Companies & Sectors
Indian real estate sector: In a tougher spot

With the RBI tightening its grip, inventory piling up and decreased sales, expect a drop of 20% or more in real estate prices

The RBI's (Reserve Bank of India) Financial Stability Report, released a couple of days back, has tightened the noose around the realty sector's neck. The RBI has said that the rise in the number of non-performing assets (NPAs) and the subsequent increase in provisioning is taking its toll on the profitability of banks.

"NPAs in real estate loans remained above the system level NPA growth. Going forward, the asset quality in this segment may decline with further pressure, given the increasing interest rate environment," the RBI said yesterday. The rate of growth at 19.8% of NPAs in this segment was also higher than the overall NPA growth rate of 14.8%. Credit to the sector was up 24.6%, which was faster than the overall credit growth of 22.6%.

With RBI's 10th hike in policy rates in 15 months, home loans can become more costly. The 25 bps (basis points) repo rate hike and a similar hike in the reverse repo rates to 6.5% may not result in an immediate increase in bank interest rates, but it definitely comes as a further cause of worry for the distraught realty sector.

Skyrocketing prices have put off buyers, leading to a piling up of unsold inventory.

"The residential property prices are exorbitant at Mumbai's prime locations. 180 units sold in Mumbai from January to March 2011 were priced above an average capital value of Rs20,000/sq ft. No wonder the market is slowing down perceptibly now. Around 3,350 units priced at Rs20,000/sq ft and above remained unsold by the end of March 2011 in the city," said Himadri Mayank, manager-research & real estate intelligence service, Jones Lang LaSalle India.

Liases Foras, realty researchers, had estimated that almost 92,000 flats remain unsold in Mumbai. A Hindustan Times report says that there has been a 30% rise in the inventories of real estate giants over the last year. DLF, HDIL and Indiabulls Real Estate have inventories collectively worth Rs23,197 crore on their respective balance sheets as on 31st March.

DLF has sold 10 million sq ft in 2011, whereas in 2010, it had sold 12.5 million sq ft of property. Other developers too, have fared badly. "The pre-monsoon scene was terrible," said a Thane-based broker, "we are not putting up any hopes during the rains. So many builders are advertising via radio, newspapers and hoardings-but there are no sales. Even discounts haven't got us many customers."

India will need some 26.30 million houses by the end of 2011, as a government report on the 11th Five Year Plan (2007-2012) has said. Most of the affordable housing schemes for the poor have failed drastically. The details can be seen here: India will need 26.53 million houses by 2012, says ministry of housing report. "But when big builders' associations have holding power over the prices, you cannot do anything but wait until they decide to lower the prices," said an analyst.

Confederation of Real Estate Developers' Associations of India (CREDAI) says that following the RBI move, prices may rise further. But, a Mumbai-based builder said that the stagnation in the sector may ultimately result in a 20% drop in prices by year end.

Most realty companies blame the delay in procedures and getting clearances, etc., for the inflated prices. But these explanations are losing their credibility with buyers. However, if the sector does not reinvent itself and starts restructuring prices, it will find more difficult to raise money through sales and bail itself out.



Mukesh Parikh

5 years ago

Builder's rarely display Bank's Hypothecation/lien on project at the site or in advt....
Now it's time for the banks to put on website which projects are mortgaged to them which will give clear picture to the common who is putting his hard-earned life time earning in booking property.

Bull doze

Muted growth in corporate profit, a US slowdown, a stronger dollar and reduced FII inflows…...

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Hindustan Petroleum whistleblowers not reinstated even a year after HC order

No one held guilty in the faulty petroleum adulterant marker case

recently reported about the plight of a whistleblower, who took on Indian Oil Corporation, but has not been compensated fully despite a judicial victory. He is not alone, though. Whistleblowers at Hindustan Petroleum, after almost a year, are still similarly unemployed and their plight ignored.

In August 2010, the Bombay High Court upheld the complaint made against the authenticity of an adulterant marker, which the government had purchased at extraordinarily high rates from a UK firm. HPCL officials Ravi Srivastava and Ashok Singh lost their jobs in 2008, when they blew the lid on the issue. Though the court order vindicated their stand, they have neither been compensated financially, nor reinstated in their jobs.

A message from Moneylife to HPCL on this issue has not been answered.

"We are still without jobs," said Mr Srivastava, "just doing some work with some consultants here and there. No compensation, no prestige." To add insult to injury, in November 2010 Mr Srivastava's RTI query to the oil ministry about the status of the Authentix marker revealed that 'the inquiry is still in progress'.

"It has been proved that this adulterant marker could be easily tampered. The CBI has also registered a case against MS Srinivasan, the then secretary in the ministry of petroleum and natural gas, Authentix and their Indian agent SGS, and several officials from oil companies like Bharat Petroleum, HPCL and Indian Oil. What is left to be proved," Mr Srivastava asked.

A marker is a coloured chemical, which if added to substances like kerosene or naptha, can be visually detected if these are mixed with petroleum for adulteration. The government, in order to stop massive adulteration by addition of kerosene allocated to PDS, asked all oil companies to add a supposedly infallible marker from Authentix in kerosene and other cheap fuels in 2006.

Mr Srivastava and his colleague were serving as treasurer and president of the Oil Sector Officers' Association (OSOA), when in May 2008 they received complaints from various corners that there were 'serious irregularities in procurement, specification and implementation' of the policy on this particular marker.

The officers investigated the matter, and discovered that the marker could be got rid of easily with clay and other ordinary lab chemicals. A website named conducted a survey at several petrol pumps, depots and oil-cargo ferries, and concluded that the marker had fared pretty badly. The government had also struck a benevolent deal with Authentix, via their Indian agents SGS, and the marker was purchased at Rs13,000 per litre without any chemical specifications. No wonder, Authentix listed the deal as the "largest fuel adulterant marking contract in history" on their website.

When they pointed out the flaws with the marker, Mr Singh was fired first, and Mr Srivastava was stripped of all facilities, accommodation and perquisites. Later, when the officers protested against the arbitrary appointment of a non-employee to a high position, Mr Srivastava was accused of 'instigating other officers' and fired from his job.

In 2008, the duo approached the chief vigilance commissioner, who refused to grant them protection as whistleblowers, treating them as ordinary complainants. A year later, CNN-IBN reported their story and exposed Authentix's dubious reputation abroad. In April 2010, Simpreet Singh, activist, filed a writ petition against the oil ministry's extravagant favour granted to Authentix. During the hearing, the Central Bureau of Investigation (CBI) also released a report that showed there were many lapses in the process, and that the government had awarded the contract to Authentix without inviting a global tender.

The Bombay High Court upheld the whistleblowers' complaints. However, they received no compensation. "Neither Murli Deora who was the minister then, nor other government officials, nor the companies were punished. And, the inquiry on Authentix marker is still 'in progress'. Why would anyone risk their necks to point out discrepancies then," he said.

Fuel adulteration has reached worrying proportions, and the oil mafia has got more entrenched. In January, Yashwant Sonawane, additional collector, was burnt alive when he tried to investigate an instance of fuel theft. If the government chooses to ignore the calls from within the industry and does not protect the whistleblowers, the perils will intensify.



Money life

3 years ago

वन्दे मातरम साथियों.
आशा करता हूँ आप को मेरा पहला मेल मिला होगा.
उस मेल में मैंने एक फाइल attach कर के भेजी थी.
क्या था उस फाइल में?
वोह फाइल आम आदमी पार्टी के रवि श्रीवास्तव के कोर्ट केस के बारे में है.
आप लोग सोच रहे होंगे की ऐसा क्या है उस फाइल में?कई लोगों ने लिखा के उन्हें ३७ पन्ने पढने में कठिनाई हो रही है.

साथियों,आप लोगों ने श्री रवि श्रीवास्तव को कई बार टीवी और प्रेस मैं आम आदमी पार्टी के मंच से यह कहते हुए देखा होगा की ...

वह भ्रष्टाचार के खिलाफ आवाज़ उठाने के कारन अपनी नौकरी से निकले गए.
उन्होंने HPCL में पेट्रोलियम मार्कर स्कैम का खुलासा किया जिसके कारन उन्हें नौकरी से निकाला गया.
उन्होंने मुरली डोरा (पेट्रोलियम मिनिस्टर ) को भ्रष्टाचार करते हुए पकड़ा,इसी लिए उन्हें नौकरी से निकाला गया.
वे भी अशोक खेमका की तरह 'व्हिस्त्लेब्लोवेर' हैं और इसी के कारन उन्हें नौकरी से निकाला गया.

साथियों,मेरी जोड़ी गयी फाइल को पढने के बाद यह सारी दलीलें साफ़ साफ़ कारिज की जा सकती हैं .इस केस की फाइल अगर आप पढेंगे तो आप को यह नज़र आयेगा की...

रवि सिरवास्तव HPCL के कर्मचारी थे.उस समय पर वोह सीनियर मेनेजर (operations) थे.
रवि श्रीवास्तव HPCL में एक एसोसिएशन (HP-MSA) के treasurar थे (1995 से).इस एसोसिएशन में उनके ऊपर श्री सिंह थे.
HPCL और colas,france के बीच में एक जॉइंट वेंचर हुआ.
उस जॉइंट वेंचर में संजय ग्रोवर नाम के एक व्यक्ति को चेयरमैन बनाया गया.
संजय ग्रोवर की नियुक्ति से HP-MSA के लोग खुश नहिं थे कयुनकि उनके मुतबिक,सनजय गरोवेर HP से e grade कि पगार से इसतिफ़अ देकर hincol में g/h grade की पगार पे नियुक्त किये जा रहे थे.
२८-४-२००८:HPMSA ने एक एग्जीक्यूटिव समिति की बैठक बुलाई,जिसमे यह निर्णय लिया गया की अगर संजय ग्रोवर की जगह किसी और HP के जूनियर स्टाफ को अप्पोइंत नहीं किया गया तो वे लोग आन्दोलन करेंगे.
२/५/२००८- श्री संजय ग्रोवर को अप्पोइंत किया गया.
५.५.२००८ -HR हेड ने HPMSA से कहा की सारी बातें चेयरमैन के सामने रक्खी जाएँगी जब वे अपने दौरे से वापस आ जायेंगे.HR ने सभी एम्प्लाइज से अपील की के वे लोग स्ट्राइक पे न जाएँ.उन्होंने यह भी याद दिलाया की डिप्टी कमिश्नर ऑफ़ लेबर ने नोटिस दिया है की ये स्ट्राइक गैर क़ानूनी होगी.
६-५-२००८:रवि श्रीवास्तव अपने कंप्यूटर से मेल भेजते हैं की स्ट्राइक होगी.यह मेल उनके ip एड्रेस से trace किया जाता है.
६-५-२००८:ऑफिसर स्ट्राइक पे जाते हैं.
७-५-२००८:रवि श्रीवास्तव को chargesheet दी जाती है की उन्होंने गैर कानूनी ढंग से लोगों को स्ट्राइक पर जाने को बोला .उनके खिलाफ नौकरी से निकालने की प्रतिक्रिया शुरू की जाती है.
११.६.२००८:रवि श्रीवास्तव HPMSA (एसोसिएशन) के नोटिस बोर्ड पर एक टेक्निकल रिपोर्ट पेस्ट करते हैं.इस टेक्निकल रिपोर्ट में पेट्रोलियम मार्कर के टेस्ट रिजल्ट दिखाए जाते हैं.
३०.७.२००८:रवि श्रीवास्तव को एक अंदरूनी डॉक्यूमेंट को नोटिस बोर्ड पे डालने के लिए नोटिस दिया जाता है.
१६.७.२००८:रवि श्रीवास्तव अपने ऊपर पहली chargesheet का जवाब देते हैं.
एक महीने के अन्दर association HPMSA के १६०० से अधिक मेम्बर एसोसिएशन से रिजाइन करते हैं.
१२.५.२००८:श्रीवास्तव और सिंह ,(HPMSA) के चेयरमैन, सीबीआई में कंप्लेंट करते हैं की पेट्रोलियम मार्कर की खरीद में भारी धांधली हुई है.उनकी कंप्लेंट स्वीकार ली जाती है.

अगर आप ऊपर का घटना क्रम पढेंगे तो देखेंगे की:
१.जब तक श्रीवास्तव के खिलाफ निकालने की कारवाही नहीं की गयी,तब तक उन्होंने किसी धांधली का खुलासा नहीं किया.
२.जैसे ही उनके ऊपर नौकरी से निकाले की कारवाही की गयी,एक महीने के अन्दर उन्होंने खुलासे करने शुरू कर दिए.
३.पेट्रोलियम मार्कर को २००६ में HP ने ख़रीदा था.इसका मतलब की श्रीवास्तव जो टेक्निकल रिपोर्ट का खुलासा कर रहे थे,वह रिपोर्ट कम से कम दो साल पुराणी थी.
४.उनके ऊपर यह भी आरोप हैं की उन्होंने गैर कानूनी ढंग से कंपनी के बारे में प्रेस रिलीज़ ज़ारी किया और चेयरमैन के ऊपर गंभीर आरोप लगाये जिनका कोई वजूद नहीं था.यह मेल उन्होंने प्रेस और चैनल्स को भेजा.

दोस्तों..ज़रा सोचिये...जो इंसान अपने आप को करप्शन का शिकार बता रहा है,अपने आप को 'whistleblower बता रहा है और आम आदमी पार्टी के प्लेटफार्म का उपयोग कर रहा है और कह रहा है की उनके मुरली डोरा के खिलाफ केस की वजह से उन्हें नौकरी से निकला ,वोह वास्तव में कोई whistleblower है ही नहीं.यह बहुत ही गंभीर मामला है.
जब तक श्रीवास्तव कंपनी में थे,उन्होंने कभी किसी करप्शन का मामला नहीं उजागर किया.उस डेट से पहले कभी कोई एक्टिविस्ट होने का कोई रिकॉर्ड नहीं है उनका.
अगर प्रेस को यह सच पता चल गया तो कल को आम आदमी पार्टी को अंजाम भुगतना पड़ेगा.Whistleblower तो खेमका और दुर्गा शक्ति जैसे लोग हैं जो अपना जॉब दाँव पे लगा कर भ्रष्टाचार का खुलासा करते है,वे लोग नहीं जो निकाले जाने के बाद एक्टिविस्ट बन जाते हैं.


5 years ago

i finished my BE AERONAUTICAL and seeking for jobs

Dr Siddique

5 years ago

This is all rubbish. Infact the complainers themselves colluded with the miscreants/adulterators to stop the programme. I was working then with one of the OMCs. Due to the programme 1000 retail outlets were caught adulterating in the same time the OMCs only caught 5 with their survelliance. This itself spoke about the success of the programme. The media highlighted one issue and the ministry suspended the programme. The irony is that the complainers relatives and their benami petrol pumps which were caught adulterating by the technology implemented and they wanted to scuttle and derail the whole marking programme.

Media must do a complete check before publishing such articles.


5 years ago

because the media is currently busy outdoin itself on lokpal. existing institutions itself arent deliverimg and they want a new one! if laws are implemented fast even current setup can deliver. judicial process needs to be hastened and financiql frauds considered very serious and not some ordinary fraud where people get away withntransfs suspemsions and penalty. media largely is not doing any servicento the country. they r sellng what is sellable today. root causes of corruption inall stratas of society , is not being discussed on any tv channel and very few print

Pravinkumar Padwalkar

5 years ago

Hats off to U guys for publishing this article.I'm surprised why the media is not bringing up up this vigorously like other corruption cases.Is there any corner left in public sector where you
can find loyality??

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