel

opportunity to travel with an American gentleman called Joe. this right?

If any of you have traveled on that road and also across

Joe had another disturbing question- “I know you guys are

a Better Tomorrow... the crux of the challenge; do we have a regulatory mechanism

To the base rate will be added borrower-specific charges,

Bank Name Base Rate%

CENTRAL BANK OF INDIA 8.00 Add: Risk Premium 0.15

AXIS BANK 7.50

VIJAYA BANK 8.25 CONCLUSION:

IDBI BANK 8.00 Whether Base Rate is beneficial?

know what the normal lending rate of the bank is?

MABA and NABC 2010

Report on ‘Implication of Service Tax on

The speakers from ‘Ernst & Young’

Mr. Bhaskar Thakkar: Associate

Mr. Amit Bhagat: Senior Manager

The discussion was about the various

Improving Urban Housing

NSSO findings Health-related indicators

CREDAI – TAMIL NADU

CREDAI Tamil Nadu & Habitat for Humanity

needed hope to around 300 families in that region.

Habitat for Humanity called for a unique Partnership with

CSR INITIATIVE OF CREDAI KOCHI

BPCL Kochi Refinery and CREDAI Kochi

the sector in the short term.

but the over-caution might be uncalled for.

last economic downturn, so much so that asset buyers and

economy. The government has to increase FSI across the board

CREDAI Nagpur sets up a Customer

REAL ESTATE – The overall funding by

FUTURE banks is regulated by

BANK FUNDING economy including real

Editor’s Box Reserve Bank of India,

economic reform programmes, Real Estate sector Indirect exposure.