100 Smart City Project And AMRUT (Urban Transformation Of 500 Cities) Is A Promising Initiative

"We welcome the decision of the Union Cabinet which cleared the 100 Smart City Project and Atal Mission for Rejuvenation and Urban Transformation of 500 cities (AMRUT) with combined outlay of approx. Rs 1 lakh crore. It will give urban renewal a new lease of life. While we wait for more details to emerge, the willingness shown by countries like Japan, Singapore, Spain, the USA etc. has put a lot of onus on both the Central and State Governments to work on details related to selection of cities, execution, funding besides State and Central assistance, role of private sectors and more importantly timelines to finish the projects. With increasing urbanization, it is extremely important for the Government to work on strengthening existing infrastructure in these cities and make them self-sustainable and environmental friendly with smart mobility so that urbanization and migration doesn’t put pressure on only a few cities and each develop into independent growth and employment generating centres and become better places to live."

Mohit Goel | CEO, Omaxe Limited

When the Earth Shook.. What Delhi must do.

It was a normal Saturday (April 25, 2015) when millions across India and Nepal were either in their homes relaxing or in their offices. Around 11:40AM the earth shook..and shook for a while until the realisation sunk in that it was an earthquake; and people across the impacted regions ran for open space. Some ran out successfully while others lay under collapsed roofs. while no casualty was reported in Delhi, Nepal where the epicentre lay was severely affected and so were Bihar and Uttar Pradesh. Coming back, another 30-35 min later, the earthquake reoccurred and it was then that images began flowing in from Nepal about the mass destruction that has happened. Cracked roads, fallen roofs, screaming and crying people, destructed monuments and temples etc. The sight was to say the least scary. the capital city of Kathmandu lay flat... the earthquake measured 7.9 on the Richter scale with epicentre 68KM east of Pokhara. The city continued to witness several earthquakes in the next few days. the iconic Dharahara tower  collapsed, so did Trailokya Mohan Narayan Temple, Kathmandu; Vatsala Shikhara Temple, Bhaktapur; Maju Deval, Katmandu etc.
72 hours hence, over 4000 have died, 8000 injured. Nepal PM has warned that the toll could reach 10000 with the UN already pegging the total number of affected people at over 8 million. 

Within  hours, India's Prime Minister Narendra Modi sprung into action and dispatched relief and rescue workers. The operations have only strengthened over the days with more international aid flowing in. Thousands of Indians have been evacuated from Nepal. 
Back home, the toll has risen to over 70 with fresh tremors occurring as late as last evening (April 27, 2015) in parts of Bihar and West Bengal. Maximum casualty happened in Bihar.

Amidst all this, the question that arises is - how safe is Delhi? Delhi lies in Seismic IV zone - highly prone to earthquake. the large scale unorganised and unregulated colonies that have mushroomed in the city over the last few decades could cause major destruction to life and property if an earthquake of that magnitude occurred?

It is serious cause of concern for us in Delhi NCR to take corrective steps. While this has made even homebuyers cautious, in ensuring earthquake resistant structures are in place and other precautionary measures have been taken care of. What needs to be curbed is the unorganised construction that's happening across the capital. Stricter compliance by authorities will instil confidence in the people. Besides, old housing societies must be encouraged for redevelopment. The authorities, developers and buyers have to cohesively work towards ensuring a safe Delhi. However, to say that real estate will be impacted is an overstatement. Home is a necessity and its important that all stakeholders must apply and comply to keep the city and surrounding safe.

Mohit Goel | CEO, Omaxe Limited

Escrow Amount Should Be Fixed On City Or Project Basis | Real Estate Regulation Bill

While we welcome the real estate bill cleared by the Union Cabinet, certain provisions that the sector had asked for amendment remains unattended.  We would have preferred escrow limit to be fixed on city basis (metro/tier II) or project basis (luxury/affordable); instead of a blanket 50%. Also, bringing ongoing projects under its ambit at this moment would further delay delivery of a vast number of projects (at various stages of construction) in the country.

We also believe developers should be allowed to change design and structure post approval of 50% of consumers since a lot of difficulty arise when a developer begins construction. Lastly, and most importantly, the bill doesn’t fix accountable equally on all stakeholders. While builders face the brunt for project delay; accountability has not been fixed for delays due to regulatory approvals and customers default on payments etc.

- Mr. Mohit Goel, CEO, Omaxe Ltd.

 

Omaxe CEO Mohit Goel on CNBC Awaaz

Omaxe CEO Mohit Goel discusses impact of NGT Ban, Real Estate Bill etc.

 

Omaxe CEO Mohit Goel on Zee Business discussing Real Estate Bill

 Omaxe CEO Mohit Goel discusses in detail the Budget proposals and what it entails

 for the real estate sector on CNBC Awaaz.

 

Budget 2015 | Omaxe CEO Mohit Goel on CNBC Awaaz, Bloomberg TV and NDTV Prime

Omaxe CEO Mohit Goel discusses in detail the Budget proposals and what it entails for the real estate sector on CNBC Awaaz.

In a panel discussion on Bloomberg TV, Omaxe CEO Mohit Goel talks about the takeaways for the real estate sector from Budget 2015.

Omaxe CEO Mohit Goel discussing Budget proposals on NDTV Prime.

Quote of Mr Mohit Goel, CEO, Omaxe Ltd. on Budget 2015

According to Mr Mohit Goel, CEO, Omaxe Ltd., “ The Budget 2015 has put a lot of emphasis on social security, infrastructure and skill development. However, the real estate sector continues to be deprived of any real measures to boost the sector and kick-start housing demand. No benefits on personal income tax front were given to encourage savings. However, the government has found other ways to spur savings, which might not necessarily result in any captive investment. The increase in service tax is another negative for real estate. The decrease in corporate tax may not result in investment. The Government’s vision on Housing for all by 2022 and Smart Cities needs more concrete direction.  I believe that the measures announced today in the Budget will see a far reaching impact in the years ahead, but not immediately.”

25bps Cut In Repo Rate Welcome But More Could Have Been Done

The Reserve Bank of India surprised the market with sudden announcement of 25bps cut in repo rate on January 15, 2015; the first in New Year and a reduction after a very long time. RBI announced a 25 bps cut in repo rate, which means banks can borrow at a lesser rate from RBI at 7.5% now against 8%. A couple of factors weighed primarily on RBI’s mind – fall in inflation and a sharp reduction in global crude oil prices. Crude oil prices have fallen to below $50/barrel. Unprecedented! 

The November 2014 IIP figures released on January 12, 2015, too, showed encouraging signs with growth at 3.8% as against (-)4.2% in October 2014. The combined effect of these factors prompted RBI to make this decisive cut. The cut also signaled RBI’s move in stance from Inflation to Growth. From here on, rate cuts can be expected to happen at regular interval.

However, even at this juncture, the quantum of cut could have been more. To kick start demand and investment, it is imperative that we move aggressively on the rate front. Noted economist and Columbia University's professor of economic and law Mr. Jagdish Bhagwati rightly said: “I would do what Raghu (RBI Governor) did—lower interest rates. Because inflation is less, oil price has fallen and so on. It's from the demand side that we are having a problem.”

The Real Estate continues to witness absence of homebuyers. High interest rate is a primary reason besides other factors like poor income growth, low confidence etc. These fears are beginning to be dispelled with the Government taking things in its stride and working towards growth, development and empowerment. The Government and RBI must support private sector so that the participation and more importantly channelized participation can bring about a more decisive and inclusive growth.

RBI’s direction to banks to review lending rate every quarter is yet another important move to assess the movement in interest rate. Banks must pass on the rate cut benefits to consumers and respond with alacrity. 

Going forward, another round of rate cut is expected before the Budget 2015-16. The Budget is expected to bring about a slew of reform measures and that complemented with considerate lending rates can stroke demand in every sector – primarily rate sensitive ones like consumer goods, auto, home etc. 

This could possibly also be the correct time for RBI to usher in other measures like allowing banks to lend more to real estate, easy funding norms etc so that the real estate sector plays the role of a catalyst in driving the overall economy.

Mohit Goel | CEO, Omaxe Limited