With the rising import bill of IT and telecom products, the IT Task Force has recommended that the government develop an eco-system for boosting indigenous manufacturing
New Delhi: In order to boost manufacturing of indigenous equipment, the Centre may extend preferential status to 'Made in India' products in the New Telecom Policy, 2011 (NTP'11), reports PTI.
"Broader telecom policy will include measures appropriate to encourage domestic telecom manufacturing. Some aspects have been considered by the Committee of Secretaries, and preferential status for domestic manufacturers is one of them," Department of Telecom (DoT) secretary R Chandrashekhar told PTI.
Mr Chandrashekhar said DoT is waiting for recommendations from the Telecom Regulatory Authority of India (TRAI) on manufacturing and expects to receive them by end of March.
He said communications and IT minister Kapil Sibal is holding consultations with the industry and their views will be discussed by the Telecom Commission while finalising the NTP'11 draft.
"A final view will be taken after the consultation process is complete. We expect it to be done by end of March," Mr Chandrashekhar said.
The push for preferential treatment for 'Made in India' products is part of the government's agenda to reduce the widening trade deficit created by imports.
Mr Chandrashekhar said the decision to encourage telecom manufacturing is in line with the recommendations made in the IT Task Force report, which is being processed by the Department of Information Technology.
Citing the rising import bill of IT and telecom products, the Task Force has recommended that the government develop an eco-system for boosting indigenous manufacturing.
Estimates show that India's demand for electronics products (including telecom) will be $400 billion by 2020.
Meanwhile, at the existing rate of growth, the production of electronics hardware is likely to grow to $104 billion by 2020, creating a demand-supply gap of $296 billion, which would have to be met through imports.
The Wireless Planning Commission (WPC), a DoT wing for spectrum management, has also decided to reserve some radio waves for indigenously developed technologies and systems in the new National Frequency Allocation Plan of 2011.
The move, however, has been opposed by telecom lobby groups-Cellular Operators Association of India and Association of Unified Telecom Service Providers of India.
Sanjay Dutt, CEO for business with Jones Lang LaSalle India, says Mumbai’s residential property rates are seeing a small correction in some pockets. This correction phase will continue for the next three months and inevitably extend into the traditionally slower monsoon and vacation period, mainly on the urgent need for capital by city developers. But other realty analysts are not so sure about the timing or the extent of the correction
The Mumbai real estate sector is seeing a downward spiral in sales and sales registrations, principally due to exorbitant prices. However, experts say that it is difficult to predict when corrections will take place, as long as the holding stock is not released.
According to a report by Prabhudas Lilladher, a Mumbai-based research and financial services agency, sales volumes in the city and suburbs have fallen 45% from the 2010 peak, and sales registrations have seen a 22% year-on-year decline. Since the beginning of 2011, the figures have been dismal. However, registration of leases continues to trend up, which indicates that high interest rates and hopes of a correction are prompting people to delay making purchases.
But it's uncertain when this correction will happen. An analyst said, "A correction will happen, but we cannot say exactly when. It may not be anytime soon." When asked about the continued high pricing of property, he said, "Prices can only correct if builders who are holding available stocks release their grip and quote affordable prices. But they will continue to hold until they see that profits are ensured."
Off-take has been almost nil. Pankaj Kapoor, managing director, Liases Foras estimates that more than 88,000 residential properties remain unsold in Mumbai proper itself. He said, "When builders and agents put the price of an average flat at something near a crore, how can anyone afford it?"
According to Jones Lang La Salle, in the 2009 slowdown, Rs12,000 crore was spent in Mumbai to stock up inventories. The funding came at high interest rates. Then, prices appreciated by 43% in 2010. While the Union Budget has increased the home loan limit from Rs20 lakh to Rs25 lakh, it has not improved the situation.
Only last week, the Reserve Bank of India (RBI), hiked repo and reverse repo rates by 0.25% to 6.75% and 5.75% in order to arrest liquidity, and this is likely to result in higher rates for home loans also. This is the eighth time in a year that the RBI has hiked rates.
Investments in realty have also gone down, as returns have not been significant, and investors have turned to commodities which are trading at record prices, according to an analyst. The BSE realty index has plunged 36.70% since March 2010.
Various financial research and advisory agencies, like Morgan Stanley and Crisil, believe that a 15%-20% correction in Mumbai real estate prices can be expected, but there has been no sign of any correction till now. Rather, prices have shot up in some new areas. Builders cite increased input costs as a major reason for maintaining high prices.
"With unfriendly interest rates and unavailability of feasible loans, prospective customers have delayed purchases. Most of them are waiting for the prices to come down," said the analyst. "But as long as stocks are held back, neither can a correction happen, nor can there be any growth in sales."
Sanjay Dutt, chief executive officer, business, Jones Lang La Salle, thinks that an increasingly urgent need for capital may lead developers to go in for a correction, though not much difference has been observed in prices. He said, "Prices have dropped in areas such as Parel, Lower Parel, Mahalaxmi, Bandra (East), Andheri (East), Goreagon (East), Mulund and Kurla. There are several other locations within Mumbai and Thane district that may not have seen a correction of more than 5-10%."
Mr Dutt says Mumbai's residential property rates today are back at 2008 levels. The overall sentiment in the market and the consistent rate of new project launches in Mumbai, gives a clear indication of an impending oversupply by 2012. If the prices don't come down, soon, the coming days will prove to be bleak for both the market and homebuyers.
Transportation is a critical issue in Mumbai that the state chief minister will have to sought out on a priority basis, beginning with initiating a road maintenance and management system. Another important issue is completing the coastal zone management plan
Mumbai, like many cities in India, is full of infrastructure news, all confusing to one and all. Take the example of roads. About 1,950 km of roads are under the ownership of the Municipal Corporation of Greater Mumbai (MCGM), while some come under Mumbai Metropolitan Region Development Authority (MMRDA) for construction and some under the ownership of Public Works Department (PWD). Some fall under the Maharashtra State Road Development Corporation (MSRDC) and some stretches belong to the Mumbai Port Trust (MbPT). Some roads planned or built in colonies do get transferred to MCGM. Street lighting and underground utility services are managed by agencies in addition to these organisations.
Most of the flyovers were constructed by MSRDC and are being maintained by it, while some have been done by MCGM. Lately, some have been planned and constructed by MMRDA. In MMRDA itself, some works are handled by the Transport & Communication Division, actually a transportation planning group, and some by the Engineering Division.
The foot over bridges (FOBs) and road over bridges (ROBs) are usually over railway lines and these are managed by the Railways-planning, design, approval, construction and maintenance (PDACM)-further by Central Railway and Western Railway. Some are over roads; those which are PDACM by MMRDA have a newly-coined name, "Skywalks", while some are by MCGM, MSRDC, etc, known simply as road FOB.
There is much to be desired in the quality of design details, construction and maintenance of footpaths, FOBs, carriageways, road markings, clarity of signals and signage. Trees and fire hydrants pose impediments to pedestrians. Manhole covers go missing, albeit in small percentage, but need to be replaced promptly to avert fatal accidents. Safety norms and construction specifications are seldom followed during construction or trenching for utility repairs and reinstatement of road. Roads are closely linked with drainage and flooding causes damage to roads, especially during the monsoon.
The emergence of potholes is a serious issue. It not only slows down traffic flow but is also a cause of spinal problems-it is a health hazard. The Bombay High Court appointed a Road Monitoring Committee (RMC) to monitor the condition of roads in order to tackle this problem. It became a one-point complaints centre, forwarding the complaints to the appropriate agency and assessing the responses on the ground. It had suggested that an internet based Road Maintenance and Management System (RMMS) be designed and implemented for all roads and associated works and that MCGM should be designated as the nodal agency to execute this RMMS. This must be an item on the priority list as it will help deal with the monsoon potholes on roads and make commuting less arduous and hazardous.
As regards transportation in Mumbai is concerned, and in the Mumbai Metropolitan Region (MMR), there are a lot more stakeholders who come into the picture, such as the six additional Municipal Corporations, 13 Municipal Councils and near about 900 villages. The Traffic Police also comes into the picture, as well as para-transits and their unions. The two railways and now the Metro Rail and Monorail too, adorn the canvas. To co-ordinate various elements in planning and execution, the establishment of a unified metropolitan transport authority (UMTA) is necessary. An initiative was taken by the Government of Maharashtra in forming the Unified Mumbai Metropolitan Transport Authority (UMMTA) for MMR two and a half years back, but it has been in hibernation. Getting this reactivated and having citizens on the committees should be on the priority list.
The Ministry of Environment and Forests (MoEF) has issued a Coastal Regulatory Zone (CRZ) Notification 2011 superseding the CRZ Notification 1991. There have been quite a few things that have been relaxed in the recent order, subject to certain pre-conditions of monitoring in a definite time frame. Governments of states that have coastal areas have to put in place mechanisms that will enable effective and efficient monitoring of compliance of the CRZ notification. There are some special provisions for Greater Mumbai, Goa and Kerala which take into consideration local issues, which promote redevelopment with safeguards.
Maharashtra chief minister Prithviraj Chavan has to put these monitoring mechanisms in place within the next 100 days. Therefore, these are also on the priority list. What these are, need to be elaborated, so that we can get on with specific infrastructure projects, connected specifically with Mumbai, in the next article.
1. Begin work on "Demarcation of the High Tide Line" and complete it by December 2011.
2. Begin with planning and implementing schemes, to ensure discharge of treated effluents and wastes into the sea, dispensing with the current practice of discharging untreated effluent and wastes in a phased manner by December 2012.
3. Begin drafting and complete the Draft Coastal Zone Management Plan (CZMP) after due public consultations, identifying and classifying CRZ areas as per the CRZ Notification 2011 by 8 May 2011. After obtaining recommendations from MoEF, get suggestions and objections from stakeholders, submit the draft CZMP incorporating all these, and get approved for CZMP in six months.
4. Project proponent's application needs to be commented upon within 60 days for compliance with CRZ Notification 2011 and after incorporating the recommendations, the Coastal Zone Management Authority or State Environment Impact Assessment Authority needs to clear the project in another 60 days. The project proponent has to submit half-yearly compliance report, which has to be put in the public domain. The mechanism needs to be put in place to do all this and action must be taken against non-compliance. The first compliance report by project proponent is due on 1 June 2011. Until the CZMP complying with CRZ Notification 2011 is approved, the monitoring shall have to be in accordance with the CRZ Notification 1991. Validity of CZMP under CRZ 1991 shall not be beyond 8 January 2013.
Thus, Prithviraj Chavan has to put in place the following in the next 100 days:
1. Discard the Surbana Consultant's "Concept Plan for MMR for 2052" and initiate planning of a people-oriented, culturally and financially vibrant Megapolis of Mumbai, not forgetting that this Megapolis is an integral part of Maharashtra and the Indian nation. (Read, 'Mr Chief Minister, the proposed Concept Plan for Mumbai is flawed'.)
2. Get internet-based, transparent Road Maintenance and Management System initiated and incorporated.
3. Get Unified Mumbai Metropolitan Transport Authority reactivated so that all infrastructure projects can get executed with proper coordination.
4. Set up all mechanisms to ensure that all projects get executed in compliance with CRZ Notification 2011 and information is made available in the public domain.
In the final part of this series on the priority task for Mumbai before the chief minister, we shall look into the status of specific projects and initiatives the Government of Maharashtra has taken up, which Prithviraj Chavan will have make sure they progress effectively.
[This is the second part of a series by Sudhir Badami. To read the first part, click 'The next 100-day agenda for Prithviraj Chavan, the CM of Maharashtra (Part I)'.]
(Sudhir Badami is a civil engineer and transportation analyst. He is on the Government of Maharashtra's Steering Committee on Bus Rapid Transit System (BRTS) for Mumbai and the Mumbai Metropolitan Region Development Authority's (MMRDA) technical advisory committee on BRTS for Mumbai. He is also member of the Research & MIS Committee of Unified Mumbai Metropolitan Transport Authority (UMMTA). He was a member of the Bombay High Court-appointed erstwhile Road Monitoring Committee (2006-07). He has been an active campaigner against noise pollution for over a decade and he is a strong believer in functioning democracy. He can be contacted on email at [email protected])