The central bank has invited quotations from a number of consultancy organisations for the index which will cover new construction activities in all major cities
The Reserve Bank of India (RBI) has initiated an exercise to set up a housing start-up index (HSUI) to track new residential projects in 31 major cities and measure the changes in construction activities, reports PTI.
The HSUI will cover new residential projects in all major cities including Delhi, Mumbai, Chennai, Kolkata and Bengaluru, among others, the RBI said while inviting quotations from consultancy organisations.
The RBI said that housing start-ups in a particular quarter would be estimated from the permits issued in that quarter and the various past quarters by using the rates at which the permits got converted into start-ups in the recent past.
“The periodicity of this survey will be once in three years. The agency needs to visit about 350 sites to get the details on house start-ups in each city,” the RBI said in the tender notice.
The housing index will give insights into consumer activity, as construction of new houses typically requires large investment.
“It depicts forward trends in the economy. An economy that is growing rapidly has an increased demand for housing and HSUI could be used to forecast demand for new houses,” the apex bank said.
The index would also act as an indicator of economic growth as more houses would lead to increased demand for inputs like steel, cement and credit. The data on housing would be collected for eight quarters. This data will be processed through a co-efficient matrix to arrive at the actual data.
The National Housing Bank (NHB) had last year decided to expand an index of residential real-estate rates from the five cities it currently covers to 36 cities. The index, called the NHB Residex, which is the country’s first official residential property price index, now covers Bengaluru, Bhopal, Delhi, Kolkata and Mumbai.
The Indian Railways has once again chosen an expensive foreign technology (TPWS) over India’s own patented ACD system
The Indian Railways recently decided to adopt the European technology Train Protection Warning System (TPWS) on busy rail routes to avoid collisions. However, the government has once again ignored the indigenous & cost-effective anti-collision device (ACD) system developed by the Konkan Railway and has instead opted for an expensive foreign technology.
According to industry experts, TPWS is not only expensive, but also less efficient compared to the ACD system. Rajaram Bojji, inventor of the ACD technology and former managing director, Konkan Railway, has also written to the railway minister on this issue.
In his letter addressed to the minister, he has stated, “You have chosen to approve more expensive systems which do not provide the protection against collisions as widely as ACD can provide. You are ill-advised.”
What is the point of using a so-called certified system, costing 10 times more, but not meeting our requirements? He said that European systems were being promoted, while condemning the successfully proven ACD. The home-grown system is certified by all tests of the Research Design and Standard Organisation (RDSO) and through field implementation—as being able to prevent all dangerous collisions in mid-section, at the station and near the stations.
Commenting on the features of the TPWS, a senior railway ministry official was quoted in a news report as stating, “If the train jumps the red signal, then brakes will be applied automatically under the TPWS system. A majority of the recent accidents took place due to trains jumping red signals in foggy conditions.”
However, Mr Bojji points out the flaws in this expensive imported system. “The entire expenditure on TPWS is to protect the red signal at the stations. But unless the driver observes a lot of discipline, the system fails in protection.” He said the ten times (more) expensive system is being provided only to cover a rail line of one kilometre before a red signal. During the first trials, where ACD was installed on some 15 trains, the cost came to about Rs1,50,000 to Rs2,00,000 per locomotive. The cost went up to Rs5,50,000 during the trial run. At present, the cost would not be more than Rs7,00,000 per locomotive .
The TPWS is estimated to cost Rs70 lakh per km, and will be implemented over an 828-km rail stretch. The total cost for installing the TPWS would be about Rs579.60 crore. On the other hand, the ACD will provide a more efficient and cheaper overall protection against collisions.
ACD, which is a no-signal equipment, has superior wide-area safety-enhancing capability, while costing much less individually. As a network, it delivers extremely superior performance as compared to signal systems. It also has an upgradation cycle in technology terms through progressive software and hardware additions, to eliminate the current old-fashioned Western technology-based signal systems. “This is what the signal department of the Indian Railways fears and thus is trying to fight tooth-and-nail against the introduction of the ACD,” Mr Bojji further stated.
The signal department of the Indian Railways demands a Safety Integrity Level (SIL) certification for ACDs. However, Mr Bojji stated, “ACD, actually not being signal equipment, but only an additional layer, does not need SIL certification, this was confirmed by TUV Germany too in their report for assessing the ACD.”
Finally, the market regulator’s eyes have opened up to the fund houses’ practice of lavishing their agents with expensive junkets; it may introduce strict guidelines to tackle this issue
Market watchdog Securities and Exchange Board of India (SEBI) is working to stop the unethical practice of mutual fund houses lavishing distributors with expensive incentives such as cash payouts and expensive foreign junkets in return for peddling their products. Besides finding such rewards unethical, SEBI is also examining whether these incentives are being funded by investors’ money in the name of fund expenses, a top SEBI official told PTI. SEBI is apparently contemplating strong remedial measures to keep such practices in check.
Moneylife was among the first to have highlighted how fund companies were in competition to organise lavish junkets for their distributors, unable to incentivise distributors through entry loads, post the ban. As SEBI has rightly pointed out, the bigger question is who ultimately paid for these fancy trips and cash emoluments? Deducting such expenses from investors’ money was a common practice earlier, till the regulator came down heavily on AMCs and prevented the fund industry from making investors pay for such extravaganzas. So, AMCs were supposed to bear the expenses on their own, but suspicions still abound whether fund houses are draining the investors’ kitty through some subverted measures.
There have been several instances of such dole-outs, ranging from the subtle to the outrageously lavish. For those distributors who had raked in the maximum moolah, HDFC Mutual Fund had organised a trip to Italy for four days. Earlier, Reliance Mutual Fund took some of its distributors to Kashmir while HSBC took them to Kerala for a long weekend. According to distributors, Templeton was running a scheme wherein any distributor who achieves his target was entitled to a foreign trip.
Others have been offering cash incentives to distributors. As an ‘early bird incentive’ to proactive distributors, Religare offered cash emoluments for certain number of applications received before a certain date for its Religare Monthly Income Plan (MIP) Plus. The same product had another incentive structure in place depending on the volumes gathered by the distributor. For single applications up to Rs99,999, distributors were offered 0.75% as commission. For mobilising applications worth Rs1,00,000-Rs4,99,999, the commission offered was 1% and so forth.
However, as we have pointed out earlier, while extravagant incentivisation of distributors is unethical, offering innovative incentives is an unavoidable outcome of the current regime. Small incentives to distributors are necessary for the survival of the mutual fund industry. In the absence of such incentives, the industry may well come to a virtual standstill.
The CEO of a prominent fund advisory agreed, “Incentives should not be the whole and soul of selling a product. I think that SEBI’s concern is whether they (fund companies) are charging it to the scheme or not. I don’t think they are saying whether they should do it or not. If AMCs feel that they want to reward their agents, it is entirely at their discretion. As long as they are not charging it to the scheme, it is alright. SEBI’s intent is to draw a line between what is exorbitant and what is okay—which is perfect. There has to be some leeway for allowing AMCs to reward distributors.”