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Monday,
August 5, 2002, Chandigarh, India  
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Despite recession, prices of plots up Group Housing Societies Residential plots Commercial property Industrial plot
Market continues to be weak |
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It’s lawyers versus consumer-group agents
HSBC’s $ 1 b bad debt adds to gloom
ICICI Bank to convert offices
into branches
Inflation rises to 2.73 per cent
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Despite recession, prices of plots up Panchkula Poor infrastructure in certain pockets, certain government policies related to ownership and, interestingly, the newfound adherence to Vaastu Kala have weaned away buyers from the township. While residential and commercial property still has a market (both buyer and seller market), industrial plots have many sellers but no buyers. Most people in the region still prefer Chandigarh as a better market. Also, the boon for Punjab has been the bane of real estate business in this township. With normalcy returning to the strife-torn state during the past decade, a large number of Punjabi settlers as well as those who had invested their money in real estate here, have now returned back, selling or surrendering their plots back to Haryana Urban Development
Authority (HUDA). Real estate agents as well as sources in HUDA estimate that almost 70 per cent of those who had come here during the later part of 1980’s, have now gone back. The property prices here had then soared to an all time high. However, mid 1990’s saw a downward trend in the business. It is only for the past five years that real estate market has finally picked up again. Also, the fact that a number of group housing societies have come up in Sector 20 and in Mansa Devi Complex, attracting a number of people, have dwarfed the prospects of sale of plots in residential sectors. Thirdly, the fact that a number of pockets of Punjab surrounding the township, including Dhakauli, Baltana and Harmilap Nagar, have proved another deterrent for the downfall of property rates. While independent plots are available for almost 30 per cent prices less than in Panchkula, a number of people have now begun showing their preference for these villages of Punjab. Also the fact that construction in these villages are immune from strict adherence to building by-laws as in Panchkula, have added incentive for the buyers. Group Housing Societies
Though residential plots are available only in Sectors 21, 25 and 26 (of varying sizes – 6.5 marla, 10 marla, 14 marla and one acre), there is little demand for property here. The big surprise has been popularity of multi-storeyed flats in form of Group Housing Societies that have come up here. Unlike in the smaller towns, where people still have a penchant for independent houses, ever-increasing prices of independent plots here have opened new vistas and these flats are very much in demand. Though the “infamous” cracks near Naddha village and Gujarat earthquake did have its impact on Group Housing Societies, by creating a fear psychosis in the minds of buyers against the safety in high rise buildings, this fear has vanished as quickly as it came. Real estate agents in Panchkula as well as in Chandigarh agree that the flats here are much better in design and aspect. The fact that these are more secure than independent houses and innumerable services in the form of plumber, electrician etc, besides the relatively lower cost, has made them very popular. Interestingly, the flats in Mansa Devi Complex are doing much well than those in Sector 20 because of its proximity to Chandigarh and its location on the Chandigarh-Kalka road. A three bedroom flat in Mansa Devi Complex, having a 1300 to 1400 square feet area , would cost anything between Rs 14 lakh to Rs 16 lakh, whereas a similar flat in Sector 20 would be available for Rs 12 lakh to 13 lakh. Though the latter area has a better infrastructure. Residential plots
Though there is a great demand for flats — both in Mansa Devi Complex as well as in Group Housing Societies of Sector 20, the market of residential plots in Sectors 2, 4, 6, 12 and 12-A and 21 has shown marginal increase over the past two years. The availability of plots in these developed sectors, barring in Sector 21, is limited. A survey of the market by TNS shows that most people still prefer to buy built up houses of 6. 5 marla and 10 marla in the developed sectors, than to opt for a plot in Panchkula Extension or go in for a flat. It may be noted that HUDA had planned for Panchkula extension during the hey days of terrorism in Punjab, thinking that the success in the now developed sectors, would be repeated again here. However, this was not to be as almost five years after these sectors being declared, there are few takers. Because of these sectors being located along the National Highway – 73 (where road accidents are a routine) and its distance from Chandigarh and developed sectors of the township, there are few takers. A perfect case in this regard is that of Sectors 27 and 28 here, where almost 70 per cent of the original allottees have surrendered their plots. The most preferred sector in the township is Sector 6, which is considered the VIP sector because of large number of bureaucrats, (serving as well as retired), former army officials including those of the rank of Generals residing here. This sector has plots cut only in one kanal and two kanal sizes, which could cost anything between Rs 35 lakh to Rs 60 lakh, respectively. It may be noted that prices here are decided as a sum and not according to per square feet or square yard. The next preferred sectors in the township are Sectors 7 and 8, with plot sizes ranging from 6.5 marla, 10 marla, 14 marla, one kanal and two kanals. Property in Sector 9 also sells like hot cakes. Commercial property
The rates of commercial property in the township have shown a rapid increase over the past five years. The maximum rates of showrooms exist in the Sector 11 main market and the shop-cum-flats (SCFs) in Sector 7. Real estate agents say that the reason for commercial property doing well here is the increase in local population. “With the increase in population, a number of people preferring to do their work here rather than go all the way to Chandigarh has increased manifold,” says a property dealer in Sector 15. While the prices of showrooms in Sector 11 run into crores, the booths here and in Sectors 7, 8 and 9, too, fetch a good price at over Rs 15 lakh. The SCFs in Sector 7 as well in Sector 15 are also steeply priced. Industrial plot
This is, perhaps, the ugly duckling for the real estate agents as well as HUDA, which has failed to develop the two industrial areas. Lack of proper infrastructure, strict adherence to trades as shown at the time of allotment and transfer policy has marred the development here. Property dealers say that during the past two years, there is almost a 25 per cent decline in property rates here. Of the total allottees a mere 30 per cent have begun production, while the rest of the industrial plots are lying vacant.
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by Lalit Batra Market continues to be weak WITH fears of drought persisting up to last Thursday, the domestic stock markets remained weak and volatile last week. For the first time in nine months, the Bombay Stock Exchange Sensitive index closed below the 3000 level. It shed over 1.3 per cent last week and closed at 2985. Nifty was weaker losing 1.9 per cent to close at 957.75. Investors are keenly watching the progress of the monsoon. Its revival would lead to a recovery on the bourses. We believe that the stock valuations have become attractive at the current levels, and the market is likely to start its process of consolidation soon. But in the process there are going to be bouts of volatility. The current state of the market provides excellent opportunity for the long-term investors to accumulate blue chips slowly at bargain prices.
Bharti Televentures Bharti Televentures, the first integrated (predominantly cellular) telecommunications services company, came out with its first quarter results this week. The company announced a 95 per cent increase in revenue for the quarter ended June 30 to Rs 539 crore from Rs 276 crore in the same quarter last year even as its net loss went up to Rs 68 crore during the quarter from Rs 28 crore in April-June last year. The company’s results are in line with market expectations and should not be seen in standard terms of profits and losses as the company is rolling out huge networks across the country and the impact of that is bound to be reflected in numbers. The operating performance of the company has improved significantly due to excellent increase in the subscriber base, and this has offset tariff pressures.
Business potential The potential for growth of the telecom industry is huge. Give the vast under-penetration and low tele-density, the scope for growth of both cellular and fixed services is fairly high. A comparison with China seems to be the most appropriate benchmark as it is the closest indicator of India’s potential in terms of both GDP and population growth. Between cellular and fixed line services, it appears that the growth potential for the former is much greater. This is evident from the growth rates in China, where even with a cellular subscriber base of 117 million, it continues to add five million subscribers every month.
Scale and size Bharti Televentures is fully integrated along the telecom chain offering a combination of cellular, fixed line, national long-distance and internet services. It also proposes to become a provider of international bandwidth services. However, the backbone of Bharti’s strategy will be its cellular footprint to emerge as a national player. By virtue of its foray into the national long-distance business and after bagging four fixed-line networks, Bharti Televentures (along with its subsidiaries) is best positioned to use the ‘scale’ and ‘size’ to consolidate its position in the Indian telecom market. Bharti is fully geared to compete with the likes of Reliance and Tatas (along with Birla-AT& T), with some competition in the cellular segment from Hutchison.
Long-term buy The stock has been drifting downwards, since its Initial Public Offering (IPO) at Rs 45, due to lack of positive triggers and negative news flow on limited mobility. The current results, however, are not indicative of the company’s true potential and it is expected to show extremely good numbers from third quarter onwards when the investments begin to pay back. A long-term buy on the stock may be initiated with a target price of Rs 45 in next 12-18 months.
Coming fortnight The market recovered last Friday from an intra-day low of 2933 on the reports that soybean-growing areas had received rain and prospects of production had improved. Buying in ITC, on news of UTI selling its stake in the company, and index heavy weight HLL led the recovery. Despite this, uncertainty still prevails in the market over the monsoon front as well as weakness in global markets. If the rains continue to play truant, the sensex may slip up to 2,800. |
by Pushpa Girimaji It’s lawyers versus consumer-group agents EVEN as consumer groups are stepping up their demand for restriction of advocates before consumer courts, the Tamil Nadu State Consumer Disputes Redressal Commission has held in a highly controversial order that only advocates have the right to represent consumers before consumer forums. Describing representatives of the consumer groups who appear before the forums on behalf of complainants as “quacks practising law”, the commission said they cannot be given the right of audience before the forums. In an 81-page order that freely gives vent to personal prejudices, Justice M.S.Janarthanam, President and Mr Kayal Dinakaran, member, advise consumers to engage a lawyer to get justice from consumer forums. Says the commission in its order: ...”He (complainant) can, of course, conduct a petty case by himself without the assistance of a lawyer. He cannot conduct a case requiring knowledge of medicine or technology. That requires the assistance of a competent lawyer. Otherwise, he suffers the detriment”. What is even more shocking about the order is its indulgence in unrestrained consumer group bashing. After launching into a diatribe against consumer groups in Tamil Nadu it warns the “people of this country” to be “eternally vigilant” against consumer groups or else get “duped, doped” (whatever that means). Meandering into issues that have no connection with the complaint on hand, the order throws up a treatise on the alleged misdemeanors of voluntary consumer organisations and even offers unsolicited advice to the Consumer Affairs Ministry at the Centre on its policies vis-à-vis consumer groups. Under the Consumer Protection (CP) Act, a complaint can be filed by a consumer, any recognised consumer association or the government. The Consumer Protection (CP) Rules also provide for a complainant to authorise a consumer organisation or any other person to represent him and file a case on his behalf. Accordingly, consumers who are not confident of fighting a case before the consumer forums authorise mostly representatives of consumer groups to appear on their behalf and argue the case. In this case too, following the unfortunate and untimely death of her husband, Mrs Madhuri had in 2000 filed a complaint of medical negligence before the Tamil Nadu state commission and nominated a representative of a consumer group as her authorised agent. As it is there was a delay of two years for the case to come up for admission. And then instead of dealing with the issue on hand, the State Commission questioned the right of the authorised agent who was not an advocate to represent Mrs Madhuri and sent notices to consumer organisations and advocate associations to take part in a discussion on the subject as “such a vexed question has to be decided by way of an authoritative pronouncement.. “. A notice to this effect was also put up on the notice board of the commission, wherein the commission even expressed its own views in the matter, which was that an authorised representative of the complainant not being an advocate cannot at all be given the right of audience. It also said the CP Rules that provide for such an authorised agent should be struck down as null and void as the CP Act did not provide for
it. And after a lengthy hearing, reaffirmed its own view expressed earlier and denied the representative of the consumer group the right to represent the widow and said, however, there was no bar on the widow representing the case herself. (Mrs Madhuri and others vs Chairman, Apollo Hospital and another, OP no 104 of 2000,) I will not go into the legal infirmities in the order as the National Consumer Disputes Redressal Commission has taken suo motu notice of it and has fixed
September 26 for a hearing. However, what I would like to say is that if this order is not struck down, it would sound the death knell to consumer justice system as envisaged under the Consumer Protection Act. In fact the order goes against the very spirit embodied in the Consumer Protection Act to empower consumers and consumer groups to seek simple, inexpensive and quick resolution of disputes without a professional lawyer. The order also needs to be condemned because instead of dealing with the issue on hand, that is alleged medical negligence, the commission misused its power to settle personal scores and express personal prejudices. In fact the order raises very serious questions about the propriety of the President and the member continuing in that office and on their providing justice to consumers. Now the national commission, in an interim order, has observed that prima facie, it appeared that the state commission had acted in exercise of its jurisdiction illegally and/or with material irregularity. However, noting that the order had raised a substantial issue of law which has far-reaching consequences, it has sent notices to several consumer organisations, besides the two opposite parties, to appear before it on September 26. It has also appointed four advocates to assist the national commission in the matter. |
by R.N. Lakhotia Savings
Q: (a) Specify the accounts on which the benefit of differential rate of interest on savings in banks is paid? (b) Please name the government securities and income funds in which retired people can invest these days and modalities thereof? (c) Also provide information on RBI Relief Bonds (how to invest, liquidity, interest payable monthly, half yearly etc.)?
Dr Prem Singh Dahiya, Shimla Ans: Approach any branch of the nearest bank to enquire about the benefit of differential rate of interest on savings in banks. Reitred people can make investment in “Scheme for retired employees”. Further details are available with bank. You can also invest your entire retirement benefits in Relief Bond issued by the RBI. The rate of interest is 8 per cent p.a. on these bonds, the lock-in period is for five years. Interest is payable half yearly. The biggest advantage is that the entire interest income on these bonds is tax free.
Registration fees
Q: I have purchased a plot by taking housing loan from ICICI (HFC). Can I take rebate U/S 88 on principal component and deduction U/S 24 (i) (vi) of the Income Tax Act on interest component. I also want to know that whether amount paid towards Registration fee for getting registry of my plot is exempted from Income Tax under which section and upto what amount. Harvinder Singh, Patiala Ans: You can take tax rebate U/S 88 on repayment of the housing loan as also you can claim deduction U/S 24 in respect of interest on loan. The stamp duty and registration expenses incurred by you will also be eligible for tax rebate U/S 88.
Interest on MIS
Q: My grandfather has deposited Rs 40,000 as a gift to me, in M.I.S. in Post Office for 6 years in my name and I have opened one recurring A/c in the same Post Office. The interest earned on the M.I.S. A/c is deposited into my recurring a/c every month. At present, my age is about 16 years. By the time, the M.I.S. is matured, I shall also become an adult and I shall get the amount myself as M.I.S. and recurring payment. Is there any tax liability of my grand father on the interest earned on my M.I.S. account? Tripta Sharma, Rajpura Ans: As you are a minor, the income received under Monthly income scheme in the Post Office will be added with the income of your father. However, there will be no tax liability on your grandfather in respect of the interest income earned by you. The clubbing of income of your grandfather will continue so long as you are a minor.
Medical allowance
Q: I am in receipt of Fixed Medical Allowance @ Rs 250 per month. Kindly clarify whether or not the said allowance is taxable under the Income Tax Act. Surinder Chaudhary, Chandigarh Ans: The fixed medical allowance received by you from your employer is fully taxable in your hands. |
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HSBC’s $ 1 b bad debt adds to gloom London, August 4 Later in the week, Standard Chartered will disclose weaker numbers, and admit that it has failed to find anyone to replace Chairman Sir Patrick Gillam. The admission will be an embarrassment for Gillam, who told the annual meeting in May that he hoped to recruit his successor by the time of the interim figures. On Friday, Lloyds TSB was under the spotlight after it increased bad debt provisions because of US bankruptcies and Argentina’s economic crisis. Earlier in the week, Barclays announced that provisions for bad or doubtful debt had risen sharply in the first six months of the year. London financial sector experts forecast that interim pre-tax profits at HSBC have fallen from $ 5.4 bn to about $ 4.7 bn, primarily because of exposure to companies such as Marconi, which are in financial difficulties. Last year, the overall charge for bad debt rose by $ 1.1bn to $ 2.04 bn due to a general provision against Argentina and provisions against corporate borrowers. Bond is bound to be quizzed tomorrow about talks that HSBC is holding with Ping An Insurance that would see it taking a minority stake in the Chinese insurer. Bond recently scotched any hope that he would merge HSBC with Merrill Lynch, the US investment bank, although many analysts believe that Merrill looks ripe for a takeover.
— The Guardian |
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ICICI Bank to convert offices into branches
Mumbai, August 4 At the sidelights of the “First debt investment conference” here today, Ms Morparia told reporters the bank has bagged 400 branches with the merger of Madura Bank. With the RBI approval for 130 branches, the bank will have additional 530 branches across the country. The bank will have 8 million customers by the year-end, she said. The Union Government’s ordinance on recovery and securitisation has helped banks to take strict measures for the recovery of non-performance assests (NPA), she said. The bank is also trying to do financial restructuring of the projects having bad debt. She said that bank is taking extraordinary efforts to solve the Enron issue and it hopes to solve it soon. However, she refused to comment further on this problem.
UNI |
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Inflation rises to 2.73 per cent
New Delhi, August 4 The inflation rate, measured in terms of Wholesale Price Index (WPI) for all commodities, moved up from 2.48 per cent from the previous week but was still lower than 5.16 per cent a year ago. WPI rose by 0.2 per cent to 165.5 from 165.1 in the previous week, mainly due to 0.9 per cent hike in primary articles and 0.1 per cent rise in manufactured products prices. However, the final WPI remained same as that of the provisional figure of 162.9 during the week ended May 25, while final inflation rate remained static at 1.43 per cent.
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