Pre-election sops give real estate a leg-up
The government's pre-election bonanza for residential real estate seems to have worked well, resulting in over 10 percent increase in sales in the March quarter besides an upswing in new launches.
Conventionally, the period between the announcements of election dates till the declaration of final results saw the real estate market move with caution as buyers adopted a wait-and-watch policy in anticipation that the newly elected government may offer some sops.
"Interestingly, 2019 is proving to be different. We estimate more than 10 percent increase in sales across the top seven cities in the first quarter of 2019, while new launches are estimated to see over 20 percent rise".
This is largely due to the triple benefits offered by the government in less than just two months of 2019. The government doled out sops in the budget for developers undertaking affordable housing projects as well as measures to boost second home buys. It also reduced the GST rates on both affordable and premium housing, which was further propelled by a decline in home loan rates post RBI's repo rate cut.
Niranjan Hiranandani, co-founder, and MD of Hiranandani Group and President of industry association Naredco said sales had picked up in the last two months following the measures undertaken by the government. "We are seeing that buyer interest is back in the market. Especially the reduction in GST from 12 percent (with input tax credit) to five percent (without ITC) for premium homes is attracting a lot of people", he said.
Puri pointed out that affordable housing was keeping the momentum going with both new supply and sales going up. "Even the leading developers- who were primarily into luxury segment- have launched projects within Rs 80 lakh budget. These projects are seeing good sales traction".
Affordable housing projects have been the biggest beneficiary of sops as not only the GST has been slashed from 8 percent to just one percent but builders also get full tax exemption on profits from projects registered till March 2020. "These sops have pushed sales in affordable housing even further", Puri said.
Fear of external interference in elections! BJP and Congress have got millions of foreign donations
As the Lok Sabha election approaches, the fear has reinforced that foreign interference can take place in Indian elections. Changes in the FCRA Act have made this apprehension stronger. This fear cannot be called in vain because both the BJP and the Congress have got foreign donations of crores of rupees to the big political parties.
The Association for Democratic Reforms (ADR) has received 34 such cases of foreign donations to political parties. Between 2003-04 and 2011-12, 19 cases of BJP and 15 have come in front of Congress. All these funds could be possible due to this because the government had made changes to FCRA 2010 and 1976. Foreign companies such as Indian subsidiary of Vedanta, Dao Chemicals, in this, have received both political parties from Rs 1 lakh to Rs 14.5 crore. In these years, BJP got Rs 19.4 crore from a foreign source and Rs 9.83 crore from Congress.
Why is it necessary to stop such funding
Political parties are considered to be the protector of democracy. They fight elections, form government and make laws. Therefore, the donations given to them are of great significance in terms of the operation of our democracy and the government. The Law Commission had given three major reasons for its reforms in the 2015 election on election reforms, that is why it is necessary to improve the funding system of political parties and bring transparency. The first thing is that money power hinders the system of equality in political parties and reduces the purity of political parties. Rich Candidates and political parties get more chance to win the elections.
Secondly, black money, bribery and transaction corruption have already dominated politics, which helps the candidates run their election campaign. The commission had laid the foundation of this quote by the Supreme Court to strengthen its point of view, "It seems that the source of some electoral fund is without accountable criminal wealth, in return for which they get protection. Similarly, there is black money in business groups, who hope to get higher returns in lieu of commission given on this investment, bribe or contracts. '
Third, uncontrolled or under-controlled electoral funding promotes two types of things. A-industry \ Private institutions use the funds to make sure the rules and regulations are softened. The money used for the funding of By-elections ultimately helps in achieving "favorable policies".
However, it must be kept in mind that it is not so easy to overturn the change that has been brought in the rules. The previous NDA government had tried to completely reverse the order of the Supreme Court in 2002, in this order the Supreme Court had said that all the candidates were given details of their educational and property related details as well as criminal cases filed in the affidavit of the election. Information will also be given. The NDA government first tried to stop it from the ordinance and then brought a bill for it in Lok Sabha, but when it came to knowing to the Supreme Court, it stopped the amendment as unconstitutional.
Ailing Jet Airways to fly 40 more aircraft by April end
Jet Airways' management on Tuesday informed the Civil Aviation Ministry that it would fly 40 more aircraft by April end and also assured that it would not ground any more aircraft, Civil Aviation Secretary Pradeep Singh Kharola said.
"By Monday or Tuesday, Jet and the lessors should come into an agreement on getting back the grounded planes. By the end of April, Jet would be able to fly 40 more aircraft. As on today, Jet is flying 35 aircraft," Kharola said after meeting with the Jet management including representatives of the State Bank of India (SBI).
The meeting took place post the management takeover by the SBI and its subsequent Rs 1,500 crore capital infusion for emergency funding on working capital needs.
A total of 75 aircraft is envisaged by April end which is around 80 percent of the Jet's total aircraft previously, he said.
Elaborating on the operational part, Kharola said the financial part of the problem at the airline are being handled by the lenders led by the SBI and the Ministry is only looking at the passenger safety aspects so that they don't have to face any hardship.
He also said the government is also keeping a close watch on the airfares and the Directorate General of Civil Aviation has suggested to the airlines not to resort to predatory pricing.
On Monday, Jet Airways promoter Naresh Goyal stepped down and the SBI-led management took over the daily operations and cash flow.
With Goyal's exit and the SBI leading a consortium of banks to take charge of the interim committee, Rs 1,500 crore was infused as emergency funding by the lenders to look at immediate issues.
Jet Airways has been struggling with cash flows for the past six months because of rising fuel costs and intense competition. It has even delayed payment to lessors, airport operators and oil marketing companies besides a part of its workforce to keep the company running.
As many as 40 of its aircraft were grounded due to inability to pay rentals. Its pilots and certain sections of the employees have been without pay for some months, leading the pilots to issue an ultimatum on salary payment to the erstwhile management.
The airline owes Rs 8,000 crore to the SBI-led lender's consortium.
SBI expects Jet to find a new financial investor by the first quarter of next fiscal.
Indian tax officials to auction Nirav Modi's art collection today, aims to fetch up to Rs 50 crore
Indian tax officials will auction 68 modern Indian art paintings, including works by Raja Ravi Varma and VS Gaitonde, that were once part of fugitive jeweler Nirav Modi's collection and have been seized by the government.
This would be the first of its kind of auction in a country where tax authorities have usually auctioned property, gold and luxury items, but not art.
The book value of 68 paintings is Rs 57.72 crore and the three-day auction of rare oil paintings is slated to start from today in Mumbai. The tax authorities are expected to raise between Rs 30 crores to Rs 50 crores ($4.4 million-$7.3 million).
Last week, the special court in Mumbai allowed the Income Tax (IT) department to auction the artworks which were attached by the Enforcement Directorate (ED) as part of its probe to recover dues of Rs 95.91 crore from Nirav Modi, the prime accused in the Rs 13,000-crore PNB scam.
The agency, which has seized 173 paintings owned by Nirav Modi and his shell firm Camelot Enterprises, has appointed professional auction house Saffronart for this auction.
On Monday, the fugitive diamantaire's firm moved the Bombay High Court challenging the decision of a special court to allow the auction of the artworks belonging to the jeweler. They have also sent a legal notice to the revenue department against the three-day auction calling it unlawful.
Jet Airways founder Naresh Goyal steps down, banks to infuse Rs 1,500 crore to rescue airline
Jet Airways founder Naresh Goyal and his wife Anita Goyal have stepped down from the board of Jet Airways after a board meeting was held on Monday.
The airline's CEO Vinay Dube will continue in his position and has been tasked with guiding the company out of the crisis situation.
After the board meeting, Jet Airways informed stock exchanges that promoters of the airline, Naresh Goyal and Anita Goyal, and one nominee of Etihad Airways PJSC have stepped down from the board.
"Resignation by Naresh Goyal, Anita Goyal, and Kevin Knight, as
directors of the company, and induction of two nominee directors of lenders. Naresh Goyal will also cease to be the chairman of the Company," the statement said.
The airline will also receive immediate funding of up to Rs 1,500 crore by lenders.
"Immediate funding support of up to Rs 1,500 crore by lenders by way of issue of appropriate debt instrument against the security of its assets which will restore normalcy to Company's level of operations," it said.
Soon after Goyal stepped down from the airline's board, Jet's stocks jumped over 15 percent. This is the biggest gain for the airline since January 14.
The airline's stocks were trading at over Rs 261/share from approximately Rs 233/share before the announcement.
Etihad's stakes in the company will be halved from 24 percent to 12 percent while Goyal's stake will be reduced to 25.5 percent from the existing 51 percent.
The decision paves the way for lenders, led by the State Bank of India (SBI), to invoke some of Goyal's shareholding and rescue the airline on an immediate basis.
It is likely that the lenders will take over more than 50 percent of the airline's stake and convert its debt into shares.
This marks the road to recovery for the airline but experts indicated that there is a long way to go before the airline can recuperate from its losses.
Experts also made it clear that the airline needs a swift capital infusion to stay afloat.
At present, Jet Airways is operating with just 41 planes out of its fleet of 119 planes after failing to repay rentals.
The airline is also on the verge of losing hundreds of pilots who are on the lookout for new opportunities after Jet failed to pay their salaries since December.