A day after introducing the long-pending GST Bill in the Lok Sabha, Finance Minister Arun Jaitley on Saturday (20 December) said the government is "extremely determined" to push insurance sector reforms and will not allow political obstructionism to stop it."The government is extremely determined to go ahead with this (insurance sector) reform and will not allow a Parliamentary disturbance to obstruct or delay a reform of this kind," he said while addressing a Ficci function.Without naming Trinamool Congress, Jaitley said that the political party, whose members are allegedly involved in chit fund scam, is trying to divert the attention by creating obstruction in the functioning of Rajya Sabha where the ruling NDA does not have a majority of its own. Read Also: WIll Modi Go The Ordinance Way?The Minister regretted that although the insurance bill, which seeks to raise FDI cap from 26 per cent to 49 per cent, was approved by Standing Committee of Parliament and Select Committee of Rajya Sabha, "political obstructionism is being used to ensure it does not come on the agenda of Parliament."Observing that such attitude cannot stop a reform which has support of overwhelming majority, Jaitley said, "there are enough safeguards, and constitutional system can deal with and effectively defeat this policy of political obstructions."Jaitley said that with more and more state assemblies going to polls, the ability of the members in the Rajya Sabha to create obstruction will get "further diluted."Coal bill is another important legislation which is being held up due to political obstructionism in the Rajya Sabha, he said, adding "it is a bill which has been unanimously passed by the Lok Sabha. All doubts have been cleared. It was not allowed to come on the agenda of Upper House for discussion."After prolonged delay, Jaitley yesterday introduced the GST bill in Lok Sabha, which will create a single tax for goods and services across the country from April 2016.Jaitley said coal is the other important reform that the new government is pursuing, but is "held back because of political obstructionism"."The whole object seems to be don't allow these legislations to come up for debate...And the reason for political obstructionism is one political party finds its members involved in something which is unsavoury and therefore to divert attention from that use obstructionism as an instrument," he said.He also took a jibe at left parties, saying Rajya Sabha seems to be their last bastion.Legislative business has been affected in the Upper House for the past few days because of stand off between opposition and government over the religious conversion issue. Opposition is demanding reply on the matter from Prime Minister Narendra Modi, which is not acceptable to the government.The Finance Minister, who would be presenting his first full budget in February, also said there is a need for a shared national vision because that is what the country needs to get back to 9-10 per cent growth rate."The clear choice before us is, either we reform or we miss the bus once again. The new government... are absolutely clear about one fact that the course that we have adopted is unalterable and therefore despite various challenges which are thrown our way, we are extremely clear about the direction which we have to follow...," he said.Referring to taxation, Jaitley said the new government has "eliminated" the fear of retrospective taxation which had brought a bad name for the country."There is slowdown in very large part of the world, investors are looking to come into India. We still have a large number of areas where we have to reform and therefore for the next decade we can have an agenda full on our table," he said.Jaitley further said the next fiscal is going to be a challenging one as the country strives for higher growth."It is a year where we have to first cross the 6 per cent mark in terms of growth rate, improve upon our revenues, give a greater life as far as our citizens are concerned and in that environment of enthusiasm that is created, more and more changes that will lead us to double digit target," he said.Jaitley said the Prime Minister himself is looking into the stalled projects to fast track them.(Agencies)
Read More
India's Oil and Natural Gas Corp and Venezuela's state oil company PDVSA are seeking around $1 billion in credit to stem an output decline at their San Cristobal joint venture, two sources close to the negotiations said. Indian banks are poised to lend the money to the joint venture, the sources said, though ONGC would provide the guarantee and the breakdown of the loan's repayment has not yet been decided. The deal is expected to ensure state-owned ONGC receives between $400 million and $500 million of unpaid dividends that have accrued over five years. "This could come together next year," one of the sources said of the deal, which seeks to stem San Cristobal's production fall from a peak of over 40,000 barrels per day to around 30,000 bpd. It is also likely to involve creation of an offshore account, probably in Asia, to receive the export income, guaranteeing ONGC will receive money. With oil prices tumbling, the likely deal underscores a broader shift toward pragmatism in financially-strapped PDVSA under new boss Eulogio Del Pino. The sides have negotiated for more than a year and are close to a deal to overhaul wells, machinery and other items over three to four years to shore up output and change the terms of sales. Crude would be sold to a handful of buyers, likely Indian and Asian, under 10-year agreements, one source said. The offshore account "will be a like a waterfall mechanism, whereby the revenue from the project ... will then be distributed among partners," said the second source. Venezuela awarded ONGC its stake in the field in 2008. Under the venture's original terms, India's largest oil and gas explorer is due to receive dividends, though it does not control the crude's marketing or receive revenue from sales. Both sources declined to be identified because of sensitivity of the issue. ONGC Videsh Managing Director N.K. Verma declined to comment. PDVSA did not respond to a request for comment. Joint Venture PainsAs of the close of 2013, PDVSA says, it owed around $2.5 billion dollars in dividends to joint venture partners. The company has sought creative solutions to the dividends issue, and has paid back some debts to contractors, according to industry sources. Fresh investment could help Venezuela, home of the world's largest crude reserves, shore up flailing oil production. For years, the country has been pressuring some 20 joint ventures between PDVSA and foreign partners to find extra funding. The socialist government has threatened to cancel the ventures' permits if they fail to reach higher goals. Financing deals estimated to be worth $9.25 billion have been taken out for investment in the JVs in the last two years or so. A major agreement with Chevron secured $2 billion in financing to boost production at the Petroboscan JV. The China Development Bank approved a $4 billion credit for the Petrosinovensa JV with China National Petroleum Company. Deals have also been reached with Russian and other JV partners. ONGC Videsh, ONGC's overseas investment arm, has a 40 percent stake in the San Cristobal oilfield. PDVSA subsidiary CVP has the rest. (Reuters)
Read More
It was a bad day for Indian financial and currency markets on Tuesday (16 December) as the market benchmark BSE Sensex plunged by 538 points to register its worst single day loss in 16 months and close below 27,000-mark as foreign investors, already confounded ahead of a crucial US Fed meeting, as well as spooked by a rate hike in Russia amid sinking oil prices. The Indian rupee on the other hand, plummeted to 13-month low of 63.53 against dollar due to heavy demand for the US currency from importers and some banks amid falling oil prices and chaos in stock markets.Dealers in foreign exchange said the Reserve Bank may have intervened in the markets but it seemed dollars selling through state-ran banks did not pay off.They also predicted that the rupee is likely to breach the 64-mark as early as tomorrow. It finally ended the day at 63.53, a fall of 59 paise or 0.94 per cent. This is the worst single day loss for the domestic currency in more than four months.The rupee had tumbled by 65 paise yesterday.Meanwhile, Commerce Secretary Rajeev Kher said the government would get uncomfortable if the Indian currency stays for long at this point."The exchange price has come down to 63. As the Secretary of the Department of Commerce I feel that the rupee if it goes further down, or stays for too long at this point, it should give me a reason to feel a little concerned," he said.Traders said domestic concerns like widening trade deficit and free-fall of rupee also added to worries of FIIs who booked profit across sectors. The domestic currency tumbled by 59 paise to 13-month low of 63.53.The 30-share BSE index resumed the day sharply lower in line with weak Asian cues and remained under selling pressure throughout the day. It finally closed at at 26,781.44, a steep fall of 538.12 points or 1.97 per cent.The previous worst single day loss was logged on September 3, 2013 when Sensex tanked by 651.47 points.Selling pressure was so intense that 10 out of 12 indices ended the day with losses in the range of 1.44 per cent and 4.17 per cent, with metal, realty, FMCG, banking, consumer durable, healthcare and power being the worst hit.Shares of software exporters, which would benefit from rupee fall, ended higher along with and teck firms.Sesa Sterlite was the biggest loser among 30 Sensex stocks at 7.77 per cent. Dr Reddy's tanked 6.32 per cent, Hindalco lost 5.67 per cent and SBI 4.66 per cent.Tata Power (4.59 pc), ICICI Bank (4.30 pc) NTPC (3.20 pc), ITC Ltd (3.13 pc), Tata Steel (2.82 pc) and HDFC Ltd (3.11 pc) were the other big loers.TCS notched up a gain of 3.40 per cent, while Infosys was up by 0.69 per cent."Weak Asian markets, poor economic indicators from the domestic economy, liquidity roll-back fears due to Fed meeting and surprise rate hike by Russian central bank kept the global markets in turmoil for the day," said Rakesh Goyal, Senior Vice President, Bonanza Portfolio.Bank of Russia raised key interest rate to 17 per cent from 10.5 per cent in a desperate move to boost its currency and rescue troubled economy. Rouble's value has sunk roughly 50 per cent since January, battered by Western sanctions.Analysts said Russia's economy is highly dependent on petroleum revenues. The average price of a barrel of oil has dropped below USD 56 down from high of USD 107 a few months ago, the added. (Agencies)
Read More
The Cabinet on Wednesday (10 December) approved the insurance amendment bill with a composite foreign investment cap of 49 per cent for presenting it in Parliament, incorporating the changes suggested by a House panel. The Cabinet, headed by Prime Minister Narendra Modi, approved incorporation of amendments suggested by a Parliamentary select panel in the Insurance Laws (Amendment) Bill, 2008, sources said. The Rajya Sabha is likely to take up the Bill for consideration and passage next week. Earlier during the day, the Select Committee in its report to the Rajya Sabha had suggested hike in composite foreign investment limit in insurance sector to 49 per cent which would include Foreign Direct Investment (FDI) as well as portfolio investment. At present only 26 per cent FDI is allowed in private sector insurance companies. The hike in foreign investment limit is estimated to attract about Rs 25,000 crore of overseas funds in the sector. In another development, the government allowed public sector banks to raise up to Rs 1.60 lakh crore from markets by diluting government holding to 52 per cent in phases so as to meet Basel III capital adequacy norms."The quantum of capital support needed by banks is huge, which cannot be funded by budgetary support alone," an official statement said, detailing the decision taken by the Cabinet to allow PSBs to raise equity capital from market.The Cabinet asked the PSBs to broadbase retail shareholding while going in for the fund raising.Out of 27 PSBs, Government of India controls 22 through majority holding. In the remaining 5 banks, state-run SBI holds majority stake."If the PSBs are permitted to bring down Government holding to 52 per cent in a phased manner, they can raise up to Rs 1,60,825 crore from the market," it said.The Basel III norms, which will come into effect from March 31, 2019, were put in place following the 2007-08 financial crisis triggered by the fall of Lehman Brothers.The norms are aimed at improving risk management and governance while raising the banking sector's ability to absorb financial and economic stress.As per Basel-Ill norms, the minimum Tier-1 has to be 7 per cent.The total support provided to PSBs towards capitalisation during the past four years was Rs 58,634 crore, the statement said, adding the provision for the current year is at Rs 11,200 crore.The total market cap of Government shareholding as on May 2014, stands at over Rs 4.19 lakh crore. There are over two dozen PSBs and government holding in them is between 56.26 per cent to 88.63 per cent.Public sector banks require equity capital of Rs 2.4 lakh crore by 2018 to meet Basel III norms.GoI budgetary support needed for 2015-19 would be Rs 78,895 crore, which will maintain government holding at 52 per cent, the statement said.However, as Government is likely to receive an amount of Rs 34,500 crore from PSBs as dividend, the net outgo will only be Rs 44,395 crore, it added."Going by past trends if we take average Gross Domestic Product (GDP) growth rate for the next five years as 6.5 percent and dividend pay-out ratio as 20 per cent as percentage of net profit or 0.80 of risk weighted assets (RWAs) and credit growth rate at 18 per cent and further RWAs growth at 16 per cent, the total capital would be over Rs 4.60 lakh crore," the statement said.(Agencies)
Read More
Oil prices fell to fresh five-year lows on Tuesday (9 December), prompting investors rattled by worries over global growth and renewed political uncertainty in Greece to dump shares.European shares hit a two-week low on Tuesday, with a further slide in crude oil prices hitting energy stocks. Greek stocks sank 6.6 percent, a day after the government announced it would bring forward a presidential vote by two months. Greek banks fell sharply, with National Bank of Greece down 8.8 percent and Alpha Bank dropping 7.9 percent. Greek government bond yields soared.Globally, Chinese shares were standout losers, notching up their biggest daily percentage loss in more than five years and reversing a two-week rally.In India, the benchmark Bombay Stock Exchange (BSE) Sensex slipped below the 28,000 level and the National Stock Exchange (NSE) Nifty dropped below the 28,000 mark at midsession as funds and retail investors indulged in selling activity amid weak global cues after crude oil dipped to fresh five-year lows.After opening in negative terrain on continued selling activity by participants, the Sensex dipped below the psychological 28,000-mark to touch a low of 27,869.92. It, however, recovered marginally to 27,911.35, down by 208.05 points, or 0.74 per cent at 1330 hours.Major losers that pulled down the Sensex and Nifty from crucial levels were Sesa Sterlite, Tata Power, NTPC, Hindalco, Bhyarti Airtel, ONGC, Tata Steel, BHEL, SBI, Axis Bank, L&T, Tata Motors, Maruti Suzuki, Coal India, RIL and Cipla.Swelling Supply Glut Pulls Down OilBut the key action was in oil. Brent crude fell as low as $65.29 a barrel in Asian trade, its lowest since September 2009, on concern over a swelling supply glut.Brent, which has fallen some 40 per cent in the last six months, was last trading at $66.29 per barrel.European shares opened lower, following falls in stocks in Asia and on Wall Street on Monday.The pan-European Eurofirst 300 was down 1.3 per cent, hit by energy shares and after British grocer Tesco cut full-year profit expectations by almost a third."European markets are trading lower and following the sell off on Wall Street, as oil prices continue to stay under pressure. Investors are worried that there is no floor in sight for the crushing oil prices." Naeem Aslam, analyst at Avatrade, said in a note.Tokyo's Nikkei stock index close down 0.7 per cent, pulling away from 7 1/2-year highs as the stronger yen prompted investors to take profits on exporters.In the United States, the S&P 500 suffered its worst day since Oct. 22 as the falling oil price hit energy stocks.Shanghai shares dropped more than 5 per cent, dragged down by the financial and property sectors, for their biggest one-day percentage fall since August 2009.Dollar PullbackThe dollar fell 0.9 per cent to 119.62 yen, pulling away from a seven-year high of 121.86. The yen was up 1.1 percent against the commodity-linked Australian dollar, which earlier set a four-year low against the U.S. currency."People are cutting the higher-yielding currencies which they've been funding through being short yen and that position is being reversed somewhat, which is manifesting itself in a much lower dollar/yen," said Neil Jones, head of FX hedge fund sales at Mizuho bank in London.The dollar had earlier gained on a Wall Street Journal report that Federal Reserve officials were considering dropping an assurance that short-term interest rates would remain near zero for "a considerable time" at its policy meeting on Dec. 16-17.The euro strengthened 0.3 percent to $1.2354 as the greenback dropped a similar amount against a basket of currencies.German 10-year government bond yields, the euro zone benchmark, fell 2.4 basis points to 0.70 percent, just above a record low.The weaker dollar pushed gold above $1,200 an ounce. It was last up 0.3 percent at $1,206.10.(Agencies)
Read More
The Reserve Bank of India (RBI) held interest rates steady as widely expected at a policy review on Tuesday, and said it could ease monetary policy early next year provided inflationary pressures do not reappear and the government controls the fiscal deficit. Uneasy over India's weak recovery from its slowest phase of growth since the 1980s, the six-month-old government of Prime Minister Narendra Modi had been seen as favouring an early reduction in rates, but RBI Governor Raghuram Rajan said containing inflation was a prerequisite. "What again and again we have seen in India, and outside India also, is that the way to sustainable growth is to have moderate inflation," Rajan told a news conference. Forty-one of 45 economists polled by Reuters had forecast that the RBI would keep the repo rate at 8.00 per cent, while four had expected a reduction of 25 basis points. The RBI's next policy review is in early February, and most analysts had expected the central bank would either cut interest rates then or wait until April. Highlights of RBI's Statement- Short-term lending (Repo) rate unchanged at 8 per cent- Cash reserve ratio (CRR) unchanged at 4 per cent- Statutory Liquidity Ratio retained at 22 per cent to unlock banking funds- GDP growth for current fiscal estimated at 5.5 per cent- Projects retail inflation at 6 per cent by March 2015-end- Projects retail inflation to lower in November, rise again in December- Says change in monetary policy stance at the current juncture is premature- Weak revenue realisation a threat to fiscal deficit target- Next bi-monthly policy statement on February 3 "A change in the monetary policy stance at the current juncture is premature," the RBI said in its statement. "However, if the current inflation momentum and changes in inflationary expectations continue, and fiscal developments are encouraging, a change in the monetary policy stance is likely early next year, including outside the policy review cycle." India's benchmark 10-year bond yield fell 5 basis points on the day to 8.01 per cent as investors cheered the central bank's more dovish stance. Capital InvestmentIn its statement, the RBI spoke of the need to revive capital investment, and called on the government, which will announce its budget in February, to "stay on course" to meet fiscal deficit targets. Those targets have been jeopardised by weak tax revenue growth and the slow pace in selling off stakes in state-run companies to raise funds. Data released on Friday showed economic growth slipped to 5.3 per cent year-on-year in the July-September quarter, down from 5.7 per cent in the previous quarter. India needs far faster growth to create jobs for all the young people joining its workforce in coming years. "Things will not pick up just because of rate cuts," said J. Venkatesan, an equity fund manager for Sundaram Asset Management in Chennai. "A strong reforms push is needed to revive economic growth. That is where the cycle had got stuck." Helped by tumbling oil prices, India's annual consumer price inflation (CPI) slowed to 5.52 per cent in October, sharply down from a peak of 11.16 per cent struck in November last year, but the RBI warned that it expected inflation to rise in December as a favourable base effect wanes. The RBI has targeted CPI at 6 per cent for January 2016, and the central bank said risks to the target "appear evenly balanced under the current policy stance." Rajan said if that target was achieved the RBI would then aim for a longer term inflation target of 4 per cent. While there were few expectations that the RBI would cut interest rates this time, officials had told Reuters last week that Finance Minister Arun Jaitley would press Rajan for a reduction when they held a customary meeting before the policy review - though there was no confirmation that meetng took place. The central bank is not statutorily independent from the Finance Ministry, but it enjoys broad autonomy in setting monetary policy, though there are plans to amend the RBI Act and incorporate a monetary policy committee that gives voting rights to officials both within and outside the central bank.
Read More
Gold prices tumbled on Monday after Swiss voters overwhelmingly rejected proposals to boost gold reserves in a referendum, joining the broad rout in commodities that sent oil prices to five-year lows and copper to four-year lows. Sinking oil and commodity prices are causing massive realignments in markets, hurting assets tied to the resource sector, from Australian mining shares to the Malaysian ringgit, while benefiting importers such as Japan and China. MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.0 per cent, with resource-heavy Australian shares hitting a six-week low. Gold fell more than two per cent at one point to $1,142.90 per ounce, its lowest level in more than three weeks, while silver also took a hit, falling more than six per cent to a five-year low below $14.50 per ounce. The Swiss measure, had it been approved, would have compelled the Swiss National Bank (SNB) to more than double its gold reserves and banned it from ever selling the metal, threatening its ability to defend a 1.20 euro cap on the Swiss franc imposed at the height of the euro zone crisis. The Swiss franc dipped to 1.2042 on the euro from 1.2018 at the end of last week, though the Swiss currency is supported by investors who still regard it as one of the safest currencies in the world. It last stood at 1.2036. "The result should of course temporarily relieve the pressure on the SNB's currency floor, albeit whilst doing little or nothing in our opinion to reverse the fundamental downward trajectory of EUR/CHF," said JPMorgan analyst Paul Meggyesi. Oil prices hit five-year lows, unable to find a bottom despite their biggest fall in 2 1/2 years last week after OPEC held back from cutting output in the face of a supply glut. US crude fell more than two per cent to a five-year low of $64.10 per barrel, with the fall from June exceeding 40 percent. Copper also fell to as low as $6,230.75, piercing below its March low to hit its lowest levels since mid-2010. The Australian dollar fell more than one percent to a four-year low, of $0.8417, and so did the Malaysian ringgit, which fell to 3.424 to the dollar. Adding salt to commodities' wounds, Chinese official manufacturing data suggested growth is slowing in China, demand from which has supported commodity prices for years. Sliding oil and raw material prices have stirred deflation fears in the euro zone and Japan, cementing expectations that the European Central Bank and the Bank of Japan will take more steps to support their respective economies. The dollar, taking advantage of such concerns, attracted bids against the euro and yen. The euro was slightly weaker at $1.2437 after having fallen on Friday on data showing annual inflation in the euro zone cooled to five-year lows of 0.3 per cent in November. Many traders expect the ECB may signal further action later this week to ward off deflation. The dollar also hit a seven-year high of 119.03 yen and the dollar index, which measures the greenback against a basket of major currencies, rose to 88.451, a four-year high. "Given that the Fed is going to raise rates next year, the monetary policy divergence should support the dollar," said Osao Iizuka, the head of FX trading at Sumitomo Mitsui Trust Bank. The yen's fall and lower commodity prices helped Japanese shares, with the Nikkei rising to seven-year highs. Mainland Chinese shares also gained, with Shanghai Composite Index hitting a three-year high. (Reuters)
Read More
A Supreme Court order scrapping most coal extraction permits given to companies would have a likely impact of 964.84 billion rupees ($15.6 billion) on state-run lenders, the junior finance minister told parliament on Friday. The government had deduced the impact of the cancellation of the so-called coal block allotments on banks due to likely stoppage of power production, Jayant Sinha said in a written reply to a lawmaker question on bad loans for state banks due to the verdict. It was, however, not clear whether he was referring to an increase in bad loans or loan exposure of banks to affected companies. Bankers and analysts have previously said it was difficult to quantify the increase in bad loans as the scrapped coal blocks will be returned after March and as all the loans to the affected companies may not turn sour. Sinha said bad loans of state lenders were a provisional 5.32 per cent of total loans as of end-September, while that of private sector lenders was a provisional 2.04 per cent. Bad loans of state banks in coal industry was 0.23 per cent as of end-September, while for private banks it was 0.22 per cent. The government is considering a proposal to re-introduce a bill that seeks to set up an independent coal sector regulator. The Coal Regulatory Authority Bill, 2013, had been introduced in the Lok Sabha but it lapsed with the dissolution of the 15th Lok Sabha on May 18. (Agencies)
Read More
Mumbai-based SBI Funds Management will launch an Islamic equity mutual fund next month to tap into India's large but underserved Muslim population, although the country still lags in developing sharia-compliant debt alternatives. India's 175 million Muslims, the largest Muslim minority population in the world, are unable to use Islamic banks because of laws requiring banks to charge interest, which is forbidden in Islam. This policy has persisted since 2005, when the Reserve Bank of India (RBI) set up a committee to study Islamic finance, although equity products have fared better and the sector could now get a fresh push with its latest entrant. SBI Funds Management, the sixth largest fund house in India with $11.8 billion in assets under management, will use the fund to decide if it should launch other Islamic products in the future. "We don't have any targets on how much we expect to raise, but since it is an open-ended fund we expect to continue seeing new subscriptions over time," said D.P. Singh, executive director and chief marketing officer of SBI Funds Management. "This is a niche product and we will see what kind of interest we get and maybe look at launching a bouquet of similar products if there is demand." SBI Funds Management, a joint venture between asset manager Amundi of France and the State Bank of India, would join the local fund management arms of Tata, Taurus and Goldman Sachs in offering such funds. Islamic fund managers screen their portfolios according to religious guidelines such as bans on tobacco, alcohol and gambling, in much the same way as socially responsible funds. Such investment products, regulated by the Securities and Exchange Board of India, are based on Islamic equity indexes, with SBI's fund benchmarked to the S&P BSE 500 Shariah Index launched in May 2013. In August last year, the RBI allowed a firm in Kerala to operate as a non-banking financial company that follows Islamic principles, but there has been little progress to develop Islamic banking operations across the country. Analysts believe that unless full-fledged Islamic banks are permitted in India, the sector will find it hard to develop. As of October, the Tata Ethical Fund - the oldest and largest sharia-compliant fund in India - held 2.24 billion rupees ($36.2 million) in assets under management, according to the fund's fact sheet. (Reuters)
Read More
The government plans to offer interest subsidy on housing loans to help poor section buy homes and boost real estate demand.Addressing the realtors' body CREDAI conclave, Minister for Housing and Urban Poverty Alleviation Venkaiah Naidu said the Real Estate Development and Regulation Bill would soon come up in the Cabinet for approval and hoped that at least by the Budget session, the proposed law would become a reality."We are coming out with an interest subvention scheme for the housing sector for the economically weaker section (EWS) and lower income group (LIG) people and also partly to lower middle class people," Naidu, who also holds the portfolio of Urban Development, said on the sidelines of an event.He said the government is moving towards reduction in interest rates, which are difficult to manage currently.Asked about timeline, the Minister said when the new housing policy will be launched, the interest subvention scheme will be a part of it.According to government estimate, the housing shortage was 18.78 million units in 2012, out of which 95 per cent was in EWS/LIG category.Real estate sector is facing a huge slowdown in demand due to high interest rate regime and skyrocketing property rates.Responding to realtors' demand for single-window approval, he said the procedures for getting the approvals, particularly related to environment and aviation clearances, would be simplified and fast-tracked.On the Real estate regulatory bill, Naidu said it is at the "final stage of consultation"."I have gone through it personally. We have taken the views of various stakeholders including real estate sector.Then we will go to the Cabinet shortly. Once the cabinet approves, I am hoping we will get early clearance, then we will go to the Parliament."If not this session, at least by the budget session the Real Estate Development and Regulation Bill will be a reality," Naidu said. "There will be no strangulation, only regulation. It will be a people friendly and construction sector friendly bill. In a democracy, regulation is required," Naidu said, adding that the state governments would get the freedom to frame rules under the Act, when it is passed by the Parliament.The Real Estate regulatory bill, which was introduced in Rajya Sabha in August last year, seeks to protect home buyers from unscrupulous developers. In February this year, the Standing Committee submitted its report.The Bill provides for mandatory registration of all projects, besides mandatory disclosure of information like details of promoters, layout plan, land status, schedule of execution, status of various approvals and carpet area.The Bill seeks to enforce the contract between the developer and buyer and provides for quick remedial measures in case of disputes.(Agencies)
Read More
