Experts believe retailers may take undue advantage of the short supply coinciding with the festive season
Amid the high drama of traders from the largest onion-producing state of Maharashtra protesting against the union government's move to impose a ban on onion exports, experts warn that prices in the retail market may rise.
Experts say retailers are taking advantage of this situation, to make out an artificial scarcity during the festive season, and raise prices even after recovering their expenses. While wholesale prices have fallen, farmers are suffering.
Mandis in the onion-producing region of Lasalgaon, in Maharashtra, have remained closed since Friday demanding that the ban be lifted. On Monday, farmers from major onion-growing districts joined the strike, refusing to bring their produce to the APMC (Agricultural Produce Market Committee) market for auction.
Traders have demanded that the ban on exports be lifted as there is considerable production to cater to the domestic demand and seasonal production is expected to be good.
In the Mumbai wholesale market currently, onions cost Rs12-Rs14, whereas in the retail market it is as high as Rs20-Rs22.
Experts warn that the agitation over the ban on exports will not only result in price rise, but the stored crop may also be allowed to rot.
"The APMC market in Nashik is shut due to the protest. The prices may go up in the retail market," said an official with an agricultural institute.
According to a retail vegetable vendor in Mumbai, the price of onions is at about Rs20-Rs24, depending on the produce. "Nothing can be said about the prices till the protest is on. Meanwhile farmers are suffering and losing out on their produce ," he says.
Ashok Walunj, director at the onion and potato market at APMC, Vashi, told Moneylife, "Wholesale prices are already falling. The government has to lift the ban to stabilise prices."
The Mumbai market is now being supplied by the Pune market. Yesterday, 4,600 quintals of onions arrived at the Vashi APMC.
Meanwhile, politicians are trying to grab political mileage on the export ban issue, with Maharashtra's public works minister Chhagan Bhujbal and some Shiv Sena leaders appealing to the prime minister to urgently withdraw the ban.
Bala Nandgaonkar, MLA elected from Sewree in Central Mumbai, thinks the ban on onion exports should be lifted. "There is adequate production, so it has to be rightly used. Once the domestic demand is fulfilled, exports should be allowed," said the member of the Maharashtra Navnirman Sena, which has a strong local focus in its political strategy.
The special projects, launched as an integral part of Maharashtra’s housing policy, were permitted FDI and provided infrastructure at concessional rates. But while they appear attractive, the implementation and monitoring leaves much to be desired
When special townships with a minimum area of 100 acres launched their ambitious projects in Pune and Nagpur in 2008 (Mumbai does not have such a large, uninterrupted area), as a sequel to Maharashtra's new housing policy of 2007, some queries posted on various blogs revealed the nervousness of investors, specially those residing abroad.
A question about whether these townships would live up to their claims, received the following answer: "These townships provide infrastructure like roads, water, electricity, essential conveniences and security… If you value these things then you should go for it. Of course, there is a risk. What if these promoters are not able to run these townships? Because builders are not service providers, they build and sell, but they do not have experience of managing even the small township projects."
Another NRI asked: "How are they going to supply water and electricity at Xxxx and Xxxx? What's the source? Is that sustainable over the long term? Example, if they are going to bore wells, would they not dry over a few years? I heard Xxxx is going to supply water from the river. How can they purify and certify that? I am thinking of returning to India in the near future. By that time I would have spent about 13 years in the US and I do value a cleaner environment, quieter neighborhoods, infrastructure and amenities… But as you know, being so far away and out of touch, it is hard to guess how much is going to be delivered."
These concerns have now become reality, for in Pune, information received through the Right to Information (RTI) Act reveals, that while there seem to be many developers claiming their projects to be townships, in actuality only seven are legally 'special townships'. However, thanks to the Pune Collector not monitoring whether these seven have fulfilled the stringent conditions required for a special township, the public does not know whether these fully abide by the required norms.
So, what is the mandatory requirement under the Special Townships scheme? It has to be an integrated township with space for residential, commercial, educational, amenity spaces, health facilities, parks, gardens, playgrounds, basic amenities and public utilities.
Infrastructure facilities specifically include: (a) Water supply. The developer shall be required to develop a source for drinking water (excluding ground water source) or get a firm commitment from any water supply authority to meet the daily requirement of 140 litre per person a day. This excludes water required for fire-fighting and gardening. The storage capacity provided should be 1.5 times more than the requirement. (b) Drainage and garbage disposal. Environment-friendly disposal of sewage and solid waste management as per the norms of the state pollution control boad. (c) The developer shall ensure continuous and good quality power supply through captive power generation, or draw from the existing supply system. (d) The developer must get an environment clearance certificate from the Union Ministry of Environment and Forests (MoEF). (e) Twenty per cent of the area is to be reserved for park/gardens/playgrounds. (f) Eco-friendly amenities like solar water heating. (g) 60% of the area to be purely residential and out of the total floor area proposed to be utilized for residential development, 20% of the same to be used for residential tenements of 40 sq m. (h) Proper road area with the main road being 24 metres wide.
Are all the above conditions that are mentioned in the commencement certificate by the authority, fulfilled by the developer of such townships? In the case of Pune, queries under the RTI revealed that the Collector's office in Pune does not monitor whether the developer adheres to the norms for special townships or treats the project as just another mundane housing society, albeit more expansive.
RTI activist Vijay Kumbhar, who invoked the RTI on the issue, says, "Last year, I noticed that a hill was being cut at Ghotawde in Mulshi. On enquiry, I found that it was for the construction of a large township, on over 550 acres. However, I could not lay hands on the permission given to it by the collector's office, although the website declared it as a special township. Later on, wary of the information I was procuring, the developer changed it to IT cluster, with residential area thrown in."
Suspecting that potential buyers—particularly those staying abroad—are being cheated under the garb of `special townships' Kumbhar filed a RTI application under Section 6 asking for the number of sanctioned special townships in Pune. He demanded a list of special townships which have been given permission and proof of action taken against violation of stringent norms under special township rules. Also, this information should have been suo moto put up by the collector's office, under Section 4 which was not done. He filed a complaint under section 18 of the RTI Act to the State Information Commissioner, Pune region, Vijay Kuvalekar, pleading that the Collector and the Public Information Officer (PIO) be penalised for not abiding by norms under section 4.
The Information Commissioner ordered the collector to put the information on the website, failing which the collector, the PIO as well as the tehsildar would face penalties.
Surprisingly, and quite suspiciously, it took the Collector six long months to put the information on the website, despite the fact that the matter was of great public interest. According to the information put up, there are seven sanctioned townships in Pune. They are: Amanora Park, Nanded City, Blue Ridge, Kumar Ekluch, Riverview, Gulbakshi, Pearl Eiffel City. Mr Kumbhar, who has procured copies of the commencement documents of these projects, says, "All these commencement documents given by the Collector clearly state that the developer can begin work only after procuring environmental clearances and showing proof of how they are going to put the infrastructural facilities in place. However, the Collector has ignored this duty and has not monitored the same. As a result, the commencement document (which has listed conditions to the builder before commencing work) is being used as a blanket sanction to start the project. (What's also shocking is that one developer, on the basis of a commencement certificate of one 'special township', replicated it in another area, without applying for a separate permission."
Mr Kumbhar further states, "Thanks to the negligence of the Collector in enforcing the norms for special townships stringently, developers are getting away by claiming they are building special townships, when in reality they would be mere housing societies on a bigger scale. One of the premier so-called special townships has shown a picturesquely landscaped setting on its website, when in reality it continues to be an abandoned quarry with no infrastructure in place even now."
"Indians living abroad tend to book properties based on what they see on these websites (and giving the power of attorney to a family member/friend) and this can be very risky. Hence, it is essential that they be able to see genuine information about these projects on the Pune Collector's website, so they are not cheated."
After Mr Kumbhar's campaign, the Collector posted the commencement documents of the sanctioned townships at http://pune.gov.in/puneCollectorate/Support/township.pdf .
(Read details of the Maharashtra housing policy at http://housing.maharashtra.gov.in/english/dcmNew/pdf/HPeng.pdf .)
In April this year, Maharashtra Chief Minister Prithviraj Chavan stated in the legislative assembly that the special township scheme was tilted heavily in favour of the developer and that a review was required to bring in more affordable housing schemes. This is because the government has granted envious sops to the developer, like automatic non-agricultural permission, concession in stamp duty and development charges and a floating FSI. In lieu of this, the government has not got affordable housing in these townships that were supposed to be "inclusive".
HOW was the idea of Special Townships triggered off?
Wikipedia says: "Magarpatta is a self-contained residential-cum-industrial / corporate settlement spanning over 400 acres. It is situated along the Pune-Solapur Highway, in Hadapsar, Pune. Magarpatta City initiated processes towards private development of the 'Integrated Township' at such a scale in the country. The success of its development was instrumental in the state government of Maharashtra incorporating a key legislation, called the Special Township Notification of 2006, a part of the Maharashtra Regional & Town Planning Act of 1976, based on which many integrated township projects in Pune have sprung up.''
SPECIAL Township Policy - concessions given to the developer:
The Government of India has announced its policy to permit 100% foreign direct investment (FDI) for the development of integrated townships. In order to encourage private investment in the housing sector and to facilitate housing at affordable prices, the following incentives will be available for projects under the Special Township Area:
i) Non-agriculture permission will be automatic.
ii) Exemption from Urban Land (Ceiling and Regulation) Act, 1976.
iii) Government land falling under township area shall be leased out to the developer at the current market rate.
iv) The condition that only agriculturist will be eligible to buy agriculture land shall not be applicable in Special Township Areas.
v) There shall be no ceiling limit for holding agriculture land to be purchased by the owner/developer for such project.
vi) There will be floating FSI in the township. Unused FSI of one plot can be used anywhere in the whole township.
vii) The stamp duty rates applicable in the Special Township area shall be 50% of prevailing rates.
viii) A Special Township Project shall be partially exempted from payment of scrutiny fee for processing the development proposal.
ix) 50% concession in payment of development charge.
x) Development of basic infrastructure and amenities.
(Vinita Deshmukh is consulting editor of Moneylife. She is also an RTI activist and convener of Pune Metro Jagruti Abhiyaan. She can be reached at [email protected].)
Inflation-hit South Asia will see its economies expand 7.2% this year-with inflation forecast to hit 9.1%-while the region's India-led growth would hit 7.7% in 2012, a study by the ADB said
Hong Kong: Asia's developing economies will post slower-than-expected growth this year and in 2012 as key trading partners reduce orders amid worries about the global economy, reports PTI.
The Asian Development Bank (ADB) study said the region's economies would expand 7.5% this year, down from its 7.8% forecast in April while 2012 would see 7.5% growth, down from 7.7%.
Slower demand in the US and Europe "continues to cast a cloud over the region," said the Manila-based bank, adding that export growth in leading economies, including trade powerhouse China, had slowed 'substantially'.
"At the same time, strong domestic consumption and expanding intra-regional trade are helping to underpin still solid growth levels (in developing Asia)," said Changyong Rhee, the bank's chief economist.
"Since the onset of the global recovery, the growth in exports to (China) from several Asian economies has been stronger than their exports to the rest of the world."
The share of regional trade among Asia's largest economies increased to 47% in the first half of 2011, up from 42% in 2007, the report said.
The bank also warned that rising prices "remain a threat to many economies" with developing Asia's inflation rate expected to average 5.8% this year, up from 5.3% forecast in April, it added.
Regional inflation should then cool to 4.6% in 2012 as commodity prices fall "but central banks will still need to keep a close watch and may need to take remedial action", the ADB said.
Concerns about hot money flooding the region have eased as capital flows slowed in recent months, but there was a risk of an upsurge when advanced economies bounce back and debt markets settle, the report said.
"Capital has so far been flowing into the region at a manageable pace, but global economic uncertainty means policy makers should be prepared for greater volatility in capital flows," the report said.
The bank also warned that policymakers would have to focus on the region's demographic landscape with young populations "growing older very rapidly, which will put many economies under pressure" in the coming decades.
The bank's report looked at 44 jurisdictions stretching from the former Soviet states of Central Asia to some Pacific islands, but excluded developed countries such as Japan, Australia and New Zealand.
East Asia-including Hong Kong, China, South Korea, and Taiwan-remains the key economic driver for developing Asia, the report said, with growth forecast at 8.1% this year. That would fall to 8% in 2012 as China's economic engine slows, it added.
Inflation-hit South Asia will see its economies expand 7.2% this year-with inflation forecast to hit 9.1%-while the region's India-led growth would hit 7.7% in 2012, it said.