In your interest.
Online Personal Finance Magazine
No beating about the bush.
Despite much noise and fanfare, whether the Bill delivers for citizens, or for policemen and politicians, is yet to be seen
The draft of the ‘new’ Road Transport and Safety Bill 2014 has been on the road transport and highway ministry’s website and has been discussed at various forums for some time now. In some form or the other, this proposed successor to the Motor Vehicles Act has been in the offing for several decades and provisions have been added in fits and starts.
The end result appears to be a sort of hacked and pasted documents; bits and pieces are borrowed from online resources on legislation in other countries and some strong deterrents have been thought up locally. It is not likely to improve road safety for all stakeholders; it might have the effect of putting an AK-47 in the hands of a monkey would, considering that the previous Motor Vehicles Act was like a baton in those hands.
There appear to be very strong penalties and post-facto deterrents, but there is not much about pre-empting the causes of road accidents like issues of responsibilities and accountability for design, construction and management of roads. A motor vehicle-owner or operator can be penalised for missing a badly positioned traffic signal but a shopkeeper who usurps the pavement and a part of the road will continue to go scot-free.
In addition, several ‘exemptions’ and ‘benefits’ have been provided for those in power, making it a very unfair Bill. The culture of red beacons and toll exemptions, for example, will continue. While citizens may continue to face harassment for re-registration of vehicles, government employees will continue to be exempted.
The draft Bill does not appear to take into account two major parameters which are part and parcel of all sustainable and successful civilisations.
1) Free unhindered passage to all for legitimate purposes and intent, including for all people and vehicles carrying goods or passengers with minimal additional costs and inefficiencies;
2) Minimal inequity on the roads and lesser discomfort to more people, especially at inter-modal exchange points, with safety for all as a simple guideline. If you want to see what that means, please travel by Delhi Metro.
On the issue of automobile companies seeking and accepting ‘bookings’ for motor vehicles not yet in the market, or for those with waiting lists for whatever reasons, the customer/consumer’s interests and point of view appear to be the last parameter on the minds of those involved. As somebody who has booked a Maruti Suzuki Ciaz, I speak from first-hand experience as well as wider research and other people’s experiences.
First of all, even though it is the manufacturer who solicits advance bookings from customers, it is the dealer who collects the money and in the name of the dealer. This is wrong and needs to be controlled immediately.
Next, there is no interest payable on the booking amount if the delivery of the vehicle is delayed beyond reasonable limits. In the case of the Ciaz, the manufacturer announced a ‘launch’ and an ‘introductory pricing’ with great fanfare; but, when it came to deliveries, prospective buyers were informed that it would take at least another three-four months. I leave it to the customer to judge whether this is a fraud or not.
Third, the manufacturer is clearly launching an untested and unproven product, as can be deduced from the feedback on problems being faced with the upper-end variants.
If one were to connect the dots, it appears to be no more than a way to work with dealers to raise funds at low cost and not deliver the promised goods. Imagine, for a moment, that an airline persuaded us to buy low-fare tickets months in advance and, closer to the date of travel, simply refused to communicate with customers and actually withdrew the flight and route? Something similar is happening with bookings for cars, lately.
(Veeresh Malik started and sold a couple of companies, is now back to his first love—writing. He is also involved in helping small and midsize family-run businesses re-invent themselves.)
FDI in construction sector will help the cash-starved realty sector raise funds, says Nomura in a research note
The government on 29th October relaxed rules for allowing FDI (foreign direct investment) in the construction sector including housing by reducing the minimum built-up area and capital requirement for foreign investment in such projects — a move that will help the cash-starved realty sector raise funds, says Nomura in a research note.
The specific changes in regulations include:
(a) The government is now permitting 100% foreign ownership of projects in the construction sector through an automatic route.
(b) It has also eased the requirements on the amount of land, built-up areas and certain capital requirements for foreign investment in the construction sector.
(c) It will now also allow investors to exit on completion of the project or after three years from the date of final investment.
(d) Investors can now bring in minimum FDI of USD5mn within six months of the project’s commencement and the investor can provide the remaining amount of investment committed over 10 years.
(e) Further in the case of an investor committing 30% of the capital for low cost housing, the requirements on minimum built-up areas and on exiting the project have been relaxed further.
(f) Also, the government may in certain cases permit repatriation of the investment or transfer a stake from one non-resident investor to another before completion of the project.
The Department of Industrial Policy & Promotion (DIPP), under the Commerce and Industry Ministry, moved the proposal to attract more foreign investment in construction and real estate sector that is facing a slowdown and liquidity crunch since last 2-3 years. Although 100% foreign direct investment is allowed in townships, housing and built-up infrastructure and construction developments since 2005, the government has imposed certain conditions.
Between April 2000 and August 2014, the construction development including townships, housing and built-up infrastructure, received FDI worth USD 23.75 billion or 10% of the total FDI attracted by India during this period.
According to Nomura, the new measures are intended to lower the threshold for new investment and facilitate larger FDI inflows in the construction sector, which accounted for about 10% of total FDI inflows in India over the last decade. The measure will aid developers and boost the government’s longer-term reform on affordable housing and smart cities. Additionally, this should boost growth in the construction sector, which is critical for India's infrastructure development plans.