If there is macro-economic stability, if there is lower inflation, and if there is no asset price bubble, obviously interest rates will come down and houses will be affordable says the central bank
New Delhi: Against the backdrop of banks showing reluctance to provide loan to real estate, Reserve Bank of India (RBI) said it has been following a cautious policy to ensure sustainability and viability of the housing sector, reports PTI.
"Our main focus is to maintain macro-economic stability. If there is macro-economic stability, if there is lower inflation, and if there is no asset price bubble, obviously interest rates will come down and houses will be affordable," RBI Deputy Governor HR Khan said at an National Housing Bank event in the capital.
He said RBI would ensure that the housing sector remains sustainable and viable over a long period of time. "Our approach has been to see that the whole sector becomes de-risked," Khan added.
"NHB has also played its role in de-risking the sector. You must have all known about a major initiative it has taken in promoting what is know as Indian Mortgage Guarantee Company as a joint venture. It is going to be a game-changer in so far as credit risk mitigation of the lenders are concerned," he said.
The outstanding loan of banks to the housing sector is about Rs4 lakh crore, while that of housing finance companies' is about Rs2 lakh crore.
Khan further said that even though "we have serious issue about foreign flow in real estate sector for affordable housing we are in dialogue with the government to provide some external commercial borrowings (ECB) scheme".
In the 2012-13 Budget, the government had allowed ECBs for low-cost affordable housing projects, to make available additional houses for the low-income groups in major cities and towns.
ECBs are being permitted by the government for providing additional source of funds to corporates and PSUs for financing expansion as well as for fresh investment in various sectors.
Meanwhile, National Housing Bank introduced special refinance scheme for low-income housing.
On liquidity, Khan said, RBI's open market operations (OMOs) to pump in liquidity in the system would depend on the overall situation in the money market.
"Depending on the liquidity situation, RBI will come with OMOs... we have indicated on a sustainable basis plus or minus 1% (deposits). If it is beyond that, then we will consider (OMOs)," he said.
The RBI had on 22nd June pumped in about Rs12,000 crore into the system by buying government securities commonly known as OMO to ease the liquidity situation. OMOs help the RBI to manage the liquidity deficit int the system.
India’s response to the Mumbai 26/11 attacks has been nothing more than whining and complaining as a hapless victim which neither deters future attacks nor does it inspire confidence in her own security apparatus
Mumbai 26/11 was an aggression that had all the ingredients of a “covert military operation” innovatively planned, meticulously co-ordinated and audaciously executed through un-uniformed Pakistani ‘soldiers’—call them mercenaries if euphemism be so necessary for those un-enrolled combatants trained and motivated under the aegis of the Pakistan Army, Navy and ISI. Quite understandably, it comforts Pakistan to disown these ‘soldiers’ and label them as “non-state actors” absolving itself of any involvement in the anti-India crusade. Pakistan’s mask of innocence has, however, been ripped off by confessions made by Ajmal Kasab—the pawn in the forefront on 26 November 2008 and other irrefutable evidence already aplenty. More revelations from David Headley and Tahawwur Rana picked up by the FBI in the US have added more substance to it. If more was still needed, it is now overflowing from Syed Zabiuddin Ansari alias Abu Jundal whose depositions have now exposed how the entire operation was being remotely guided and controlled from the “Control Room” in Karachi.
Somehow, India’s response has been embarrassingly feeble despite overwhelming evidence. We started by sending lists of Pakistani individuals identified as culprits in the episode to the Pakistan government and quite naively expected them to punish the culprits. On which principles of statecraft do we expect that the Pakistan government (read ‘Army’) would ever admit its complicity in the crime and proceed against those it hired, trained and sent to do what they did? “Patriots all, they deserved highest of the awards on earth and zannat in the heavens”—that’s how their masters in Karachi and Islamabad would seem to think. Little wonder that every piece of evidence supplied by India has been trashed by Pakistan. Surely, there must be better ways to deal with aggressions like these.
Every sovereign state is entitled to defend itself against all kinds of aggression or inimical actions with all its might. India too must act in a manner that Pakistan is made to genuinely believe that the retaliation to any misadventure originating from her territory would be sure, swift and severe. Look how we have decimated our own credibility in the recent past. After the attack on our Parliament in December 2001, the Army was mobilised and deployed all along Indo-Pak border—but only to return home empty handed after nearly a year of un-fought Operation Parakram. Registering our protest against Pakistan sponsored terror attacks, we have frequently disrupted the summit meetings and Samjhauta bus service only to resume again without extracting much from our protests. We have created enough precedence on the basis of which India’s response to future such attacks can be foreseen and predicted.
The world, however, has better models and precedents to go by in dealing with such hostile acts by rogue states. Israel, for example, has developed her model of credible deterrence and frequently demonstrated her resolve through severest counter-blows to the originators of crime, no matter where they hid. Fear of hostile international opinion has not discouraged her bold initiatives and in preserving her sovereignty Israel has never shied away from delivering crippling blows often to the consternation of even her trusted ally, the United States. Now, compare ‘Operation Entebbe’ with India’s response to India’s shameful ‘Operation Kandahar’ in December 1999.
Another model is the United States of America. The whole world watched how the US responded to the al Qaeda terror attack on her vital installations on 11 September 2001. The US carried the war to the land from where it had originated and not only wrested Afghanistan from al Qaeda-Taliban clutches but continued the pursuit until Osama bin Laden was raided and killed in his den deep inside Pakistan. China, Russia, France, Germany, UK and many others have often carried out swift surgical operations by mobilising their special forces and striking cross-border targets leaving the harbouring country under awe. Even countries like North Korea and South Africa have clearly defined and unambiguously declared policies which have been reinforced by their actions. India too has a highly trained set up of special forces with capabilities to swiftly move and strike anywhere across the globe. What we do not yet have is an unambiguous national policy to deal with acts of terror and covert attacks like Mumbai, Red Fort, Parliament et al.
The Pakistan doctrine of covert military operations is not new. It dates back to 1948 and has been resorted to nearly in all conflicts between the two neighbours since then. What could be more shocking than the fact that Pakistani soldiers were infiltrating in the guise of local shepherds to occupy heights in Kargil at a time when the two prime ministers, Atal Bihari Vajpayee and Nawaz Sharif, were signing the Lahore Declaration in February 1999 promising to find solutions to problems through peaceful means with mutual cooperation. The Indian Army had to fight a limited war and sacrificed precious lives to beat back this military adventurism of Pakistan. Nawaz Sharif is on record having admitted that he was kept in the darkness by his Army chief, Gen Parvez Musharraf and the Army’s Kargil misadventure did not have his government’s approval. Going by the post-Mumbai official posturing, how ridiculous would it seem if India were to despatch nominal roll and proofs of the Pakistani soldiers killed at Batalik, Tiger Hill and other Kargil heights requiring their commanders including Gen Parvez Musharraf to be prosecuted for their misdeeds?
If the army could ignore their prime minister in 1999, the Pakistan government is in far worse disarray today and, therefore, there is every likelihood of the army/ISI having acted on their own in planning and deciding Mumbai 26/11. Remember president Zardari had offered to send the ISI chief to Delhi soon after the Mumbai attacks. Next morning he was overruled by the army chief, Gen Ashfaq Parvez Kayani who said there was no question of the ISI chief or any other official going to Delhi to assist in investigations or give clarifications. Imagine a government having to maintain its sober countenance with such an over assertive and insolent army on one side, hard-core Islamists and pro-Taliban maulvis on the other, and a hyper-active Supreme Court gunning for the president from the top. Logically prudence suggests that while meaningful negotiations would run through complexities in such a chaotic environment, lightning commando strikes on pre-selected targets like the “Control Room” complex in Karachi and terrorist training camps deep inside Pakistan could have achieved better results with stunning effect.
Sadly, however, India’s response to the Mumbai 26/11 attacks has been nothing more than whining and complaining as a hapless victim which neither deters future attacks nor does it inspire confidence in her own security apparatus. Anyway, the time and opportunity for quick and meaningful retaliation has been lost long ago. Asking and expecting the Pakistan government to prosecute its citizens found involved in the Mumbai attacks is too much. But not all is over yet. At this belated stage too, India can still proceed decisively in a manner that would display her resolve and competence to deal with the guilty—be it the state or individuals—effectively.
There is an immediate need for India’s top politico-bureaucratic policy makers to make themselves abreast with the capabilities and limitations of the Armed Forces and other security agencies. Integrating them in the process of decision making, planning future safeguards, pre-empting enemy plans and delivering a swift and decisive retaliatory blow in the event of any future attack can go a long way not only in fine-tuning our response system but also in building up our credibility as an emerging global power. Likewise, even as we move ahead in the now-on now-off Indo-Pak confidence building parleys, it is strategically vital to introduce there an implicit suspicion—rather, belief—that India can choose any means of reprisal to avenge any recurrence of Pakistan-exported or assisted attack. Alongside, Pakistan must also be made to visualise two aspects very clearly: One, Pakistan stands to gain far more from peace, friendship and cooperation with India in revitalising her economy through trade agreements and cheaper transit costs. Two, her policy of unleashing terrorism on India will hereafter become dangerously disadvantageous and highly unaffordable to it. These two aspects should be highlighted and projected to Pakistan and the world in absolute unambiguous terms sooner than later.
(The writer is a military veteran who commanded an Infantry battalion with many successes in counter-terrorist operations. He was also actively involved in numerous high-risk operations as second in command of the elite 51 Special Action Group of the National Security Guard (NSG). He conducts leadership training and is the author of two bestsellers on leadership development that have also been translated into foreign languages.)
Essar Oil was eligible for a tax deferment incentive of up to Rs9,100 crore for 17 years, however it failed to start production from its oil refinery at Vadinar in stipulated time
The Gujarat government on Monday sealed bank accounts of Ruia-promoted Essar Oil to recover sales tax liability of over Rs8,000 crore from the company. The state government's action follows Gujarat High Court asking it to expedite the recovery process.
Terming the Gujarat government's action as 'surprise' and 'disappointment', Essar Oil, in a statement said, "As a statement of its bonafide intent, Essar Oil has already agreed to pay Rs1,000 crore within 30 days to the Gujarat government towards the sales tax liability. Essar Oil has written to the state government requesting that a Committee be formed which can jointly discuss the modalities of the payment of the balance principal amount of Rs5,169 crore and consider a remission of the past interest of Rs1,932 crore."
"The request for remission of interest amount is based on the fact that the company sought the sales tax scheme benefit only after the Gujarat High Court verdict in its favour in April 2008 and further no interest amount was mentioned in the Supreme Court order," the company said.
Earlier, on 25th June, a division bench of justices PB Majumdar and Mohinder Pal rejected the petition filed by Essar Oil. The bench said, "The state government is directed to expedite recovery process of the entire amount due. We fail to understand that why the company (EOL), which had collected sales tax from its customers and invested the said amount in its own project, ask for such benefit on equitable grounds."
Following the court directive, Gujarat finance department issued a demand notice to Essar Oil for repayment of sales tax deferment benefits utilised by the company.
The state government had put the company's tax dues at Rs8,091 crore, which included interest and penalty.
Essar Oil said it has been writing continuously to the state government to work out an amicable payment schedule after the company lost the case in Supreme Court on the sales tax matter. It had also submitted a detailed payment schedule to the Additional Chief Secretary (Finance) on the 5th April but the submitted proposal was rejected.
The company said it also submitted the payment schedule to the Gujarat High Court on 25th of June when it issued orders asking the state government to recover the monies.
In January 2012, the Supreme Court also rejected Essar Oil's plea seeking sales tax deferment benefits under the Capital Investment Incentive to Premier/Prestigious Unit Scheme, 1995-2000.
"The request for remission of interest amount is based on the fact that the company sought the sales tax scheme benefit only after the Gujarat High Court verdict in its favour in April 2008 and further no interest amount was mentioned in the Supreme Court order. Essar Oil is clearly the aggrieved party on this matter despite making investments of over Rs25,000 crore in the refinery and a total of Rs1 lakh crore of investments in the set up in the state of Gujarat," the company said in a statement.