credai magazine - single page

8/7/2019 Credai Magazine - Single Page

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Iu

Oob

Nob

Db

2010

Quarterly in house magazine of CREDAI National

HOw DO westrategIze tO

prOvIDe HOmesfOr all

Improving Urban HousingCover Story

- Mukta Naik

- Anil Parameswaran Nair

BetweeNa rOck

a sOft place&

- Akash Deep Jyoti

creatINgsymBIOtIc

relatIONsHIps

Office real estate -

creatINgsymBIOtIc

relatIONsHIps


- Akash Deep Jyoti

Bugod- Vivek MenonBugod- Vivek Menon


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D mb,

Ou onn ndo h bn o dd n nd

ub onn o h min on oninuou

basis for the benet of our members. Hope you

have appreciated the articles on Management and

Spiritual aspects starting from the last issue. This

issue has an article from one of the most respected

brand consultants of the country Mr Harish Bijoor

discussing marketing strategies. You will also have

another piece from Mr. Anil Parameshwaran Nair

ho hi i n xui dio o h UBmIndia Magazine Property World. This issue also

has a bonus - as against one article by a Banker

every issue, we have contributions from 2 leading

Bn on on b nd noh on uu

opportunities of Real Estate.

Research Organizations and Newspapers have once again started predicting correction in Real Estate prices.

Such predictions can bring about sluggishness. I am not sure how far these reports are correct. On one hand

IT sector is booming again, millions and millions of sq ft of commercial space has been absorbed by IT and

other sectors during this year, IPP and Core sectors have shown better results during the 2nd quarter, RBI has

suggested that the banks should increase deposit rates to encourage savings and to reduce lending rates to

encourage investments, campus selections are back again, hiring by all the sectors is in full swing, income

levels have gone up, consumption seems to have picked up rapidly, the malls are brimming with activity again.

Sum and substance is that the overall atmosphere is vibrant. When the country is showing all round growth

and prosperity, I do not know how Real Estate can move in the opposite direction.

Union Government is targeting an aspirational GDP growth. Support to Real Estate can ensure that the country

kisses this magic gure of 9% growth. If you want to sell a pin you need Real Estate, if you want to sell an

elephant you need Real Estate, if you want to create jobs you need Real Estate, if you want to create infrastructure

you need Real Estate, you need Real Estate for every activity small or big. Therefore the basic raw material

for the growth of the GDP is Real Estate. As such the Real Estate deserves support at the supply side. It is hoped

that RBI and the Government of India take urgent and adequate steps in this regard.

rd,

a Bihn Hd,

edio

th edio i h mnin Dio o chd Houin, Bno nd p pidn o

CREDAI - Karnataka.


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D ind,

a h i o iin hi, ou nion i in

h id o nub o : 2g, cwg,

the Adarsh building plus a number of other

nd d iu ooin on h hoion,

threatening to join the list.

Politicians are, by the common people, presumedto be guilty unless proven innocent.

All this is very disheartening and is a matter

of great concern.

We, who are in the business of Real Estate development are vulnerable to many of the ills

that plague players in a License Raj namely corruption and coercion.

It is in our long term interest to push for a Regulatory Act that make Developers plus the

authorities accountable for their actions (or inactions). It is also in our interest to adopt and

implement our code of conduct - in letter and spirit. Not doing these things will be a clear

declaration of being short sighted.

Through CREDAI, we need to make many positive changes in our industry and also force

changes in others Should we act? Will we act? What is the way forward?

rd,

ku g

chin


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D find,

The Indian Real Estate Sector is witnessing a metamorphosis. The

sector, which was grossly neglected, is now taking giant strides

and is all set to dominate the growth curve of the country. And

as our economy grows, the aspirations of the new age nation

grows even faster.

Providing Housing for All has become the mandate not only

o h gonn, bu o o u ho nd in h

development of this core sector. The moot question that needs

o b nd i ho do hi hi nd? creDaI

is of the rm view that all stake-holders need to work together

to achieve and fulll this dream. With this end in view, we, at

creDaI, h onid h 10h NatcON N Dhi, in

which all the stake-holders, namely the Ministries of Housing,

Urban Development and Finance, will deliberate on what needs to be done. The convention has been aptly

titled as Housing for All Working Together.

Radical policy initiatives are required to be taken. Be it providing nance for creating infrastructure, motivating

the State Governments to frame effective policies for the development of housing, redevelopment of slums or

setting into motion policies by which new townships can be created with the greatest speed. The task, we all

realize, is not easy. We have to be very rm in our resolve, we need to be bold in our approach, we need notbe afraid to think out of the box.

A report published by McKinsey has assessed that the migration to our cities is growing exponentially. Indias

urban population is expected to soar from 340 million in 2008 to 590 million in 2030 and this urban

expansion will happen at a speed quite unlike anything India has seen before. MGI estimates that India needs

to invest $1.2 trillion just in capital expenditure in its cities over the next 20 years. These gures are startling.

It is important for us all to wake up and face the challenge with grit and determination. We shall endeavor to

draw and focus the attention of the Government to play a decisive role in bringing the various wings of the

government together in a single platform to build a strong sustainable and vital infrastructure to support the

growth of satellite townships.

We, friends, have a very substantive role to play, and in the process of expanding our businesses we will be

able to build the very foundation of our great nation. I call upon my fellow developers to stand united in our

resolve to build an India in which we would all be proud to live, with social harmony and respect for our fellow

brethren.

w d,

snoh k run

pidn, creDaI


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Let us together make India Truly Green!

- Syed Mohamed Beary 12

Recognition 20

NSDC- BANGALORE INITIATIVE

- Suresh Hari 36

Are you Future-Ready?

5 Steps to Building an Information-Edge In Real Estate

- Prashant Das, Divyanshu Sharma 38

Service tax -

Realty players caught between Writs and the Department

- S Sivakumar 46

Letters to Editor 55

17Neat INDIa- Umar Teekay

HOw DO westrategIze tOprOvIDe HOmes

fOr all

ImprovingUrban

Housing

Cover Story

- Mukta Naik

3028- Akash Deep Jyoti

creatINgsymBIOtIc

relatIONsHIps


n e!th chin&

19n e!

th chin&- Harish Bijoor

New Base Rate SystemO Bn- Rathnakar Hegde24

a lonHumilityin

poion Quo- Subroto Bagchi

1515


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edo

A. Balakrishna Hegde

edo Bod

Irfan Razack

Ranjit Naiknavare

Pradeep Jain

Niranjan Hiranandani

Dharmesh Jain

Harsh Patodia

Uzma Irfan

G P Savlani

Dgn & lou

GAAP Communications Pvt. Ltd.

Email: [email protected]

Pnng

Jwalamukhi Mudranalaya Pvt. Ltd.

Please send in your feedback,

contributions and advertising queries to :

GP Savlani,

Resident Director,

Confederation of Real Estate Developers

Associations of India

CREDAI - National Secretariat

703, Ansal Bhawan,

16, K.G. Marg,New Delhi - 110001

Ph: 011- 43126262, 43126200

Fax - 011- 43126211

Email: [email protected]

Website : www.credai.org

Inhouse Magazine for Private Circulation.

Not for sale

- Rathnakar Hegde

fUtUreOppOrtUNItIes &

BaNk fUNDINg

real estate

swamI sUkHaBODHaNaNDa

Of prasaNNa trUst

- Swami Sukhabodhananda

Bu

god- Vivek Menon

21

- Anil Parameswaran Nair

BetweeN

a rOck

a sOft place&41

44

tHe aNtaND Its

pHIlOsOpHy50


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l u oh

India Truly Green!

ndias population is projected to be 1.26

billion by the year 2016 and it is expected

to overtake China to be the most populous

country by 2050. Furthermore around 40

crore people are estimated to migrate from rural areas to

urban centres. It is therefore imperative that India plans for

high economic growth in all sectors. Such growth will leave

behind large carbon footprint and green house gases. Another

alarming factor to note is that human consumption of Natural

Resources has doubled in last less than 50 years and presently

we outstrip what the Earth can provide by more than half. Even

If we continue to consume at the present rates, we would need

two Earths by 2030. Vast majority of world population does

not enjoy a fair standard of living while European & Americanouni onu o hn hi du h o od

natural resources. If the developing world were to maintain

a living standard of European countries, we would need two

I

Editors BoxAmazing effort by Indian Green Building Council that should

inspire all of us to do our bit and at the end of the day its

a win-win both for Developers and for Mother Earth.

- Syed Mohamed Beary

nd h h, hi

oud nd ix nd

h h o inin

h iin ndd o

U.S.A. To negate this

nd in od o ii

growth without impairing

h hbi h

o on ou,

recycle and leave the least

ecological footprint.

th indn Gn Budng coun

(iGBc), a part of cii h n in

strides and is successfully leading the

Green building movement in India.

iGBc is consciously striving to teach &

inu Gn p nd bi h i u i

in hnin nd nd ind o Gn P

- a w o . Its vision is to sensitize key stakeholders to

embrace green and pave way for India to become a Global

C r e d a i i s s u - O c t o b - N o v m b - d c m b - 2 0 1 012


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leader in Green buildings. To achieve this, it aims to champion

oo on nd bin Gn unb o

the Indian mainstream by enlisting members from every walk of

life to participate in various green initiatives and simultaneously

marshal widespread dissemination and awareness campaigns

through local chapters spread across India. IGBC has come a

long way in its endeavour with creditable achievements (some

of which are enlisted below) to place India as a world leader

of Green Building.

IGBCs achievements & leadership in India is commendable.

From just 1 green building in 2001 measuring a mere 20000

sft, its efforts have helped to remarkably raise the gure to

765 green buildings of over 465 milllion sft. In addition to

the same in the last 9 yrs it has also introduced around 150

varied green building products and equipment and enrolled

over 1046 members (including 90 founding members). Not

only this, it has also successfully made an inroad in Govt.

circles with 33 green buildings of 6.38 million sft.

Furthermore IGBC has launched following rating systems to

ui din :

IGBC Green Homes IGBC Green Factory Buildings

IGBC Green SEZs (Jointly with Ministry of Commerce &

Industry)

LEED Indi Nc (N conuion)

LEED India CS (Core & Shell)

A host of other programmes are on its anvil and IGBC

is working on initiating the following shortly:

n IgBc gn cii

n IgBc gn shoo

n IGBC Existing Buildings (Retrot)

n IGBC Landscape

to bo o ou nd i h ouni

needs Government & Industry collaboration and

People Participation. This could be achieved through

augmenting membership and impelling Govt.

partnership through legislation and by introducing

various incentive schemes and simultaneously

galvanizing Stakeholders i.e. Developers, Architects,Product manufacturers, Corporates, Government

ani, adi o b n

initiatives.

Going Green as a community means that we need to

be more responsible and proactive in protecting the earths

ecological balance. This environmental consciousness should

be present, whether we are dealing with government policies,

or industrial and economic activities, or in our daily living. On

a larger scale ultimate transformation can only come through

education; therefore we must also encourage and provide

our students with the knowledge, tools, and inspiration to

envision and aspire for a sustainable and peaceful world.

In this way, we would have built the foundations for a more

environmentally-conscious generation. The old adage

W no Wn no advocates sustainability in simple

terms. rdu, ru, r houd b h n o

our daily life.

In n nihnd o ob nin o h nd o

proliferating greenery and adopting green practices, IGBC is

a trendsetter and sets the pathway for a Green future. IGBC

beckons one and all to adopt Green practices and be its

ambassador for Green. Come join hands and partner with

IgBc o Indi h ounn o h gn Buidin

Movement. To know more about IGBC and become a member

kindly log on to www.igbc.in

SYED MOHAMED BEARY is the rebrand chairman of IGBC,

Bangalore Chapter and also the C & MD, Bearys Group,

CREDAIMember.



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ere is a lovely piece from a professional I have never

met but like many of you, keeps in touch over the

Internet. Dr. Ramana is a neuro-surgeon from Vizag

and he has this absolutely humbling story to share.

The ghat-road passing through deep jungles on the way

from Koraput to Visakhapatnam (Vizag) is dotted with

hamlets inhabited by tribal people living in harmony with

nature. Medical facilities are not easily available unless they

travel to the nearest town - sometimes to a primary health

centers through forest paths carrying the sick on a make

shift stretcher. Usually the literate among them or patients

o on ho h i vi o h o

specialized treatment. This is how a family of four landed up

at our hospital one night.

The father and mother were holding a thin boy of nineteen

years in their rough, weather beaten arms. The younger sister

was hiding behind the mothers sari awed by the hospitals

bright lights. The troubled little group radiated innocence, pain

and poverty. The boy was shifted to Neuro ICU immediately. He

was unconscious for fteen days and also malnourished due to

vomiting and dehydration. Prior to becoming unconscious he was

having headache and fever. The boy was diagnosed as having

raised intra-cranial pressure. I called aside the boys father and

spoke to him in Oriya. I told him that his son needed a CT Scanrst and later he may require surgery.

The father asked me to go ahead with the treatment and not to worry

about expenses, as he had brought ve thousand rupees with him.

The answer grounded me. The expenses could run up to more

than ten times the amount! I explained this to the father of

the boy. We gave him the other option - of shifting him to the

government general hospital for continuing treatment. The

family members became annoyed at the suggestion and wept.

They did not agree and I had to give up persuading them.

Giving up the persuasion trail, I requested the scan center to do

free a CT scan of the brain. The scan conrmed hydrocephalus;

ondition that required surgery. He needed a shunt tube to

H

Editors Box

One becomes a professional more through the quality of

work he does than due to his qualication, is the essence

of this beautiful real life anectodote.

- Subroto Bagchi

a lonHumilityin

poion Quo

be put from the brain to the

abdomen.

The hospital administration

obliged to treat the patient in

the general ward free of cost.

Doo dond du hboy needed; other patients

ndn nd i

helped them by giving them

food and moral support in

spite of language barrier.

The boy was operated upon and he made remarkable fast

recovery. Even before a week passed, he was eating by himself

and walking around the ward. He started gaining weight.

All these happenings gave me a real feel good within andappreciation from others.

But the patients father was stone-faced with no expression of

happiness nor did he offer thanks. This attitude troubled me

throughout their stay in the hospital. On the day of discharge

I oudn i in hi i h houd b hnu o u

for putting his son back on his feet again and almost free of

cost in a modern corporate hospital. He was surprised and

asked why should he? The purpose of bringing him here

was to have him cured - so why the thanks? If that was not

the case, Why would I have taken all the pains to shift himhere?, he asked me.

Then he told me that he had sold all the land he had for ve

thousand rupees, and for rst time entered an unknown place.

Other than his hamlet the only place he had ever visited is the

weekly haat (open air market) near his village to sell the forest

products he collected for the whole week. He wanted to save his

child and that alone made him venture into a big city.

The halo around me crumbled.

My contribution did not seem too much compared to what he

was doing for his son.

a hi I o o h ion in , bu I i

felt like laughing.

suboo Bhi i b non o o-oundin mindt in

1999, Indias most admired companies across industries.

In 2008, Bagchi took on the role of Gardener at MindTree

where he spends one-on-one time with the Top-100 leaders

at MindTree to expand leadership capacity. Bagchi is on the

Bod o gono o h Indin Iniu o mnn,

Bangalore. Bagchi has authored three business best-sellers:

The High Performance Entrepreneur, Go Kiss the World and

The Professional as Penguin Portfolio books. Currently, he writes

a column titled Zen Garden in Forbes India.



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couple of months back I was in Delhi to attend

one of those ostentatious weddings. There

ou union, h in Dhi

swanky hotels & one in the brides sprawling

mansion in Rohtak, Haryana. For the Rohtak do, we were

ferried from our Delhi Hotel in a eet of Mercs & I had the

opportunity to travel with an American gentleman called Joe.

This was Joes rst time in India & in the previous two days he

had only seen the better part of Delhi. Until we hit the road to

Haryana he seemed to have a wonderful image of India from

what he had seen up till then easily complimenting the Indian

IT juggernaut stories that he was fed with back home.

The three hour trip between Delhi & Rohtak was like a rude

shock to him. The lth & the squalor, the dust & the slush, the

i od & h ndin , h dnd bu &

unkempt shop frontsthe overall ugliness that kept hitting our

view with unfailing regularity was evidently too appalling for

his senses. He wanted to know if it was the same with rest of

Indi !!

If any of you have traveled on that road and also across

India, you probably would have replied that it is much worse;

except that we are so used to the mess that our senses have

become numb to it. It takes an occasional foreigner to wake

us up & bring it to focus. No denying the fact that India is a

huge mess.

Joe had another disturbing question- I know you guys are

taking huge strides in technology & your economy is booming;

I have no doubt that you will be a developed country pretty

soon; but how are you going to clean up this mess?

Indeed how are we going to clean up this mess? The uncleared

garbage piles, the irresponsibly left behind construction debris,

the carelessly thrown trash, the ever increasing mounds of

a

Editors Box

Swanky India & Dirty India. Two distinctly different sides

of our country, are beautifully picturised in this article. The

author suggests the solution to bridge the two party is in the

hands of the Developer. So true.

Neat INDIa - Umar Teekayplastic waste, the bowel

churning sight of spit

& hun in hidd o ou ii, ou

badly maintained public

transport & indisciplined

trafc, the haphazardly organized buildings & shabbily

inind d, h qui o b h i

cluttering our sky-line, the garishly displayed publicity

materials, the unclean roads, the ugly public infrastructure, the

ever mushrooming slums, the smell, the stench, the pollution

h do on bin? and ho i h iniii o

hi ih?

I dont think there is an easy answer to this. But there is no

harm in discussing some basics.

A very basic requirement of any cleanup drive is to arrest the

spread of lth. Primarily we must nd ways & means to prevent

its continued generation. No doubt this is the responsibility of

every single Indian. But in a country where most citizens have

more pressing basic needs, it would be impossible to make

neat & tidy India their priority; not now, not for a couple ofdd! moo, hi i in h doin o hbi nd od

habits die hard. So obviously, one needs to think of some

doable initiatives that can be the responsibility of a chosen

few and in turn can shape a new Indian habit.

I am reminded of a simple grannys rule Neatness begets

Neatness. In other words, neatness in the surrounding quite

often induces neat habits. While it may be an Indian habit to

be irresponsible or indifferent in dealing with public spaces,

there is no denying the fact that the human brain is conditionedto appreciate things that are neat & orderly.

An example that I can think of is- if you travel with our desi

cousins on a Southeast Asia tour, the very same people who

would spit paan & throw trash casually in India would suddenly

behave disciplined in Singapore & become the same

desi guys again the moment they reach Thailand

or Vietnam. I dont think all of this has

to do with the legendary stringent



18/60

punitive measures that Singapore once had. I feel it has more

to do with the general neatness of the country that the mind

quickly appreciates and prevents one from disturbing.

Closer home, I have another encouraging example. Take

a look at Bangalore buildings of the pre nineties. Those

buildings, like anywhere in India, had less emphasis on the

common areas like staircases, lobbies etc. During the nineties,thanks to the pioneering efforts of some architects and builders,

we started seeing jazzed up common areas with high-end

materials & nishes. And, it is now a recognized fact that with

h hn, h o h bn d hn in h

very same Bangaloreans age old habit of spitting in staircase

corners & dirtying the common areas of these buildings.

Keep it neat, and generally people will keep it that way is a

time tested truth. On the contrary, if a place is a mess, even

the most civic among us misbehave. If you travel extensively inChina, you will see the super-duper elevated 8-lane freeways

and most exits from them will lead you to the old economy-small

town-cluttered-roads. The same driver who was an embodiment

of super civic sense on the 8 lane will suddenly behave so

irresponsibly the moment he hits the small town roads. How

else would you explain this?

I am not sure my theory is absolutely right but I would like to

believe that it is, because in which case, there is some hope;

bu bn h onn nd o buid lot of this can be taken care of. Saying No to Ugliness can

be a national campaign, like Italy did some years back with

a fair degree of success. If governments continue to build

yovers like the ones that we encounter on our way to the

Bangalore Airport, continue to erect road dividers that are a

visual affront, continue to make public buildings that are a

public shame, continue to ignore the post construction mess,

continue to overlook the need for clean wash rooms in public

places, continue towell, do an endless list of things the way

they are doing now, it is meaningless to have any hopes.

And as for the builder community, haphazardly organized

buildings, irresponsibly disposed debris...here too, the list

is quite long. Umar Teekay heads Teekays group, which is into corporate

interior t out across India. Besides designing and tting out

work places for IT companies and corporates, Teekays is also

known for some of its projects for Govt institutions like NIC,

STPI, IIIT-B etc. which stand out for their non-sarkari, corporate-

class look and feel.

If the government agencies and the builder community can

join hands to spearhead a campaign that can result in visibly

distinct public spaces, we can probably hope for people to

follow suit and maybe, we will be able see a neat India faster

than we imagine. Added to this, if we can train and enroll

the teaching community to inculcate neat habits in our future

generation, it can be far reaching.

Incidentally neatness is a close companion of cleanliness.

Cleanliness invariably follows neatness. While cleanliness

is slightly abstract and difcult to enforce, neatness can

be ensured because it has a perceivable and appreciable

presence. Thats why, probably, its always neat and clean

and not the other way around. Like Green India, Neat India

should be an equally important campaign.

Incidentally, our American friend Joe was greatly impressed

with the opulence of the wedding in Delhi & Haryana. Hewas particularly envious of the way an average rich man

gets pampered in India. Our host in Rohtak had a palatial

estate, a battery of uniformed drivers, a large contingent of

well groomed personal attendants and the likes. As long as

we were inside the venue, witnessing the gala rituals, Joe kept

appreciating the comfort that a rich man can afford in India,

which many of the rich in the United States cant afford, what

with 42 dollars per hour wage bills! But when we came out

and hit the road back to Delhi, Joes envy vanished. This is

what he said, before he preferred to take a bumpy snooze

than get disturbed by the mess out side- Irrespective of the

comfort that you can afford in private, you have to go through

this mess for most part of your waking life. Back home, I may

have to drive my own car, tend to my own gardens, cook my

own food, repair the leaking faucets myself, but when I go

out, I dont have to meander my way through the mess and

negotiate through the chaos

How true! The nation that has already arrived continues to

live in lth! How disgraceful!

Time we did some thing towards Neat India.



19/60

n e!

n h in u I h id,

ouh, d nd hid, h i on

insight that has held me in good stead. This

is the insight of Integrity branding.

Integrity branding is all about saying the simple truths in your

brand communication process. Stick to the tone and tenor of

integrity and you cant do no wrong!

Let me look at it in a manner of detailing the concept at hand.

The point is simple. All consumers are essentially truth seeking

animals. Yes, all of us lie in some small manner or the other.

These are really the small lies that make the fabric of our

modern day lives. Small lies that ward off the inconvenienceof a lie-less society.

Despite all these small lies, we are essentially truth seeking as

consumers. When you buy a toothpaste, you expect honesty

out of the entire exercise. The consumer-brand interaction

process is a relationship. A relationship quite like the many

relationships we go through in our social lives.

When you get into a relationship with a member of the

opposite sex, or let me be politically correct and say memberof the same sex even, you expect just one primary thing out

of the relationship. The truth. There is no relationship you get

into expecting dishonesty and the lack of integrity.

Very simply put, consumers get into brand relationships based

on the expectation of the truth. But does she get it? And how

much of it? And how frequently so?

My belief is that the brand that offers the most of the truth

most of the time in this continuous relationship is the one that

succeeds. The brand that fails on this count is an utter failure

right away, or on the path of a self-fullling prophesy of doom

round the corner.

I

Editors Box

One short ar ticle shows us the marketing tool that all of us

have been looking for ever since we started selling.

th chin&

- Harish Bijoor

l iu hi ih

an example. Let me choose

my favorite gourmet table

bird for this example, the

hin! l h

of them.

There are really three

hin in ou in

lives. And remember, all of us are marketing people, since

there are only two kinds of people in the world. The marketing

person, who markets to others. And the marketed-to person

h oh nd!

Imagine three chickens out there. Each of the chickens is a

manufacturer and a marketer. Each of the chickens has done

something they are very good at. Each has laid an egg. And

each of the eggs looks alike.

Each of the marketer chickens takes a different path to market

their respective eggs.

There is the rst chicken, which I call the Shy chicken. This

chicken looks at the egg it has laid and nds the productquality to be all of 100. It then stands up, looks at the target

audience of potential consumers and whispers with a decibel

of shout that is at best 2 on a scale of 100.

This chickens whisper is heard by very few of those in the

target audience. Even those who hear of it, hear it as a faint

whisper. The promise offered by the whisper is just 2 on a

scale of 100. Those few who hear the whisper actually come

to see the egg, lured often by the under-shout that creates quite

a bit of mystery in the consumer at hand.

When the few consumers actually arrive to see the product,

there is great joy. The consumer expectation of 2 is rewarded



20/60

with a delivery of 100. The positive strokes offered in this

purchase is +98. The negative of this approach of course is the

fact that it scores very low on consumer awareness scores.

Look at the second chicken then. This is what I call the honest

chicken. This chicken looks at the target audience and shouts

out the product offer with a shout level of decibel 100. The

shout quality is equal to that of product quality.

The pros of this approach is apparent. Awareness scores are

good. Everyone has heard that the chicken has an egg to offer.

But there is a problem here. Consumers do not necessarily

respect honest chickens. When the consumer has heard the full

story, he does not want to see the egg at all. There is just no

mystery. Only a few arrive to see the egg, and these are the

only ones who actually need an egg. And when they arrive,

they expect 100 and get 100. No positive strokes and no

negative. The potential of a buy is low as well.

The third chicken is waiting. This chicken finds the

competition hot. This chicken gets onto the rooftop and

shouts with a decibel value 400. The darned chicken

h id n bu hou i i h id n oid!

The awareness scores are terrific. The enti re town lands

up to look at the phenomena. The expectation is 400.

The delivery is 100. There is a negative stroke quotient

of -300. And nobody buys!

All these three chickens and their respective approaches are

out there for the marketer to choose from. Each of us makes

this choice every living day.There are variations available in

the gamut of 0-400 in terms of shout levels. Different marketers

choose differently.

But guess what, the chicken that shouts with a decibel of 80

is the one that succeeds the most. Also, after 400 what? Back

to a decibel of 2. In a market where everyone is shouting at

400, the one chicken which whispers the least is the one that

is heard and trusted the most.

Think about it. Which chicken are you as a marketer? And

which chicken are you as a working person? And whichchicken are you as a person living in a family of your own?

The author is a brand-domain specialist and CEO, Harish

Bijoor Consults Inc., a consulting practice with presence in

the markets of Hong Kong, Dubai, UK and India.

Email:[email protected]

u b o creDaI kn,

Mr. M.R.Jaishankar of Brigade Group

was honored by Builders Association

o Indi, kn cn duin hi

Annual Celebrations.

Mr. P.C.Mohan, Honorable Member of Parliament

did the honors in a glittering function. BAI Karnataka

Center deemed it t to honor Mr. Jaishankar for his

dedicated service in improving the Construction

Industry and for creating Worldc uu in Bno

and elsewhere. Mr. Balaveera

Reddy- former Vice Chancellor-

VTU, Mr. Chamaraja Reddy- Past

President & Trustee of BAI , Mr. Appi

Reddy- Vice President- BAI and Mr.

K.Sridhar- Chairman, BAI Karnataka

center were present. The speakers

appreciated the effort of Mr.

Jaishankar in creating exemplary

structures and wished many more

members of the fraternity join his

O

re

cO

gN

ItION

dedication. While thanking the Association for the honor

bestowed on him, Mr. Jaishankar requested fellow builders to

oo od o o hn nd o ih ind

dedication to complete structures that will stand the test of time

and with superior quality. He compared the efciency and

quality of work turned out elsewhere in the world. His specic

n o chin, h o unou nd h innn

of infrastructure, was a noteworthy point.

S.Suresh Hari



21/60

ith twenty percent of the worlds population

and six percent of the worlds fresh water

ou, Indi un nn

policy seems ill equipped to address this

fundamental problem. In a country like ours which is blessed

with signicant sources of water both in terms of the melted

ice from snow capped peaks and adequate precipitation,

h ouion o hin o on nn

than in addressing the statistic. A search in Google

reveals innumerable theses that have been written by various

onn nd non onn ni on

management. Pundits and professors alike have suggested

various doomsday scenarios to wake up both the polity and

bureaucracy to this impending problem. While the ink has

dried on many a report, little seems to have been done to

address this issue. Every year, drought stricken areas across

the country cry for as much help as ood inicted areas. For

once rural and urban India seems to wake up to the same

dilemma.

While Dr. K.L. Raos proposal back in 1972 to link the Ganga

to the Cauvery and Captain Dasturs proposal in 1977 may

have had certain inherent aws in them, the intent to interlink

h i houh nd n h ound o on

many a scholar including President APJ Abdul Kalam. While

one might argue that hyperopia has never been a virtue of our

polity and expecting them to invest so much and see such a

gigantic project through to completion may be wishful thinking,

the solution should be driven by the fundamental right to life

guaranteed under our constitution. The project, if properlyplanned and executed could kill two birds with one stone.

Coming to the urban scenario, paying fourteen to forty rupees

for a sip of aqua addresses more of a fashion statement than a

fundamental necessity. Mineral water or regular from a white

gloved steward says it all about our urban water supply system.

While we have looked to the River Cauvery to grant us the

elixir of life in Bangalore, we have ignored the huge potential

in our own backyards. The garden city (Bangalore) of lakes

has been reduced to a city of cesspools, so is the story of most

w

Editors Box

Much has been written about solution to water problems buthas it even served as a wake-up call asks the author.

Bugod- Vivek Menon

of our cities in the country.

th obiou no d,

where can we nd solace?

An interceptor sewerage

system, for starters, would

nu h h

generated nds its wayino n

plan (STP). An effective

oid nn

system through a global

nd, h h udd

h ubn d hn o h nin ihin h o

municipality, would ensure an eco friendly approach

and minimize contaminated landlls. Both of the above,

implemented effectively, would keep our storm drains and

hence lakes clear of contaminated efuent. As an example,

the slaughter house at Tannery Road in Bangalore currently

spews blood and fecal matter that nds its way into Ulsoor

Lake. Sustained efforts from many local groups to shut down

the abattoir and/or install an efuent treatment plant at the

site have been met with litigation and false promises. Similar

situations may be true to other cities also. In the United States,

all waterways like our very own Rajakaluves, come under the

jurisdiction of the US Army Corps of Engineers. This guarantees

that no one ever encroaches or contaminates these lifelines.

Most of our country is blessed with adequate rainfall barring

the western deserts. While the urban sprawl has depleted

ou ound ou, i i i o u o bih

aquifer recharge zones, or protected green cover, where all

development is prohibited, to ensure adequate inltration. A

storm water pollution prevention and ood mitigation plan for

every project that disturbs virgin land, would ensure that urban

areas stay free of ooding while construction does not clog

or contaminate our storm systems. In the absence of a strong

policy to regulate and protect our water systems and the will

to act, we may end up contaminating this precious resource

that we as a country have been blessed with.

Vivek Menon, P.E., has been an advisor to various governments

on public policy related to infrastructure and water management

and is currently an infrastructure subcommittee member at the

Center for infrastructure, Sustainable Transportation and Urban

Planning (CiSTUP) at the Indian Institute of Science.

We had printed the following article by the above author

Sri. Vivek Menon in the last issue but a portion went missing

while designing. We are reprinting the same with my sincereapologies to the author for the printing error.

edio



22/60

did no h o h o o n innon i

life for the engineering world to wake up to the crude

reality of mediocrity in the practice of engineering. The

compound wall built by a local contractor in Bengaluru

for a government agency, came crashing down during a heavy

downpour, claiming an 18 year old victim. While the judicial

process plays out in delivering justice to the victims of the family,

the engineering community is at a loss for answers, not as to

what caused the collapse but how to prevent such mishaps in

the future. While private players in the real estate space have

chosen the best and brightest to plan, design and build their

edices for them, what has suffered the wrath of incompetence

are works in the public domain. Most of us who have traveled

abroad have come back starry eyed and bewildered by the

progress in the construction of civil infrastructure. Whether it is thechunnel connecting England to the rest of Europe or the Big Dig

in Boston, where all the ugly interchanges in downtown Boston

were taken underground to make way for green lung spaces,

weve all been amazed at the quality of workmanship and the

adherence to the best practices in construction.

Now zoom back to our very own Bengaluru. Other than the

International airport that was built through a public private

partnership, most of our modern public infrastructure is not even

worth a mention. The magic boxes, fondly referred to by the

engineering community as tragic boxes or match boxes,

ih bui in obon i o ii nin hn

their heads in shame. Signal free corridors that are an unknown

concept for most urban arterials, collectors or distributors, in the

o h od, hid h h nx b id o id

bread. The Richmond road yover, which for the longest time had

the dubious distinction of being the only yover in the world with

an intersection until recently, threatened to nd its way into the

Guinness book of world records. Facts stated, so whats new,

one might ask.

India is today growing at a brisk pace of close to ten percent

year on year, with infrastructure spending exceeding over oneLakh crores, by conservative estimates. Currently, the onus of

planning, spending and monitoring the outcomes of this initiative

rests squarely with governmental bodies at the local, state and

central level. The apathy and indifference towards delivering

a product that one can be proud of is palpable even to the

untrained eye. The Jawaharlal Nehru National Urban Renewal

Mission (JNNURM) aimed at closing the disparities in spending

capabilities between various Metros and committed a sizeable

chunk from the national exchequer to the state and local bodies.

For a country that at one time was looked at as a third world

economy with foreign exchange reserves languishing at USDtwo billion, India has come a long way to becoming the fourth

largest economy in terms of purchasing power parity. The dearth

of nancial resources is a thing of the past but the way we are

I

tod B Tomorrow...

ruin h pi o eninin

spending these resources is questionable. And that brings us to

the crux of the challenge; do we have a regulatory mechanism

to ensure that our valuable nancial resources are well spent in

building for our future generations.

As planners, designers, engineers and constructors our mandate

is to be the builders to the Nation. It is hence our responsibility in

ensuring that the best practices come to bear on our infrastructure.

Quality control, which is such an integral part of any effort, is veryoften neglected. The timeliness of the effort, referred to in engineering

parlance as a Schedule is never adhered to. The time value of

money is a forgotten concept and most projects see huge cost

escalations and overruns. The cost of these misadventures is hence

borne by the exchequer or taxpayer ultimately. Without a mechanism

to afx responsibility or accountability, the result is an unplanned

product of poor quality delayed beyond expectations. That brings

me to the next question. How does the rest of the world do it?

To answer that, I would like to cite the example of the system of

engineering practice in America. The Engineering Practice Act, thatcame into being to regulate the practice of engineering and afx

responsibility and accountability has done a stellar job in ensuring

that works done in the public domain are par excellence. Under

the Act, only duly licensed persons may legally perform, or offer

to perform engineering services for the public. Furthermore, public

works must be designed and constructed under the direct supervision

of a licensed professional engineer. The terms P.E. or professional

engineer can only be used by persons who are currently licensed

and anyone who violates these parameters is subject to legal

penalties. To be eligible for a professional engineering license,

engineers must have achieved certain professional milestones. Theymust have earned an engineering education, performed certain levels

of engineering work experience, and passed specic examinations.

To keep their license current, engineers are required to complete a

certain number of continuing education credits annually.

One need not look very far back to see that we, as a people, had

the power to build monuments of uncompromising magnicence.

Whether it is the temples of Hampi, the Krishna Raja Sagar Dam

on the Kaveri or the Vidhana Soudha in Bengaluru, they stand tall

as marvels of our achievements in the eld of civil engineering.

However, the new crop leaves much to be desired. When prideis lost in the quagmire of deceit, corruption and indifference, the

rule of law has to step up. In the absence of self enforcement,

the only way to prevent degeneration of value systems is to raise

the standard in the face of mediocrity. The key however, will be

to regulate the practice without letting the evils of present day

society such as corruption override our noble intentions. For that

will only lead to a greater License Raj.

Lest this initiative fall on deaf ears, the idea has been presented

at one of Indias premier institutions with the hope of getting the

b nd h bih o ou h a nd no i in h

true spirit. Hopefully, this will someday help us restore the glory of

this halcyon nation that boasts some of the greatest engineering

marvels that mankind has ever known.



23/60


24/60

acKGrOUND. Wh Bnhmk Pm lndng

r (BPlr o bnhmk Plr) dd no wok?

Before introducing the base rate system, banks used a rate

system called Prime Lending Rate (PLR) to set their lending

rates. The problem with this system was, banks manipulated

hi plr o o o o diound ndin o

the borrowers. It may cause loss for banks if they offer loan

with much cheaper price. The real intention of the RBI is to

make banking system much stronger after the global nancial

crisis.

The PLR was introduced in 2003 to ensure that banks publish

their lending rates based on their true cost of funds. All lending

was expected to be at or above the BPLR. This was a fair

expectation, as you cant expect a bank to lend below its cost

of funds. However, over a period of time, competition forced

many banks to do exactly the opposite.

Banks stopped adjusting the BPLR when the interest rates wentdown therefore, the BPLR lost its relevance as a rate reecting

the cost of funds for banks. And when the RBI allowed lending

bo Bplr , h bn d iin ou o o hi

on bo h plr / Bplr (o non ub-plr o ub-Bplr

loans). In fact, the loans were priced as BPLR minus 200 basis

points! (That is, 2% less than the BPLR)

Base rate system provides more transparency on setting the

rates. Each bank has some criteria to set their base rates. Base

Rate System is for the banks to set a level of minimum interest

rates charged while giving out loans. This Base Rate System

has many advantages over the older method of Prime Lending

Rate (PLR). One advantage is, in the Prime Lending Rate (PLR),

B

Editors Box

All that we all wanted to know about Base Rate System

is explained lucidly in this piece by one of the most

knowledgeable, dynamic and respected Bankers.

New Base ratesystem Of BaNks

on oud nion h

loan for lower price for

the preferred customer or

the corporate bodies and

retail customers may have

to pay more for the same

type of loans. In the base

rate system, there will not

b uh in on h

loans.

Ho, h b

system will not be applicable for the following type of loans:

Agricultural Loans

Loans given to own employees

Loans against deposit

Export Credit

Base rate system is arrived at by taking into account, the cost

of deposits and cost of keeping aside cash to meet CLR and

SLR. It is convenient for banks to adjust the lending rates after

the changes on policy rates by the RBI.

th nw B r m

Due to these limitations, a new base rate system is being

implemented from 1st July 2010. This new framework would

have two major benets:

1. Banks would be required to revise the base rate every

quarter.

2. Banks would not be allowed to lend below the base rate

Wh hppn o h ng on?

th r Bn o Indi (rBI) h in ou uidin hih

say that customers of existing loans (based on BPLR) should

be given an option to switch to the new base rate system

without any fee.

Even for banks, maintaining two systems of PLR and base

rate would be administratively difcult so you can expect

h bn o nou

you to shift to the

base rate system.

Bu h odn

- Rathnakar Hegde



25/60

question is will the rate of interest on your loan change if you

ih?

No, it wont only the method of calculating the rate would

change. And you would get a benet immediately if the base

i id dond (b b nd o b

revised every quarter).

emp:

Lets say you have taken a oating rate home loan which is at

BPLR minus 200 basis points. (2% less than the BPLR). Right

now, the BPLR is 12%, so your loan is at 10%.

As you would have observed, if the interest rates go down,

the bank does not necessarily reduce the BPLR. So, even if

the overall interest rates go down by 0.5%, your loan would

remain at 10%. Yes, it is unfair, but thats the reality today.

When you change to the base rate system, the current rate for

your loan would remain the same. So, if the banks base rate

is say 7.5%, your loan would be marked as base rate plus

250 basis points (or, 2.5% above the base rate). So, there

would be no immediate change for you.

However and this is important what would change is how

a change in interest rate is passed on to you. Since banks

have to revise the base rate every quarter, any change in

the interest rate either downwards or upwards would be

passed on to you in a maximum of 3 months.

This is a big leap forward, considering the fact that till now;

most oating rate loan customers have only seen an upward

movement in their interest rates.

tnpn on B r sm

Another advantage of base rate system is transparency on

calculation method to arrive at the base rates. Every bank has

to declare to the public how they have calculated the base

rates. For example, SBI has calculated the base rate by taking

into account past six month deposits.

Under the new system, banks have been asked by the RBI to

ensure uniformity and transparency in calculating the base

rate, which is the oor rate for all loans.

eh bn i u i on b in ino oun

the cost of funds, possible loss incurred in complying with

the reserve requirements, administrative costs and the prot

element. The actual lending rate to the borrower will be

higher.

To the base rate will be added borrower-specic charges,

product specic operating costs, and premium on account of

credit risks and tenure.

The base rate will set the oor for interest rates on all types

of loans. There would be very few exceptions. Staff loans,

on und h dini in h, dn

against xed deposits and a few other categories will be

charged interest rates that are quite independent of the base

rate mechanism.

It is this near universal coverage coupled with the transparencyin its computation that is supposed to give the base rate system

an edge over the BPLR (Bench mark prime lending rate). Will

it deliver what the old system could not?

Knowledgeable observers have pointed that the base rate is

actually a resurrection of a system that was in vogue in the

early 1990s. The Prime Lending Rate (PLR) system was diluted

over time as many types of borrowers sought to be exempted

from its review. By 2001 it had become just a reference rate.

The rate charged by banks had very little nexus with the PLR.In fact, a large proportions of loans have till recently been

made at below PLR rates. Sub-PLR loans in India have very

i onnion ih on o h nonu h

wildly popular in the U.S. Risky lending on a massive scale to

less than credit worthy borrowers was one of the factors that

brought about the collapse of the nancial sector in the U.S.

B r h inud ho n o h ndin

that are common across all categories of borrowers. While

each bank may decide its own Base Rate, some of the criteria

h oud o ino h dinion o h B r :

1. Cost of deposits

2. Adjustment for negative carry in respect of CRR and

SLR.

3. Unallocatable overhead cost for banks such as aggregate

employee compensation relating to administrative functions

in corporate office, directors and auditors fees, legal

and premises expenses, depreciation, cost of printing

and stationery, expenses incurred on communication and

advertising, IT spending, and cost incurred towards deposit

inun

4. Prot margin.

5. Return on Net Worth



26/60

Why do we need a base / benchmark rate as a reference?

Each bank would have a different cost for the funds in simplewords, each bank would pay different rate of interest to its

depositors. For example, State Bank of India (SBI) might pay

6% interest on a 1 year FD, whereas a cooperative bank might

pay 9% for the same tenure.

Therefore, the rate at which the banks lend the money would

also be different for different banks. But how would the public

no h h no ndin o h bn i?

This is the reason why a reference rate is required. It is a

h i did bd on h u o o und o h

bank. This is the rate based on which all loans of a bank are

supposed to be priced.

Bnk Nm B r%

STATE BANK OF INDIA 7.50

HDFC 7.25

ICICI 7.50

PUNJAB NATIONAL BANK 8.00

UNION BANK OF INDIA 8.00

CENTRAL BANK OF INDIA 8.00

AXIS BANK 7.50

ALLAHABAD BANK 8.00

ANDHRA BANK 8.25

BANK OF BARODA 8.00

BANK OF INDIA 8.00

BANK OF MAHARASHTRA 8.25

CANARA BANK 8.00

CORPORATION BANK 7.75

DENA BANK 8.25

INDIAN BANK 8.00

INDIAN OVERSEAS BANK 8.25

ORIENTAL BANK OF COMMERCE 8.00

SYNDICATE BANK 8.25

UcO BaNk 8.00

VIJAYA BANK 8.25

IDBI BaNk 8.00

Base Rates are different for different banks. The following table presents the base rates announced for some of the Leading Banks.

cuion o fin r o In

Every bank calculates their Final Rate of Interest with some

points in it. Amongst all those points Base Rate plays

Vital Role. Base rate is different for Rated & Non-Rated

organizations. The calculation is as under:

Base Rate (As per Bank) 8.00%

Add: Risk Premium 0.15

Tenor Premium 0.25

Product Cost 1.75

Final Rate of Interest 10.15%

ri piu i ud on iou in o h idorganization. It represents opportunity cost of the regulatory

capital allocated against the loan offered and expected

loss due to the risk of default. It considers of Rating of Bank,

External ratings. Incase there is any difference between the

internal and external rating, the risk premium as applicable

to internal rating only will be reckoned for arriving at the nal

rate of interest.

Tenor premium represents cost of outlay of funds for a specied

tenor. Premium is also decided by the concerned banks.

Product cost represents allocable facility handling cost incurred

at branch level.

cONclUsION:

Whether Base Rate is benecial?

Base Rate is decided by Banks. Also Base Rate is subject

to change at quarterly intervals. Also, it goes hand in hand

ih din i ri piu, tno piu nd

Product Costs. Base Rate is certainly benecial to strong

companies and for those who maintain high nancial

and credit discipline who will have the natural strength to

noi h o o booin

nd obin on b o

slightly above base rate.

Mr. Rathnakar Hegde is

the former Executive

Director of Union Bank

of India.



27/60


28/60

evelopers, occupiers and investors are three

critical components of the ofce real estate

segment. While developers promote the property

and give it on lease, occupiers use and maintain

it, and investors fund it for maximum returns. It is important

that ofce property provide sustainable returns to occupiers, if

developers are to ensure maximum occupancy, and investors can

maximise returns. In this opinion piece, we seek to understand

what the occupier expects from ofce property.

The occupiers primary expectation from an ofce building isgood quality construction at a reasonable cost, and within the

targeted timeline. Construction quality not only means structural

safety against natural disasters, but also usage of innovative

construction materials and technologies. The building should

b iin o x nvionn ondiion, hquk,

oods and other catastrophes. Construction materials and

hnooi houd nu uu iin in k

and damages. Occupiers will wish to ensure that the building

facilitates smooth business operations at a maximum value for

money. If the building is still under construction, occupiers will

expect it to be completed and handed over on time to ensure

that their overall business plans are not affected.

D

Editors Box

Article deals with the expectations of an occupier and

investor from the Developer of a commercial building. Simple

language without jargons is the highlight of this writing.

- Akash Deep Jyoti

th bu i d i n hou d

hv hih d of

adaptability o nu h

it not only meets occupiers

un quin bu

also future needs. The

buin quin

n hn ov i

du o nn

reorganisation, personnel

hif, hn in buin

models, or the advent of technological innovation. Occupiers

will want to retain exibility to ensure alternative ways of utilising

building space. Adaptability in the building will ensure a long,

useful life for it, and maximise returns on initial investment.

The building should have high efciency in terms of space and

energy. Space efciency implies optimal utilisation of horizontal

and vertical areas. Energy efciency means optimal utilisation

of power, and maximum use of natural light and heat. It can be

achieved through adoption of bioclimatic architectural principles

responsive to the climate of the particular location, use of

construction materials with low embodied energy, incorporation

of efcient structural design and effective utilisation of renewable

energy sources to power the building. The individualised

climate controls should permit users to set their own, localised

temperature, ventilation rate, and air movement preferences.

The occupier expects the building to be intelligent and well-

integrated. It should have a superior building management system

with tightly integrated mechanical as well as electrical systems

to enable control of the buildings security, high-speed networks

creatINgsymBIOtIc

relatIONsHIps


creatINgsymBIOtIc

relatIONsHIps




29/60

and power operations. It should deploy energy-saving controls

uh uoi ihin-off of ih nd i-ondiion in

vacant rooms through occupancy sensors. The security of the

building should be ensured through a card-access system and

sensor. The building should have a well-distributed, obu, nd

exible IT infrastructure, which allows technological access in

virtually the entire space.

th din o h buidin houd nu ood ih,

ventilation and natural environment. The building should

either provide a view of nature to occupants or an inner

courtyard with a view to nature. This would definitely

improve the employees concentration, efficiency and

health. The acoustics of the building must be designed

and integrated with the other architectural aspects and

furnishings of the office.


or the rst time this year there was an

Exclusive Indian Real Estate Pavilion

by CREDAI Bengal in Banga Mela 2010

(MABA) from July 2nd - 4th, 2010 at

Sheraton Music City Hotel, Nashville, Tennessee, USA

and Banga Sammelan 2010 (NABC) from July 9th - 11th,

he Programme, Events and Fellowship

coi o creDaI Bn hd

onid n ini ion on

Implication of Service

Tax on Real Estate Industry by Ernst &

Young on Thursday, 19th August 2010

Bn cub o creDaI Bn

members.

The speakers from Ernst & Young

oo:

Mr. Bhaskar Thakkar: Associate

Dio

Mr. Amit Bhagat: Senior Manager

th diuion bou h iou

issues on Service Tax imposed by

f

t

MABA And nABC 2010(ProPerty exhiBition in U.S.A)

rePort on iMPliCAtion of ServiCe tAx onreAl eStAte indUStry

e

ve

Nt

2010 at Atlantic City, Convention Centre U.S.

CREDAI Bengal pavilion made a mark at MABA and NABC

2010 since this was also the rst time proper stalls weremade for real estate pavilion which was standing out in

h xhibiion o h udioiu

the Central Government in the current years union

budget.

th ion hd ndn nd h inion

between Ernst & Young and the members was highly

enlightening.

CredAi BengAl


finally, the building should have high sustainability levels in

terms of environmental friendliness and ecological harmony.

Most ongoing ofce building projects in India now target

green building certication in this regard. The main objectives

of sustainable design are to avoid resource depletion of

energy, water, and materials; prevent adverse environmental

impact; and create an environment that facilitates life that is

comfortable, safe, and productive.

In other words, developers of ofce buildings need to be

receptive to occupiers needs, and strive to create buildings

that cater to the occupiers requirements. The extent to which

developers are receptive to occupiers interests, and maximise

returns for investors will be key determinants of demand and

pricing of ofce buildings.

Mr. Akash Deep Jyoti, a realty expert with 15 years

experience, is Head - Ratings, CRISIL Ltd


30/60

indings from two recent government surveys offerglimpses into the overall urban housing scenarioin the nation, with special reference to slums.However, far more detailed city specic data isrequired if private real estate developers are to

prepare strategies to partner with local governments or non-

prot organizations to prepare projects that build homes forlower income groups. Mukta Naik throws up some ideas onif and whether this is an opportunity for developers.

What with the Adarsh Society and the housing nance scam,housing has got more than its share of print column spacethis past fortnight. What that tells us, besides the politics andscandal, is that housing gets precious little media exposureotherwise compared to the huge part housing stocks andprices play in the evaluation of economic conditions in Europeand the United States. In fact, using housing as a barometerto gauge economic growth and predict economic trends is asure sign of a mature economy.

In India, of course, the scenario is vastly different. Politically,we are not a federal system; yet states can choose to adopt,adapt and sometime ignore the policy decisions of the centralgovernment. The housing scenario is therefore very differentfrom state to state, depending on the pressure on urbancentres, the stability of the government and the buying powerof the population.

I h h i n u ho o houin in Indiurban centres (24.7 million, by government estimates) andthat the majority of this shortage lies in the economicallyweaker and low-income group sections. It is also clear that it

is impossible to address the problem of urban housing withoutmore city-specic data and a detailed assessments of needs,not only for the dwelling units per se, but about the conditionsrequired to live a decent lifeamenities like water, power,sanitation, transport, access, health facilities, education andso on and so forth. Two recent government studies shed aconsiderable amount of light in this direction.

NssO ndng

The National Sample Survey Ofce (NSSO) has recentlyreleased Report no. 535 titled Housing Condition and Amenities in India, 2008-2009 based on the householdsurveys conducted across the nation in its 65th round of data

collection. Some of the ndings pertaining to Indias urbanareas are notable in the context of housing. Particularly, theseresults give considerable insight into the quality of life offeredby Indias urban centres to the citizens.

FHOw DO we

strategIze tOprOvIDe HOmes

fOr all

Improving Urban Housing

Cover Story

fnn ndo

63% of urban householdslive on owned premisesand 30% of urbanhouhod i in hiddwellings. In fact, 5% ofubn houhod idin their employerspremises!

92% of urban householdslive in pucca structures,6% live in semi-puccastructures and 2% livein katcha structures.

Average monthly rent of rented dwellings in urban areasis Rs 1149 as opposed to Rs 590 in rural areas.

The percentage of home ownership gives an idea of thetremendous pent-up demand in urban markets. If detaileddata regarding the distribution of this data across specicii ib, i oud nb h ion o did

market studies to facilitate the housing industry.

While the construction of homes appears to be overall goodin the survey, this belies the large populations that live inslums that are largely impermanent structures highly prone tocollapse in disasters like a re, ood or earthquake. The dataseems out of sync with reality.

Hh-d ndo

Urban households have a per capita oor area of 9.45 sq m and Nearly 13% of urban households had a per capita oor

area of over 20 sq m. 6% of urban households have katcha drainage, 15% have

no din! 21% of urban households have no garbage disposal facility. 6% of urban households have no direct opening to a road 75% of urban households do not have access to drinking

water within their premises

- Mukta Naik



31/60

While the per capita availability of space is generous, thetruth is that the disparity between high income and low-incomehouseholds is increasing year on year. The conditions ofoodin in u nd qu n oninu oimpact the health of the citys poorest residents and its baselevel workforce.

th ondiion o din nd b oion nddrastic investments into the overall physical infrastructure of

Indias urban areas. While these have been facilitated bygovernment schemes like the Jawaharlal Nehru NationalUrban Renewal Mission (JNNURM), these upgrades and thelong-term operations and maintenance (O&M) of the citysinfrastructure require cities to invite private sector investment,participation and consequent benets.

conuon-d ndo

4% of urban households took up some form of homeimprovement/construction during the 365 days precedingthe survey.

Average cost per completed activity was Rs 58,000 inurban areas.

14% of these constructions related to a new building 25% of these were nanced from non-institutional entities,

while 15% were nanced from institutional agencies

Boh h hih o o onuion, onidin o othese were repair or improvement jobs, as well as the highpercentage of dependence on informal sources of credit arealarming. They point to the unorganised situation of creditand construction in urban India.

fndng o h um omm

Recognising that the rst hurdle in truly addressing theCommittee of Slum Statistics/Census has been set up by theMinistry of Housing and Urban Poverty Alleviation.

The report sums up the data collected by the Registrar Generalo Indi (rgI) ihin h 2001 cnu, NssO nd UN ndthen goes on to make its own estimates.

Slum population, as per the RGI, constitutes 5.1 % of thecountrys total population and 18.5% of the urban populationof India. In the 1743 cities studies, 52.4 million people livingin 10.2 million households lived in slums. However, the UNpegs Indias slum population to be about 158.42 millionpeople. NSSO reported yet another gure. The discrepancyin data is due to different denitions of slums used by all three

organisations. Some of the fallouts of the lack of data hasbeen disproportionate allocation of funds in JNNURMs sub-missions. Clearly there was a need for detailed and coherentdata using the same denition across the country and theabove-named committee was set up.

However, there is value in the fact that actual survey-based slumdata was collected in the 2001 Census. Using appropriateii hniqu nd bd on cnu nd NssOdata, the committee has come up with an estimate of slumpopulations and the projections for years ahead.

Unsurprisingly, the states of Maharashtra and Uttar Pradesh

are estimated to have the largest slum populations (18,151,071and 10,878,336 respectively) for the year 2011. Tamil Nadu(8,644,892), West Bengal (8,546,755), Andhra Pradesh(8,188,022) and Madhya Pradesh (6,393,040) follow suit.Large states like Bihar and Rajasthan with lower urbanization

rates show relatively modest slum populations.

Clearly, the factors that determine the growth of slums arevaried and complex. The next step would be to arrive at city-specic estimates that would help the planners as well as privatedevelopers interested in partnering with local governments toplan their strategies.

i h n oppoun o dop h?

At present, private sector real estate developers are focusing onthe affordable housing segment, which largely addressed theneeds of the middle class in Indian cities. The determinants ofthis type of housing is the cost of land, construction technology,materials used, density and house size and design. Withconsumers becoming savvier, developers are continuouslychallenged to be able to provide decent, aesthetically pleasinghomes at affordable prices.

However, developers are yet to en-masse conquer the lastbastion for urban housinghousing for the urban poor. Thismeans that, in an ideal situation, developers should be able topartner with the local government or non-prot organizations

in specic cities to prepare projects that provide homes thatare viable alternatives to slum dwellers.

Is this a possibility? In the current frame of thinking, probablynot. But with the pressure of meeting (or at least appearing tomeet) the Millenium Development Goals (MDGs) set down bythe UN and to which India is also a signatory, the governmentis waking up the fact that addressing the needs of the urbanpoor is a vital necessity if we are to avoid political, economicand diplomatic disaster!



32/60

reDaI ti Ndu hd csr Iniii

joined hands with Habitat for Humanity an

NGO concentrating on providing decent

and affordable shelter to the needy and

had offered to sponsor 300 such units at 5 lakhs eachby inviting its Members to come forward and sponsor at

least 5 units each.

fooin hi iniii nd hin bd hi

opportunity with a spirit of compassion it only seemed

betting that on the occasion of World Habitat Day on

October 4th ( as recognized as by the United Nations as

a day of reection on the basic right to adequate shelter

for all and of the worlds collective responsibility for the

uu o h od hbi ), hih d h binnin

of a week to advocate and educate the importance andh nd o odb houin ih dqu niion

o h inid, h cdi tN do ohin

noteworthy to promote the cause with the theme being

sh o

Habitat for Humanity called for a unique Partnership with

cdi tN mb in di o dd h coi

Responsibility of key Members/Stakeholders of the

Industry in creating an equitable habitat where simple,

safe and affordable shelter is made possible for approx.

315 million Indians who lack the means to a decenthome. In response to this appeal to MDs and CEOs of

our Member Organizations to participate in this drive of

a day of grass roots house building activity by working

cCredAi tAMil nAdU & hABitAt for hUMAnity

c

s

r

CredAi tAMil nAdU

To this end, the Rajiv Awas Yojana (RAY) is being rolled out andseveral other inititiaves are in the ofng. However, serious though thegovernment may be addressing this monumental task, the truth is thatthe solutions lie in empowering local governments in several ways.

fi, o onn nd o h h und o in in uhprojects. Then, they must be willing to partner with privatesector players by putting on the table the most expensiveresources, the land. Third, they must also be willing to provide

inni i duion o x nd dui nd -approvals to these priority projects. Last, and most difcult,they must be in the frame of mind that the developer is hereto do business and not as a philanthropic gesture. Therefore,the business model must also permit the developer to makeprotsin this context low prots per unit but large-scaleprojects should work.

sg o dop: Pon o pond

There are several areas that a developer organization needs tobe sure about before joining the bandwagon. Here are someindicative questions that could help think through whether thisopportunity is right for your organization.

Is this an opportunity that suits the way your organizationunion?

Can you restructure your organizations DNA to work on o in nd hih ou ?

Do you have access to the right construction and projectnn hnooi?

Are you willing to invest in the R&D required to customizethe technology for Indian conditions and more importantlyproject-specic factors?

Are you willing to invest in planning and design innovationsh uin d?

Does your organization have the human resources requiredto partner and work with government and NGOs?

Are you willing to risk a new business model?

Happy pondering!

Mukta Naik is an architect and urban planner. She heads the

planning research and advisory practice at the Institute for

Competitiveness. Her interests centre on housing, equitable

development and policy.


alongside poor families and thus giving hope and lending

the sense of solidarity to the cause, our Members did just

that. By moving out of their comfort zone for a worthy cause

TN Members beginning with the President, Secretary and

vi pidn Nion nd oh ec mb din hway, literally donned the hard hats and worked alongside

ii buidin ho ound thiuu iin h uh

needed hope to around 300 families in that region.

The satisfaction and gratitude felt and expressed by the

villagers and inhabitants of Thiruvallur District provided

Credai TN Members with the feeling gratication that

comes out of giving back to society by way of acting

on a tangible social responsibility by demonstrating in

ion nd i i oi oin o h h

requirements of the less priviledged in the State especiallywhen juxtaposed with the booming Real Estate Industry.


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34/60


35/60


36/60

ith a stabilizing economy and upward

on in dnd, h conuion

Industry is seeing rapid and phenomenal

growth across the country. The challenge

today for the Industry is shortage of trained labour with good

skill. The challenge of achieving quality work in specied timeline

has to be addressed by the Industry on a war footing.

NSDC is a rst of its kind Public Private Partnership in India

that facilitates skill development. A large part of its efforts are

directed at skill development programmes in the unorganized

sector. NSDC acts as a catalyst in skill development by

providing viability gap funding to enterprises, companies and

organizations that provide skill training. It will also develop

appropriate models to enhance, support and coordinate

private sector initiatives.

Its the privilege of CREDAI that our Chairman Mr. Kumar

Gera, is one of the board members of NSDC. Ever since its

inception, Sri Kumar Gera has been keen that Bangalore

should play a vital role in taking forward the NSDC initiative.

And as such CREDAI Karnataka has taken the step forward

in dn o h NsDc iniii nd h bd on

the task of undertaking skill development to workers connected

with construction Industry.

The inspiration for the scheme of things is from CREDAIPune spearheaded by Mr. Ranjit Naiknavare and persistent

persuasion by our Chairman Mr. Kumar Gera.

Potentially, the target group for skill development comprises all

ho in h bou o, inudin ho nin h bou

market for the rst time (12.8 million annually), those employed

in the organized sector (26.0 million) and those working in the

unorganized sector (433 million) in 2004-05. The current capacity

of the skill development programs is 3.1 million. India has set a

target of providing skill to 500 million people by 2022.

en bo h oion o NsDc, creDaI kn hd

planned similar activity when Mr.Balakrishna Hegde was

the President and to this end an approach was made to the

gonn o kn o h on o quid nd

to house the Training Centre. Again I should place on record

my appreciation to Mr. Balakrishna Hegde for initiating the

process and also to Mr. Raj Menda and Mr. Sushil Mantri

for taking the effort forward in addressing this very essential

requirement of Construction Industry.

Given the nature of Industry - mostly unorganized with pooraffordability of the workers to pay for the training (foregoing

their daily wages) most of the development needs to be

imparted at convenient time and location. Similar efforts

wNsDc- BaNgalOre INItIatIve

are on by a few training

iniuion o on

period of time (NICMAR,

INSTRUCT etc.,) who have

n o o dn

inin in

room like situation. Since

workers skill development

nd i in, i i

imperative the training

goes to their door steps.

ao o h uu

on in o in

achieving the desired results, the economy of operation is vital.

Hence at the start of the programme, large sites with sizable

workforce involved, will be addressed. Smaller sites and few

workers needing training need to be addressed immediately

on getting the condence of start. Model of small groups will

be worked out once experience input is analyzed

Some of the related elds of training to be imparted to start

ih :

1. Masonry (all related work), Plastering and Tiling.

2. Plumbing and Sanitation.

3. Carpentry

4. Site keeping and supervision/management

5. Hands on experience to fresh graduates / diploma holders

prior to employment

The entire training programme will encompass Safety and

basic communication skills.

Since this training can be of two pronged, the just out

Engineering / Diploma graduates from Civil and connected

discipline will also be trained hands on at work situation

along with unskilled workers to take up next level of activity

which is not in the framework of NSDC but an independent

initiative to be taken up by CREDAI Karnataka. Two goals can

b hid houh hi

1- impong h wokng ondon o ng bo

ong wh nhnd n

2- tnng nd ndng h ngn o podu

mpomn

To get better result and sustainable programme, pilot projects

at few large construction sites are planned. The training needs

to be 100% at site, since the ofce interface of skilled workersis a corollary. To create stimulating situations, mobile models

i b d on h in o mobi do od on

wheels. This vehicle will be taken to different sites depending

- Suresh Hari



37/60

on need and situation. The training will be date specic and

cannot run for months to start with.

Inin ih oh ii oiion i i o h

successful implementation of the programme. BAI Bangalore

center at present has specic programmes to train fresh

graduates and certicates are issued under the authority of

VTU (Visweswaraya Technological University, the authority

who controls all Engineering colleges in Karnataka). These

graduates, once trained are an asset to any construction rm

who look for effective engineers who not only takes care of

technical aspects, but also the administrative part. Partnership

for the execution of project with these similar Associations will

enable greater success and reach.

We will look at advanced training once the pilot project takes

shape. CREDAI Karnataka needs to procure suitable land for

putting up such a center for class room benet and training

different disciplines of labor force.

Even though NSDC contemplates basic Skill development,

we will embark on advanced programmes once the needed

experience is achieved.

1. Grade III as Trainee Worker :- 3 months course

2. Grade II as Junior skilled worker : 6 months course

3. Grade I as Senior skilled worker: short term advance

course with greater focus for individuals already qualied or

one who has gone through skill development.

Employers of workers will be made to play a vital part in

this programme. They need to relieve workers to enable skill

development and also provide them with the wages lost. Site

support for conducting the course is a must.

Partnership with other organizations like state governments,

especially Cess Board will make the programme very effective.

th oion uiiion i on o h nin iu d

by the Board. An effective interface with them will enable part

funding of the programmes. Karnataka is one of the early States

to have initiated the Labour Cess charges and huge corpus is

available. Though Tackling Government Funding has its own

limitation, a prudent mix of funds and involvement from them

will enable more authenticity to the Programmes.

Initially CREDAI Karnataka will allot budget for the programme

as CSR initiative, but huge outow will be required once the

programme takes shape. Detailed costing will be worked

out once the various parameters are put in place. When

CREDAI Karnataka launches the full edged programmewith established center for training, etc., the rough Budgetary

Estimate of around Rs.15 crores will be tapped through

NSDC.

The programmes will be implemented through identied

agencies who have specialized teams handling similar efforts.

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