New RERA to be boon for buyers
BENGALURU: Land cheating cases are not new in a city like
Bengaluru. While most of the times there are reports of builders’ being
declared the accused, the landowners stay out of the picture. According to a
recent order by the Karnataka Real Estate Regulatory Authority (RERA), to bring
transparency in the real eBENGALURU: Land cheating cases are not new in a
city like Bengaluru. While most of the times there are restate sector,
landowners, who get a share of total revenue generated from the sale of apartments
or a constructed building, fall under the category of ‘promoter’.
The word ‘promoter’ is not properly defined in the Real Estate (Regulation and Development) Act 2016. While it may be common knowledge what the terms ‘landowner’, ‘builder’, ‘developer’ and ‘promoter’ mean, a clear definition was not mentioned. However, the term was believed to have been brought out because, in Bengaluru, many projects are joint development projects. In some cases, landowners could also be promoters of the projects.
RERA activist Bhagylakshmi Ayyar said the move to include
landowners to be held accountable for the ongoing projects may help buyers.
“There are cases wherein the landowners and the builder get into an agreement
to approach the court and delay the deadline to get a stay order purposefully
to continue receiving interest from the investors. This order will now hold
both parties responsible for the timely completion of the project,” she said.
After the new rules came in, 12-15 projects have been registered so far.
Vishnu Vardhan Reddy, a permanent member of the RERA board, said
these kind of cheating cases were quite common and civil courts must take
cognisance of these issues. “Many courts are still not aware of these issues.
So we discourage them from taking up cases of litigation between landowners and
builders where the project is registered under RERA,” he said.
A trend commonly observed was the collusion of farmers and
builders, said a senior police officer. “The builders take the land of say 20
farmers. They set the layout and make it attractive for the investors. Once
they have invested, the farmers file a petty case against the investors,
forcing the work to be stopped and the perpetrators enjoy the money along with
the interest,” the official saidAccording to the city’s crime record bureau,
there might be a slight decrease in cheating cases. Moreover, while cases have
reduced, there is an increase in the number of victims, senior officials said
India could be a winner in the US-China trade war
The largest national flag at Rajiv Chowk on March 7, 2014 in New
Delhi, India.
India could benefit from the fallout in the U.S.-China trade
war, experts told CNBC — but much-needed reforms on land and labor could prove
to be a challenge for companies trying to do business there.
Trade tensions between Washington and Beijing have caused some
manufacturers to shift production out of China, to avoid higher tariffs.
As a result, Southeast Asian nations, such as Vietnam, have often
been cited as winners in the trade shifts. India could be a beneficiary too.
″India could increase its trade footprint in (the) midst of the
US-China trade conflict, particularly under categories on which US has imposed
tariffs on China," Radhika Rao, an economist at Singapore bank DBS Group,
wrote in an August report.
"Apart from trade, diversion in investment flows is an
opportunity that India could benefit from, as manufacturers seek alternative
origination destinations," Rao added, implying it could attract foreign
investments into the country.
India's share of the global export market is relatively small.
Even though Germany's population is nearly 16 times smaller than
India's, German exports made up 8.17% of the world's total trade flows in 2017.
Comparatively, Indian exports accounted for only 1.68% of world trade that
year.
Winning sectors
The top three sectors in India that could benefit from the trade
war are: pharmaceutical, chemicals and engineering, Rao told CNBC in an email.
India is already competitive in these industries globally and
will likely be well-placed to meet further demand in these areas, she noted.
India needs to move fast, through innovative policies and clear
focus on infrastructure development ... But lot more remains to be done and
done urgently.
The South Asian nation's pharmaceutical industry supplies over
half the world's vaccine demand, and 25% of medicines in the United Kingdom,
according to a July 2019 report from the India Brand Equity Foundation (IBEF).
On the engineering side, India was the world's 12th largest
producer of machine tools in 2017, a separate IBEF report said. The country
also exports more than 60% of its engineering goods to the U.S. and Europe.
The manufacturing sector may benefit too — particularly the
textiles, footwear and electronics sectors, said Rajiv Biswas, Asia Pacific
chief economist at IHS Markit, in an email.
That's because exports from the U.S. and China will become more
expensive as the tariffs kick in, and some manufacturers may move production to
other Asian countries — including India.
"India may be able to benefit from this trend over the
medium term, with global manufacturers increasingly focused on the rapidly
growing Indian domestic consumer market," Biswas said.
For instance, Taiwan's Foxconn — the largest electronics
contract manufacturer in the world, which assembles Apple products — moved
production into India from China this year. This was to "diversify their
manufacturing supply chain away from excessive reliance on Chinese
production," said Biswas.
The Indian economy could benefit by $11 billion from these trade
shifts, Rao wrote in the report, citing estimates by the United Nations
Conference on Trade and Development.
Challenges for businesses
Businesses in India face two key challenges: land laws and labor
regulations.
Land laws are the "biggest hurdle" for manufacturing
and infrastructure development, said Societe Generale economist Kunal Kundu in
a note to CNBC.
Current land laws make it difficult for the private sector to
obtain space for manufacturing units, he said.
That's because land ownership is fragmented across several
states, and companies need extended periods of time to obtain land, or bypass
legal issues that may crop up.
Indian technicians check mobile phones at the Chinese Celkon Manufacturing plant on the outskirts of Hyderabad, India on June 26, 2015.
Another problem is that labor laws in India are "extremely
complex," noted Kundu. They comprise about 40 acts and companies are
required to adhere strictly to all of them. This makes it difficult for
manufacturers.
Land and labor reforms are two of the "most important
factors of production" needed, according to Kundu.
Hence, he recommended, a national employment policy should be
formulated — particularly one that allows manufacturers to make labor redundant
during business down cycles.
Attracting investors
The lack of proper infrastructure could also be a problem,
Nomura economist Sonal Varma told CNBC.
That includes connecting manufacturing plants to proper roads
and ports, as well as ensuring that power is available.
The government has been seeking to improve some of these
policies, but it will be some time before they can be fully realized. It is
also trying to boost infrastructure and foreign investment in India through a
multi-billion dollar budget.
Recent policy reforms in August were seen as a step forward for
investment. For instance, the government approved 100% foreign investment in
coal mining, and eased rules in contract manufacturing and retail.
"India needs to move fast, through innovative policies and
clear focus on infrastructure development ... But (a) lot more remains to be
done and done urgently," Kundu said.
More changes to existing laws are needed before India can reap
the full benefits of these investments to boost the economy.
As India is a big country, a lot of laws are controlled by the
state government — not by the central government, Varma said. "The changes
need to be not just ... top down from the central government, but also bottom
up from different state governments."
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