Ahmedabad: Gujarat, the state which pioneered the concept of the Special Investment Region (SIR), will establish 12 new industrial hubs in the next 5-6 years and expects the private sector to play a leading role in facilitating the process, reports PTI.
"We have 12 more such projects in the pipeline, including four which have already been notified by the government. They will all be operational by 2015-16," a senior official of the Gujarat Industrial Development Corporation (GIDC) said here.
Gujarat passed an act for SIRs and set up the first such hub — Petroleum, Chemical and Petrochemical Investment Region (PCPIR) spread across 4.53 lakh square hectare — in Bharuch last year.
The state government now plans to set up SIRs to act as industrial hubs for various sectors including auto ancillaries, chemicals, healthcare, electronics and so on.
Investment worth over Rs70,000 crore has already gone into PCPIR and the official said similar expenditure is likely to be incurred in other SIRs as well.
ONGC Petro Additions Ltd is the anchor tenant or major investor in the PCPIR and has put in around Rs19,000 crore into the project.
"We are looking at similar participation by the private sector in the upcoming SIRs also," the official said.
Of the new dozen SIRs, 10 would be built by the GDIC, a public sector undertaking (PSU) under the state government, while the rest two are being built by the Gujarat Infrastructure Development Board (GIDB) and the Gujarat Maritime Board.
SIRs are special regions spread over a minimum 50,000 hectares where industries can buy land directly from local owners. However, they are not offered concessions like tax benefits as in SEZs.
"However, the main benefit of SIRs is that they provide quality infrastructure and development even before units become operational. In every SIR, 55% area is to be set aside for residential townships and other non-processing units," the official said.
SIRs are regulated by regional development authorities, which plan, regulate and develop the zones.
Santalpur SIR of 1.86 lakh hectares (which will focus on agro industries and solar energy), Halol Savli SIR of 1.22 lakh hectare (auto ancillaries and electronics) and Viramgam-Sanand SIR of 1.38 lakh hectares (auto, engineering and healthcare) are among upcoming SIRs in the state over next 5-6 years.
"Even a small SIR like the one being built by GIDB at Dholera is of 50,000 hectares, much larger than the world's largest SEZ in Shenzhen (China) which is of 32,700 hectares," the official said.
The Indian market is likely to open on a positive note taking cues from the global arena. Wall Street erased most of the losses accrued on Tuesday supported by good earnings reports and a weak dollar. The Asian pack was trading with modest gains in early trade on optimism in the US markets. The SGX Nifty was up 13 points at 6,028 over its previous close of 6,015.
Volatile trading continued to be the highlight for the third consecutive day on Wednesday. The domestic market picked up momentum after a soft start on the back of tardy global cues. The indices stepped into the green in early trade in the midst of a choppy session. However, ups and downs continued with the market witnessing indecisive trade. The market touched the day's high in the post-noon session but ended off the day's low, in the red for the second straight day.
The Sensex settled 110.98 points (0.56%) lower at 19,872. The Nifty stood at 5,982, 45.20 points (0.75%) at close of trade.
Markets in the US erased most of the losses accrued on Tuesday on good earnings reports and a weak dollar, which increased investors’ appetite for riskier assets like stocks and commodities. Material and energy stocks, which took a beating on Tuesday, were the top performers yesterday. Financial companies reported mixed earnings. While Wells Fargo & Co announced higher earnings but Morgan Stanley came up with a surprise loss.
The Dow advanced 129.35 points (1.18%) to 11,108. The S&P 500 gained 12.27 points (1.05%) to 1,178. The Nasdaq rose 20.44 points (0.84) to 2,457.
Markets in Asia were trading mostly in the green on earnings optimism in the US and a weak dollar. The markets seem to have overcome the surprise rate hike by
China but are cautious ahead of the country’s key economic data, due to be released today.
The Hang Seng was up 0.26%, KLSE Composite was up 0.42%, Nikkei 225 was up 0.20%, Straits Times was up 0.02% and Taiwan Weighted gained 0.20% in early trade. On the other hand, the Shanghai Composite was down 0.74% and Seoul Composite shed 0.14%. The SGX Nifty was up 13 points at 6,028 over its previous close of 6,015.
Economic think-tank the National Council of Applied Economic Research (NCAER) has hiked its India economic growth projection for the current fiscal to 8.4% from 8.1% t, mainly on account of an anticipated increase in the country's agricultural output.
"The more detailed assessment based on the macro- econometric model provide a slightly higher growth projection of 8.4% for 2010-11. The revised growth estimates are higher than our previous projection of 8.1% presented in July, 2010," the NCAER said in its latest quarterly review of the economy on Wednesday.
Jones Lang LaSalle India chief believes that prices are beyond peak levels and developers will not be able to sustain
There is considerable apprehension in the real estate market over the price levels in several micro-markets that have gone beyond the peak of the boom in 2007. Now, the chorus of voices expecting a correction in residential properties is growing louder.
"While I expect selective price escalation to happen until the end of 2010, we are very likely to see corrections related to location, projects and the degree of unrealistic pricing happen after that," said Anuj Puri, chairman and country head, Jones Lang LaSalle (JLL) India. He was speaking on the sidelines of a meeting of the company's country heads from Australia, Japan, China and South-East Asia in Mumbai yesterday.
Mr Puri said prices were at their peak and builders could not afford to hike prices any further, notwithstanding the rapid rise in cement and steel prices. "If they (builders) increase prices further, it would affect demand," he said.
It has been reported that some developers are offering fabulous incentives-like Mercedes Benz and Skoda Fabia cars-to brokers to boost sales. Asked about this recent trend, Mr Puri said, "Only developers whose projects are overpriced and who cannot hold inventory anymore, are making such offers. As there are very few or no buyers for such overpriced properties, the developers are trying to corner some sales from the improved sentiment in the festive season."
While India is struggling to see some improvement in sales in the residential sector, Singapore remains the focus of foreign investment in the residential sector with better facilities for medical treatment and education, as well as well-provided spaces for corporate offices. Interestingly, the investment by Indians in residential property in Singapore is the third highest after Indonesians and Chinese.
"Indians are positioned in third place with a 10% to 11% contribution in the residential segment investment in Singapore," said Christopher Fossick, country head, JLL, Singapore. Indonesians top the list with 35% to 45% by value, and the Chinese have 15% to 16%.
On the other hand, China's realty sector is clouded by regulatory concerns, which analysts fear could lead to a fall in the property market. The Chinese government recently introduced a regulation whereby each household is permitted to purchase only one home in Tier I cities such as Beijing and Shanghai. This has led to worries that home purchase contracts already entered could be cancelled. KK Fung, managing director, JLL, Greater China, said, "It (the regulation) will lead to suppression of demand in the short term, but in the long term the demand and supply will get leveraged."
Commenting on the commercial real estate market, Alastair Hughes, chief executive, JLL, Asia Pacific, said, "Singapore is the most-preferred destination for multinational companies-mainly financial institutions, followed by Hong Kong and Mumbai. The commercial market in Tokyo (in high demand till the recent recession) is sluggish as the country is recovering slowly from the global recession."
In terms of rental values, Jones Long Lassalle has forecast that rental value in Mumbai would increase by 7% by end 2011. The highest increase in rental value is expected in Hong Kong at 33% and the lowest in Kuala Lumpur at 1%. JLL is a financial and professional services firm specialising in real estate services and investment management. It operates from 750 locations in 60 countries.