Ease of Doing Business Ranking by World Bank

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India was ranked 142nd in the World Bank’s ‘ease of doing business’ ranking in 2014, when the Narendra Modi government took office. It improved  to 130 last year, and this year, India has jumped 30 places to achieve the 100th rank. As Indians, we all should be proud about having achieved this significant shift, which rides on the back of reforms in taxation, construction permits, investor protection and bankruptcy resolution. The positive impact of this was seen in the government statement, which spoke about continuing reforms which would will help India break into top 50 in coming years. This implies a huge challenge for all of us – for the government to keep up the momentum of reforms and for business organizations to work within the new regulatory regime. The challenge also lies in ensuring not just the execution with positive intention but also the clear direction by the Prime Minister and the Government.

While reforms are a result of policies adopted since 2003, it is the aspect of execution, which happened in past four years, which show positive intentions of the Narendra Modi lead NDA Government. These have helped enhance India’s image in the world of Global Business, has brought about a change in perception. We have witnessed enhanced FDI flow, which reflects positive change as regards the perception about ‘ease of doing business’ in India.

India’s demographic variation has been a big asset contributing to the nation’s growth cycle in form of multiple markets, multiple consumption, multiple demand which in turn, has attracted foreign players to cater each and every segment. In sync with this, the Indian economic growth cycle is all set to embark on a new journey, with the “Reboot India” wave  – focus on digitization, boost to infrastructure, the ambitious goal of ‘Housing for All by 2022’, recapitalization of banks, reduced number of as also easier and quicker clearances – these are major contributors to economic reforms, and enhance the aspect of ‘ease of doing business’.

India is the only large country this year, in the World Bank’s ‘ease of doing business’ ranking, to have achieved such a significant shift, from 130 to 100. If there is a positive impact, there also has to be a word of appreciation for the stable government as also all the reform policies introduced. Prime Minister Narendra Modi reacted by saying the Indian Government is determined to further improve the rankings and scale greater economic growth with the Mantra of ‘reform, perform and transform’. We hope India continues to move upwards in the rankings – and achieves the target of moving upwards to top-50 ranking.

~ Dr. Niranjan Hiranandani is Founder & CMD, Hiranandani Group. His recent initiative is Hiranandani Communities. He is also President, National Real Estate Development Council (NATION), which works under the aegis of Ministry of Housing & Urban Poverty Alleviation, Government of India.

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‘As Moody’s upgrades India’s rating, reforms set to foster sustainable growth’: Dr. Niranjan Hiranandani

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MUMBAI 2017: Global ratings agency Moody’s Investors Service raised India’s sovereign credit rating to ‘Baa2’ from ‘Baa3’. Moody’s also changed its rating outlook to stable from positive, explaining that at the ‘Baa2’ level, the risks to India’s credit profile were broadly balanced.

It is extremely positive international recognition for India after undergoing various revolutionary reforms introduced in NDA regime over past few years. The economic reforms such as improvement to the monetary policy framework, address issues of NPA’s, recapitalisation, Insolvency & Bankruptcy law, fiscal consolidation framework, GST has brought in much required push in the productivity, improvised business climate ultimately fostering strong and sustainable growth of Indian economy. Government’s reform programme will surely reap the benefits once the smooth implementation is focused upon.

We congratulate Hon’ble Prime minister Shri Narendra Modi on giving this upgrade to the economic credibility of India. Describing the upgrade as a development it will reduce the cost overseas borrowing and improve investments in India’, Dr. Niranjan Hiranandani, CMD, Hiranandani Communities and President, National Real Estate Development Council (NAREDCO)pointed out that the rating upgrade had come after a long spell  of 13 years. He further added, “Continuous progress on economic and institutional reforms will enhance the India’s high growth potential, overseas borrowing by Indian companies is set to get cheaper. It is also expected that foreign investors will be positively inclined to invest more in India with robust growth story”.  

Emphasis on robust infrastructure and rural development spend will sustain thr growth story. Indian companies are set to benefit from rating upgrade as investors would be keen to lend money. Lower cost of borrowings will help govt to maintain fiscal discipline and Indian companies will be able to reap the benefits of lower cost of borrowings.

Thus upgrade in India’s global rating is very heartening indication of resilient and robust Indian financial system poised to strengthen growth. This will act as a further boost to the goal of Housing for All.

“RBI reduces asset provisions, lowers risk weights, effectively makes home loans cheaper,”: Dr. Niranjan Hiranandani

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MUMBAI, 2017: The six-member Monetary Policy Committee (MPC) headed by Reserve Bank (RBI)  Governor Urjit Patel which met on June 6 and 7 for the Second Bi-monthly Monetary Policy Statement for 2017-18, reduced the standard assets provisions on individual housing loans to 0.25 per cent and also lowered the risk weights on such lending. “The RBI move, which reduces provisions and risk weights will make home loans cheaper,” said Dr Niranjan Hiranandani, CMD, Hiranandani Communities.

During the previous monetary review in April, the RBI had maintained status quo as regards rates. Despite that, banks have recently reduced interest rates on home loans. “In line with these reductions, the move on part of the RBI, reducing asset provisions and lowering risk weights – as Governor Urjit Patel mentioned – is a part of the RBI and the Indian Government’s attempts of ‘targeted interventions’ which should help boost growth numbers. It is a positive move,” said Dr Niranjan Hiranandani.

The standard asset provisions, or the amount of money to be set aside for every loan made, has been lowered to 0.25 per cent from the earlier 0.40 per cent, which will help reduce the interest rates on home loans. “The RBI also eased the risk weights for certain categories of loans, which will help banks on the capital adequacy front, and enable them to give more home loans,” he added.

From the perspective of the real estate industry, Dr Niranjan Hiranandani said any rate cut by the RBI would obviously, have boosted sentiment and had a positive effect on sales of residential real estate. “That being said, the RBI maintained a ‘status quo’ during the monetary policy review, but it has relaxed the loan to value ratio, standard asset provisioning and risk weight for individual housing loans,” said Dr Niranjan Hiranandani.

“Those looking to buy a home for end-use should make the most of the RBI move and opt for a home loan. With banks and HFIs reducing home loan interest rates, and the RBI in turn reducing provisions, risk weights – effectively, making home loans even more affordable, it would be the right time,” concluded Dr. Niranjan Hiranandani.

~ Dr Niranjan Hiranandani is Founder & CMD, Hiranandani Group. His recent initiative is Hiranandani Communities. He is also Founder and First President, National Real Estate Development Council (NAREDCO-WEST), which works under the aegis of Ministry of Housing & Urban Poverty Alleviation, Government of India.

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With RBI cutting repo rate, fence sitters should step forward and make their ‘home buy’ decision

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MUMBAI,  2017: The aspect of Inflation being under control; and at an all time low at 1.54 per cent, logically, would support the aspect of it being the right time to lower interest rates. Given macro-economic data which showed inflation at a record low; as also factoring in the impact of the fall in factory output, the Reserve Bank of India (RBI) reduced the short-term lending rate (repo rate) by 25 basis points (bps) to 6 per cent, at the bimonthly policy review on 02 August 2017. The markets as also industry pundits were hoping for something higher – personally, I felt that 50 bps would have been welcome.

Over the period of one year, Indian business and industry are expecting a 100 bps rate cut, and in light of this, a cut of 0.50 bps in August would have been apt. From the perspective of the real estate industry, any rate cut by the RBI boosts sentiment and has a positive effect on sales of residential real estate. While a cut of 50 bps this August would have been welcome, a cut of 25 bps after four straight reviews when rates remained constant, is a welcome step.

The Indian economy as also the real estate industry have been grappling with the impact of Demonetization, RERA and GST, which have effectively, slowed down the ‘buy’ decision; almost all home seekers have been in a ‘wait and watch’ mode since past few months. In light of this, the rate cut will bring in much required positivity for sentiment, which in turn, will have a positive impact on home buyers, and I expect the RBI’s announcement of a 25 bps repo rate cut to not just boost positive sentiment, but also mark  a turnaround from the negativity which had been perceived in the real estate sector.

Given the recent incidental changes in operations of Indian real estate as also the perceived slow-down in the economy, credit options were limited. The rate cut brings in the affirmation to push home loan lending. For the home buyer, it will translate into lower EMIs and a wide array of options and choices for customers to buy their dream homes. This should impact ‘indecisive fence sitters’, and they should start to buy homes at better pace, given that market sentiments are conducive for home buying.

The Prime Minister’s vision of ‘Housing for all by 2022’ as also the target for ‘Affordable Housing’ should be achieved by various initiatives under the Pradhan Mantri Awas Yojana (PMAY), with various positives, including interest subventions scheme for Affordable Home buying and granting of infrastructure status making long term funding available such projects.

Given the high process of land the metro cities, we need to look at availability of comparatively cheaper land parcel in  peripheral and Ties II & III cities, and I feel PMAY could be useful for such locations.

I expect residential real estate sales to improve post RERA and GST, and given that no tax is applicable for buildings having received OC, post the RBI’s announcement of a 25 bps repo rate cut, I expect fence sitters to step forward and make their ‘home buying’ decision.

~ Dr. Niranjan Hiranandani is Founder & CMD, Hiranandani Group. His recent initiative is Hiranandani Communities. He is also Founder and First President, National Real Estate Development Council (NAREDCO-Maharashtra), which works under the aegis of Ministry of Housing & Urban Poverty Alleviation, Government of India.

The Ahmedabad Metro Rail Project Phase II will link GIFT City and Airport through sub-lines

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Enhanced connectivity will ensure evolution of Ahmedabad – Gandhinagar to a Global Business Centre

MUMBAI/ AHMEDABAD : How important is high-speed connectivity for evolution of a city into a global business centre? Let us consider Ahmedabad, among the fast growing urban conglomerations in India. The real estate scenario in Ahmedabad has kept pace with the city’s growth, and transport linkages – mostly road transport – have kept the city linked. Close to Ahmedabad is the state capital Gandhinagar, approximately 25 kms away. The past decade has witnessed the open space in between the two being fast being converted into real estate development; the day is not far when it will be difficult to figure out where Ahmedabad ends and Gandhinagar begins. Although there is a railway line that links the two cities, bulk of the daily commute is still powered by buses and other forms of road transport.

From residential to work spaces as also lifestyle spaces like retail, entertainment, academic and medical real estate, Ahmedabad has seen all these segments grow, in sync with the road linkages. The future growth will be driven by mega job creating initiatives like Gujarat International Finance Tec-City (GIFT City), which is situated between Ahmedabad and Gandhinagar. The SEZ as also the International Financial Services Centre (IFSC) areas are expected to drive growth, and impact Ahmedabad’s real estate, going into the future. Will just road linkages work for the new scenario?

Connectivity is the essence of any urban conglomeration evolving from a business city to a global business centre, and the Ahmedabad Metro Rail Project promises to create high-speed transport linkages which will seamlessly connect important locations in Gandhinagar and Ahmedabad. These linkages are expected to create an economic upsurge, as a result of the quick connectivity. Recent media reports say the state government of Gujarat has prepared a new master plan for Phase II of the metro, which will link Ahmedabad (Motera) to Gandhinagar (Mahatma Mandir).

The enhanced connectivity that Phase II offers include important locations like Motera Stadium, Tapovan Circle, GNLU, Infocity, Sachivalaya, Akshardham

and Mahatma Mandir. This phase will also connect Ahmedabad Airport and GIFT City in 2 sub-lines. This linkage with the SVP Airport and GIFT City to Ahmedabad. This Metro rail linkage will ensure that the IFSC in GIFT City delivers the advantage it promises to Ahmedabad and Gandhinagar while evolving as a Global Business centre. It is also a positive for our project, Hiranandani Signature, which is the first operational work-space within the IFSC in GIFT City. Hiranandani Signature has recently been awarded the Green Building Certification – Gold Rating, and it represents the Green and Sustainable Development aspects which have been maintained while creating the commercial tower built as per Global Best Practices followed in GIFT City. The Metro Linkage will further enhance Hiranandani Signature’s attractiveness for those looking at leveraging growth prospects in the IFSC, GIFT City.

Not just GIFT City, but, as a result of this connectivity, I foresee commercial real estate leasing and buying activity increasing across the linked areas from Ahmedabad to Gandhinagar through the future. GIFT City has the potential to create 500,000 direct and an equal number of indirect jobs which would require 62 million square feet of office and residential space. In line with similar leading Global Financial Centers, GIFT City targets a 6 to 8 per cent share of the financial services potential in India, and we need to understand the importance of the Ahmedabad Metro Rail Project Phase II linkage in this light..

The success story of Indian Real Estate will be written by projects that combine residential real estate and office spaces. I would add here, the need for high-speed connectivity to drive this growth – which is what the Ahmedabad Metro Railway Project has the potential to do. This aspect also dove-tails perfectly with the mixed-use, integrated townships model which has been created by the Hiranandani Group, we are ‘on the drawing board’ with a similar project in Ahmedabad.

Real Estate in Ahmedabad – Gandhinagar will be constructed using global best practices, work spaces will provide global features – which will make areas lnked by the Ahmedabad Metro Rail Project preferred locations for the future-ready Indian corporate entity looking to set up operations in Ahmedabad. The future real estate success story in Ahmedabad will be about high-sped connectivity coupled with linkages to important locations like GIFT City and the SVP Airport. This will ensure global standards, along with that infrastructure which enhances lifestyles — and thanks to the Ahmedabad Metro Rail Project, the dream will come true: Ahmedabad’s real estate will offer best options with global standards, making it a Global Business Centre.

~ Dr. Niranjan Hiranandani is Founder & MD, Hiranandani Group. His recent initiative is Hiranandani Communities. He is the Founder and First President (Maharashtra), National

Real Estate Development Council (NAREDCO), which works under the aegis of Ministry of Housing & Urban Poverty Alleviation, Government of India.