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Punjab lures realtors
RBI’s stringent monetary policy and Finance Ministry’s measures to cut the flab in realty, notwithstanding, real estate players are going all out to launch new housing, commercial and hotel projects, especially in Punjab.
Punjab, which had not seen planned infrastructure and real estate development for several decades, has, of late, become the most sought after investment destination for big players. Both, Indian firms and MNCs, are raising capital overseas, entering into joint ventures with foreign players and allowing private equity (PE) participation for investment to take a slice of realty sector, especially in Punjab, which, analysts say, holds good prospects (short, medium and long-term). Construction activity in Punjab is on a rise. A year ago, the activity was more visible on the periphery of Chandigarh, but now realty players are investing in cities like Ludhiana, Zirakpur, Amritsar, Jalandhar, Mohali and Banur. A noteworthy development in Punjab, which is quite different from other states, is that there is a tremendous investment interest from abroad, especially NRIs. Affluence and change in lifestyle is also driving the real estate players to develop hi-end group housing societies and villas with world-class facilities. Conducive government policies are also adding vibrancy at these places. A number of Indian companies and foreign entities have raised funds in international markets like Alternative Investment Market (AIM) and the London and Singapore-listed REIT. Besides this, $3.2 billion foreign funds have come into the country through private equity route. Analysts, therefore, point out that players may put money in destinations like Punjab, Haryana, Karnataka and Andhra Pradesh, where they may get better returns. “Punjab is one of the most vibrant destinations. With Chandigarh fast becoming an IT hub and industrial activities picking up in Punjab, there is tremendous potential for all kinds of real estate development - housing, commercial, hotels and motels,” vice-president of Vipul Ltd Brajesh Banote says. “Organised development by big real estate developers has changed the real estate scenario in Punjab… luxury and world-class living has become the buzzword and in near future it will be the only acceptable word,” Banote says, pointing out that places like Ludhiana, Zirakpur, Mohali, Amritsar, Bathinda and Jalandhar would see phenomenal construction activities. Sanjay Mathur from Pearl Infrastructure Projects feels that both high-end and mid-segment housing projects hold potential in various cities of Punjab. “Whether it is Ludhiana, Amritsar, Mohali, Zirakpur, Amritsar, Bathinda or Jalandhar - real estate players are pitching for both high-end as well as mid-segment space,” Mathur says pointing out that when there is vibrancy in economic activity, there is immense demand in both these segments. President of Zoom Developers Private Limited Rumneek Bawa, strongly feels that the buoyancy in real estate is also due to NRI rush. Bawa, who recently launched Green Palms project in Patiala says NRIs are keen to connect to their roots. “Earlier, NRIs had no choice to acquire luxury apartments or villas. With developers offering world-class projects, they have good and viable option, either in their own home towns or near their roots,” he said. Assocham general secretary D.S. Rawat points out with GDP growth rate remaining at 9 per cent, there is an immense economic activity across the country. This phenomenon is having a cascading effect on the real estate with growing demand for quality commercial and housing space. Of late, economic activities have picked up in Chandigarh and various towns and cities of Punjab, which is driving the real estate players to make investment in a big way. “Punjab’s proximity to Delhi and reasonably good connectivity is also the reason for investors flocking the state,” Rawat says asserting that state government’s conducive policies have also boosted the morale of the developers. “Public-Private Partnership (PPP) model adopted by Punjab has also given an impetus to the real estate development,” he adds.
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Ease lock-in period condition
It is taking too long for the Administration to implement own decision of reducing the mandatory lock-in period for sale of flats allotted under the cooperative group housing scheme in Phase III sectors of Chandigarh.
A notification to reduce the lock-in period from 15 years to five is awaited before the decision was implemented, says an official of the Registrar Cooperative Societies. The five-year period would be from the date of allotment of land to the respective society. Presently, the lock-in period is 15 years from the date of possession of respective flat. This has aggravated the problem of hundreds of genuine occupants of flats who had purchased property on general power of attorney (GPA). Possessed with the GPA, the Damocles sword of ‘ownership’ uncertainty hangs on their heads. Even the office of the Registrar, Cooperative Societies, has acknowledged the problem of genuine purchasers who have no say in the management of the societies. Genuine members, after selling flats, have no interest in the affairs of respective societies nor do they participate in the affairs of managing committees. In many cases, original members, even after selling the property, interfere in the affairs of the societies. An official in the Department of Registrar Cooperative Societies says the decision to reduce the lock-in period for sale of flats was aimed to benefit hundreds of GPA holders, who have no say in the managing committees of the cooperative societies. The decision would reduce a number of litigations and give more teeth to the flat occupants. No charges are to be levied to allow the transfer. The decision for transfer of flat even after five years from the date of allotment of land to the societies as taken as per the provisions of Clause 6(iv) of the “Chandigarh allotment of land to cooperative “Those persons who have purchased flats on GPA after 2003 will be the major beneficiaries,” says a member of the managing committee of a house building society. To solve the issue, the Chandigarh State Federation of Cooperative House Building Societies (Housefed) has repeatedly taken up the case with the Registrar Cooperative Societies, RK Rao. The Registrar has also been urged to finalise the policy for executing the conveyance deed and the procedure for transfer of house in respect of Cooperative Housing Scheme, 1991. Since the societies had paid the entire cost of land including the interest to Chandigarh Housing Board, the issue needs to be finalised at the earliest. The period of completion of construction of housing projects from the date of actual possession of the sites and not from the date of allotment of land needs to be amended. The condition of time fixed from the date of allotment was unrealistic as in a number of cases, physical possession of sites was handed over after getting unauthorised occupation cleared from jhuggi-dwellers. Seeing the demand for affordable housing, the Administration should come up with a new scheme. No scheme has been floated after the Cooperative Housing Scheme 1991. The housing being provided by private builders and CHB are expensive, says Jai Dev Sharma, chairman, Housefed.
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Capitalists fancy realty
India Inc received funding worth over $10 billion through venture capital route in the first half of this fiscal, with foreign VCs accounting for more than half of the total inflows.
According to the data compiled by market regulator SEBI, VC firms pumped in Rs 43,528 crore (about $10.8 billion) across various sectors during April-September 2007, up 34 per cent from Rs 32,524 crore in the preceding six-month period. Real estate, biotechnology, media/entertainment companies recorded more of domestic VC fundings. Real estate alone attracted investment of Rs 6,435 in the April-September period, accounting for about 15 per cent of the total investment. This included Rs 4,033 crore from domestic and Rs 2,402 crore from the foreign funds. — PTI
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Wanted! Deal cell
Sanjay Gupta of Delhi is eyeing property investment in Ludhiana, the Manchester of India. Driven by the reports and tales of investors making huge profits from investment in land, he has chosen a plot too. But he is a bit wary, especially after hearing innumerable cases of fraudulent land deals.
The chance of making fast money lures but the fear of suffering losses if the seller or the dealer sells him a disputed or already-sold property. His fears are not entirely misplaced. The city may have made many persons rich overnight, due to spiralling prices. They have, at the same time, duped several of lifetime savings. More than 250 persons have lost in shady deals. The number assumes significance with 93 complaints of deceit received last year. The number has swelled three times in data available for nine months of the year. The issue is boiling down to the absence of proper cell or office for verification of property put on sale in the district. Investors face immense difficulty in confirming if the property they are interested in has a clean revenue record and is free from disputes, legal hassles and encroachments. More often than not, investors have fallen in the trap of vested dealers who have sold same piece of land many a times. While the police provides service at the single-window counter in the mini-secretariat for verification of vehicles before they are bought, there is no provision of the smooth hassle and legal issues free sale-purchase of land. Undoubtedly, there is more at stake in land dealing whose value ranges up to crores, than on vehicles, costing much less. “I wish there was one such provision,” says Parminder Singh, a local property dealer, “We have to spend lot of time, energy and money in inquiring about the land some party is interested in.” SSP R K Jaiswal also feels that advance verification of property would end lot of trouble for the police also. It would save lot of time spent on the after-effects of the fraud, “But this has to be done at the government level. It is a policy decision. It would involve lot of departments for verification.” Not only the investors but also banks would also appreciate a property verification office. A bank manager, wishing not to be named, says there are cases where loans from different banks have been taken for the same piece of land, “As of now, banks are dependent on an advocate’s legal opinion only. But the opinion is based on documents and not fieldwork. The fraud of taking multiple loans for same property goes unnoticed.” A perusal of fraudulent complaints reveals that most of the frauds involve fake registration documents or false or illegal power of attorneys. Then there are huge cases of selling the same land to two or even five, six persons. The revenue department has also figured in several deals where khasra numbers are wrong or shamlaat land has been sold. There have been special instances of sale deed in the name of dead persons.
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Construction equipment firms on a roll
Indian earthmoving and construction equipment (ECE) industry is at a watershed in its evolution and set to experience strong growth, spurred by the nation’s rapid economic development.
According to study, ECE Vision 2015: Scaling new heights in the Indian earth moving and construction equipment industry, conducted by leading management consulting firm, McKinsey & Company, for CII, IECIAL, released this week, Indian ECE industry has the potential to grow fivefolds from the current size of $2.3 billion to $12-13 billion by 2015, growing at 24 per cent CAGR. “The McKinsey report states that the industry's revenue and volume have recorded 40 per cent growth year-on-year between 2004 and 2006, reaching $2.3 billion today and uncovers a $40 billion opportunity for the industry between now and 2015,” chairman Excon 2007 and Managing Director and CEO of JCB India Ltd Vipin Sondhi says. The study discusses the five trends that will shape the evolution of the industry and highlights the imperatives to realise this opportunity. Of these five trends, four are growth opportunities - investments of $750 billion in infrastructure development; the increasing dominance of price-and-value focused customers; deeper engagement of global equipment manufacturers in India and increasing opportunities for exports. However, increasing competition from product imports from other low cost countries, like China, could potentially challenge industry growth and is an issue that players need to address proactively. Conservative estimates suggest “as usual” growth will create a market of $8 billion by 2015. But a concerted push by the industry and government alike could result in an additional $4 billion opportunity, equally spilt between exports and the provisioning of India-specific products. Rajat Dhawan, partner and co-leader of McKinsey’s Automotive & Assembly Practice in India points out: “In addition, companies need to pursue four growth-enabling initiatives to expand the market.
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Buzz on Bourses
Mumbai: ICICI Prudential AMC has launched ICICI prudential real estate securities fund, a three-year close-ended debt fund designed for investment in real estate sector. The fund will mainly invest in high yielding debt securities issued by companies that are associated with the real estate sector. Speaking on the new fund, Nimesh Shah, managing director, ICICI prudential asset management company, said: “Indian real estate sector is growing rapidly and is expected to register a growth rate of over 30 per cent in next five years, thus through this fund investors will get an opportunity to participate in this promising sector.” — UNI
Columbia Asia, DLFH pact
Bangalore: Kuala Lumpur-based Columbia Asia Group of Hospitals has announced that Indian subsidiary, Columbia Asia Hospitals Pvt Ltd, has entered into an agreement with DLF Home Developers Ltd (DLFH) for the development of hospitals. In the agreement, DLFH would construct Columbia Asia designed hospitals upon lands situated in DLFH townships in India and then lease the lands and hospital buildings to Columbia Asia, it said in a statement. “The alliance would allow Columbia Asia to leverage the industry leading expertise and experience of DLFH in the development and construction of commercial properties”, it said. — PTI
Exposure in Unitech
Mumbai: The Reserve Bank of India has allowed foreign institutional investors (FII) to increase exposure to 100 per cent in Delhi-based real estate developer Unitech. Investors can now purchase equity shares and convertible debentures of Unitech through primary markets and stock exchanges under portfolio investment scheme (PIS), RBI said in a press note. While there is no limit for FII investment in the company, RBI has put a cap of 24 per cent on investments by NRIs or persons of Indian origin. —
PTI
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Income from PG accommodation is business income
By S.C. Vasudeva Q. I am a widow and own a large house in a prominent sector in the city. I have let out part of it to a group of students studying in engineering college and provide them with all other facilities such as food, laundry and the like. Will I be allowed the deduction of the amount spent on the maintenance and repair of the rooms in which the students reside as well as the expenditure incurred for providing the food from the income I earn from letting out the rooms to such students? — Gurcharan Kaur, Chandigarh A. On the basis of the facts provided by you, you are running a mini-hostel for the students and the rentals so received should be treated as business income. The same will be taxable under the head “income from profits and gains of business or profession”. You would be, therefore, entitled to claim the deduction of actual expenses incurred on the maintenance of the rooms and for other services provided to the students. You should, however, keep record of such expenditure. Such expenditure should be duly supported by the invoices and receipts. It would be advisable to keep proper books of account for recording such income and expenditure. The portion of the house used for your self-residence would be treated separately and its income would be taken as ‘nil’ in view of the provisions of the IT Act, 1961 (The Act), applicable to the computation of income from self-occupied properties. The net income after deducting the actual expenditure incurred in relation to the activity carried on will be taxable in your hands. Joint loan
Q. My wife is working with Department of Posts. She has applied for departmental loan for the construction of house on the land registered in her name. Can my wife and I jointly apply for the second housing loan from bank? If yes, my question is can both of us claim the benefit of deduction u/s 24 on interest on house loan and exemption from taxable income u/s 80 CCC separately? What amount shall I claim as deduction u/s 24 or u/s 80CCC if the amount of instalment with interest paid by me out my bank savings account is 3/4th of the house loan? — Kuldeep A. The facts given in the query are not complete and, therefore, my answer to your queries is based on certain presumptions. (i) It has been mentioned by you that you would like to apply for a second house loan jointly with your wife. I presume that the first house loan means, the loan, which is sought to be raised from the Department of Posts by your wife. (ii) The deduction of interest paid on amount borrowed for the purposes of construction of a house is allowable against income from house property. The same can be claimed as deduction by an owner of the house property. The facts given in the query indicate that the owner of the house would be your wife as the land stands registered in her name and she is going to construct the house on the said land and for which a loan from the department where she is working has been applied. Under these circumstances, in my opinion you would not be entitled to any deduction of interest paid on money borrowed for the construction of the house property as you would not be the owner of the house, which is proposed to be constructed. (iii) The deduction under Section 80C of the IT Act, 1961 (The Act), for the repayment of the amount borrowed for the construction of a house is also allowable to an assessee who has borrowed funds for the construction of residential house the income from which is assessable under head ‘income from house property’ or which would have been, if it had not been used for assessee’s own residence. This deduction thus is also allowable to an owner of the house property. In my opinion your wife only would be entitled to a deduction under Section 80C of the Act.
HUF’s apartment
Q. I have a flat, which I have given on rent. I am a married person and have two sons and living in other house with my wife and parents. Is it possible to throw the flat in an HUF so that the income there from can be taxed separately? — B.P. Yadav, Gurgaon A. The facts in the query are incomplete as it has not been indicated whether an HUF under the provisions of the Act is in existence. I have for the sake of answering your query presumed that it is in existence. According to Section 64(2) of the Act where any member of an HUF converts his personal property by an act of impressing such property after December 31, 1969, as a family property otherwise then for an adequate consideration, the income from such property will continue to be treated as the income of the person who has converted such property into an HUF property. In view of these provisions you will not be able to achieve the purpose for which you intend converting your flat into an HUF property.
Valuer’s report
Q. I am the owner of a piece of urban land, which is situated within the city and has considerable value. I have filed wealth tax return on the basis of registered valuer’s report. However, the wealth tax officer is insisting that he will have to make a reference to the department’s valuation officer for the purposes of determining the value of such land. Is it possible to ignore the valuation report of the registered valuer and refer the valuation to department’s valuation officer? — Mata Din, Ludhiana A. In accordance with the provisions of the Wealth Tax Act, 1957, the value of the assets, which are includible in the wealth for the purpose of the levy of Wealth Tax is to be determined in accordance with Section 7, read with Schedule III to the said Act. Schedule III does not prescribe any method of valuation in respect of the urban land. In the residuary clause of Schedule III, it has however been provided that value of any asset other than cash being an asset which is not covered by Rules 3 to 19, shall be estimated to be the price, which in the opinion of the assessing officer would fetch if sold in the open market on the valuation date. The said Act also provides where valuation of any asset is referred by the assessing officer to a valuation officer, the value of the asset shall be that which is determined by the valuation officer to whom reference has been made by the assessing officer. In view of the above provisions and Circular No. 96 dated November 25, 1972, issued by the department, it is the assessing officer who has to determine the value of an asset for which specific provisions of the schedule III are not applicable. Section 16A of the aforesaid Act provides that where assessing officer is of the opinion that the value determined by the registered valuer is less than the fair market value, he may refer the matter relating to such valuation to the valuation officer. In my opinion therefore, the assessing officer can make a reference to the valuation officer in case he is not satisfied with the valuation made by the registered
valuer.
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Right pipe for dream home
Choose the right conduit to avoid choking and leakages, says Jagvir Goyal Proper functioning of sanitary and rainwater pipes keeps a house odour and leak free. If a sanitary pipe gets choked, emergency situation is created for the inhabitants, as toilets cannot be left in operational for a long time. Choking of rainwater pipe floods the terrace and damp patches appear on the ceiling. If waterproofing of the roof is faulty, leakages may start. Nothing is more troublesome than a leaking roof. Choice of pipes, jointing and fixing are important. Here are a few guidelines to choose right kind of pipes. Material
Earlier, the choice used to be between cast iron (CI) and asbestos cement (AC) pipes. Now, polyvinyl chloride (PVC) pipes are being used. AC pipes are never used for sanitarywork. So the choice oscillates between the CI and PVC pipes. Rainwater pipes may, however, be CI, AC or PVC. PVC pipes are being used due to lesser weight and ease of handling. These are corrosion and chemical-resistant. CI pipes are structurally stronger and temperature resistant. The only minus point is the difficulty in handling them due to their heavy weight. AC pipes crack up easily. Many developed countries have banned these due to the presence of asbestos. In India, these are used as rainwater pipes due to lesser cost. A rainwater pipe continues to serve its purpose even if it has cracks or weep holes in it, provided it is not blocked by dirt. However, it is better to choose between PVC and CI pipes.
Diameter
Prefer soil and waste pipes of 100 mm diameter. Rain water pipes should be of 100 mm diameter. Vent pipes may, however, be of 50 mm. In houses, horizontal waste pipes from floor trap to gully trap may be of 50 or 75 mm diameter.
Choice
While choosing PVC pipes, go for UPVC. UPVC means unplasticised pipes. Remember these are different for water supply and sanitary purposes. Presently, we are talking of pipes to be erected with masonry work i.e. for sanitary purpose only. See that these are IS 13592 marked. Always choose a reputed brand. Finolex, Supreme, Prince, Diplast are some of the reputed brands. Never stack UPVC pipes under the sun. Prolonged exposure to direct sunlight damages them. Also don’t stack more than seven layers, one above the other.
Joints
Remember that two types of joints are provided in UPVC pipe sanitary system. Either elastomeric sealing ring is used in the joints or solvent cement is used to seal them. Pipe ends are of different types for ring type and solvent cement joints. Take care that the pipes are chosen as per the joints to be provided. Pipes for ring joints have a socket at one end to accommodate the ring. Pipes for solvent cement joints don’t have such sockets but have machine made end of larger diameter to allow the insertion and fitting of next pipe into it. Ring joints can bear the expansions and contractions easily. Vertical pipes are subjected to expansion and contraction than other pipes. So these pipes are preferred to have ring joints. Solvent cement joints become unbreakable and leak proof. So the hidden or under floor pipes (wherever unavoidable) are provided with solvent cement joints.
Availability
Fittings for UPVC pipes are now easily available. Earlier, their availability was difficult. There are variety of fittings such as plain T, double Y, plain bend, plain Y, coupler, reducer, cowl, cleaning pipe and connector. Always choose IS 14735 marked fittings of reputed brand. Take care that the pipes and fittings are of same brand. Tell the sanitaryman to work out the exact quantity of these fittings. Have a commitment from your supplier for return or exchange of these fittings as you may need to exchange or return some during the erection work of pipes.
CI pipes
In case you opt for CI pipes, look for IS 1729 mark. Remember, earlier there used to be two ISI marks for CI pipes. IS 1230 was for less heavy pipes used for rain water while IS 1729 was for heavy CI pipes used as soil and waste pipes. Now, IS 1230 stands withdrawn and substituted by IS 1729. All pipes need to be IS 1729 marked. Choose a reputed manufacturer. NIF and RIF are some of the reputed brands.
Pipe check
Check each and every CI pipe for cracks, holes or even pinholes. Overall, the length of each pipe has to be 1,800 mm. See that each pipe is well-coated externally and internally with tar-based material. This coating is done by immersion process in the manufacturer’s factory. Manufacturer's mark, year of manufacture and internal diameter of the pipes are written on the pipes. Check the same. Year of manufacture is indicated by last two digits. So check for ‘06’ and not ‘2006’ when checking the year of manufacture. Simplest way to ensure good quality is to check their weight. If the weight is correct, thickness of pipes is correct. See that the pipes give a clear ringing sound when mildly hit by a light hammer.
Weight
Mostly, pipes of 50 mm (2 inch), 75 mm (3 inch) and 100 mm (4 inch) internal diameters are used in houses while 150 mm (6 inch) diameter pipes are required in large-sized buildings. Always check that internal diameter of the pipes is not lesser than required. Lesser diameter means substandard pipes. Such pipes create trouble in fitting. To ensure that the pipes don’t weigh less, following are the minimum weights of CI pipes: Diameter Length Min weight 50 mm 1,800 mm 11.4 kg 75 mm 1,800 mm 15.5 kg 100 mm 1,800 mm 21.7 kg 150 mm 1,800 mm 31.9 kg
Bends and cowls
A number of CI fittings are required for sanitary work. These include bends, collars, cowls, offsets, junctions, heel rest bends, inspection doors, equal branches, unequal branches, short radius and large radius bends. These fittings are available with or without inspection doors. The plumber will work out numbers as per pipes layout. However, initially, only a few fittings are required to fix up vertical pipes in the masonry. Look for IS 1729 marked fittings. Prefer to have pipes and fittings of the same manufacturer.
L&R fittings
While making list of fittings to be purchased, keep care of right and left hand fittings as per the location of fixtures. A bend or fitting is left-handed if the bend or arm is projecting to the left when viewed with spigot downwards and inspection door facing the viewer. While preparing the list, mention L or R with each fitting to bring in correct fittings and avoid the problem of exchange. Take care and happy building! — The writer is SE (civil), PSEB. He can be reached through www.jagvirgoyal.com
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From 3 to 7
India’s booming real estate sector has more than doubled the number of billionaires from this space in just 12 months, with DLF’s Kushal Pal Singh emerging “the world’s richest real estate developer.”
Among 54 Indian billionaires identified by Forbes magazine, there are seven real estate developers with a net worth of over a billion dollar each. A year ago, there were just three billionaires from this sector — K P Singh, Ramesh Chandra and Rajan Raheja — who have now been joined by Rakesh Wadhawan of newly-listed HDIL, Niranjan Hiranandani of London-listed Hirco, Parsvnath Developers’ Pradeep Jain and Omaxe’s Rohtas Goel. Singh, the wealthiest in this space, has been ranked as the fourth richest Indian with a net worth of $35 billion, according to Forbes’ India’s 40 Rich List for 2007. “Kushal Pal Singh is fourth on the 2007 India Rich List with a net worth of $35 billion making him the world’s richest real estate developer,” Forbes said. Singh’s wealth appreciated over 250 per cent after his company, DLF, went public in June this year and the stock has surged 60 per cent since then, it added. Unitech’s Ramesh Chandra ranks 8th with a net worth of $11.6 billion, followed by Wadhawan at the 26th spot with a wealth of $2.35 billion. Raheja and Hiranandani, real estate developers from the financial capital of India - Mumbai, rank 30th and 31st with a net worth of $2.15 billion and $2.1 billion, respectively. Although there are 54 billionaires in India according to Forbes, 14 of them could not make the cut for the India’s 40 richest list which required a minimum wealth of $1.6 billion. Pradeep Jain of Parsvnath Developers ranks 46th with $1.25 billion net worth, while Rohtas Goel of Omaxe is positioned at 48th place with $1.2 billion. Parsvnath and Omaxe are based in India’s capital New Delhi. Of the seven real estate companies that have entered the Forbes’ list, DLF, Omaxe and HDIL got listed in the Indian stock exchanges this year, while Parsvnath entered the stock market last year. — PTI
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Tricity acts pricey
Government agencies, like private entities, are tagging astronomical sums on plots and flats in Chandigarh and suburbs
The tricity of Chandigarh, Panchkula and Mohali have long had an image of being populated by the salaried classes but, going by the skyrocketing property prices, soon only millionaires will be living there. The latest schemes floated by the Haryana Housing Board (HHB) and the Chandigarh Housing Board (CHB) have only given a further push to the property boom in the tricity, home to about 1.5 million persons. While Chandigarh is the twin capital of Haryana and Punjab, Panchkula is in Haryana and Mohali lies in Punjab. The HHB has offered three- and four-bedroom flats for the middle-class for over Rs 3.4 million ($85,000) and Rs 5.2 million ($1,32,000), respectively. The flats are in Sector 20 of Chandigarh’s satellite town of Panchkula, 20 km from the city centre. “What are they trying to prove? Which salaried class man can buy a flat for that amount? With bank loans becoming difficult, things will only get more difficult. Are these flats targeted at the rich and money-spinners who will only keep getting richer?” asks private sector employee Dheeraj Bhanot. Interestingly, in the Chandigarh circle of income tax, comprising all these three cities, the total number of millionaires is barely 1,800. These are the people who have shown their income to be more than Rs 1 million annually. If the HHB has offered the “out of reach” flats, the CHB recently went into collaboration with private sector builder Parsvnath to offer luxury flats at the IT Park in Chandigarh. A one-bedroom studio apartment there was oversubscribed despite a price of Rs 5.25 million under the Parsvnath project, located between the city’s famous Sukhna Lake and nearby Shivalik hills. Bigger flats in the same project were priced at over Rs 10 million. The high point of property price in Chandigarh was the offer for a 500-square yard plot in the Parsvnath project at a whopping over Rs 60 million. Out of the 15 plots on offer, just under half found applicants. A 1,000-square yard plot, double the size of that in Parsvnath, in one of the central sectors of Chandigarh is available for Rs.60-70 million. “The government housing agencies, which are supposed to provide affordable housing, are themselves demanding commercial prices. Even private builders are not demanding that kind of money. Middle-class people cannot afford these flats,” a real estate consultant said. The CHB had four years ago floated two-bedroom flats in Chandigarh priced at Rs.3.2 million — much beyond the reach of the majority of salaried people. Another Haryana government agency — Haryana Urban Development Authority (HUDA) - is reaping gold these days with every scheme it offers. Last year, HUDA floated a scheme for 800 plots in various housing colonies across Haryana. Over 2.6 million applications were received for this. HUDA earned a handsome Rs 150 million from the application forms itself. Keeping the earnest money with it for six months before the allotment draw made HUDA richer by Rs 5 billion from bank interest alone - enough for the agency to carry out development works in new sectors. The high-priced flats being offered by the government have pushed up property prices in the open market. “It is better to be a slum dweller in Chandigarh. At least, after a few years, you will be rehabilitated by the government,” rues Vishal Sharma, referring to the rehabilitation of migrants in Chandigarh. — IANS
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