Saturday, June 6, 2020

Grandma's Advice & Real Estate!!













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“When you put a lion in the cage, even a mouse dares to take a bite at it”...

Well, it’s indeed isn’t lock-down philosophy as by now the lock-down is just in rule books of some govt agency, is the scene  on the roads. And another sign of lock-down getting over is the tongues which started wagging all around & what better than real estate to hit as this industry has become a punching bag for many so called big names in corporate as well social & political fields & the media loves such bashing for their TRP & common man too loves it because like the remix of some popular Bollywood song, the words are different but tune is same! Well, this happens only when you are run out of new creative ideas & no wonder looking at all the names which has been singing the tune of advising to real estate, most of them have run out of ideas long back!

First Mr Gadkari (though I respect him personally), then Mr Tata, then Mr Parekh, followed by none other than Union Minister of Commerce Mr P Goyal & latest entrant in the orchestra is Mr Kotak! And if you have wise enough (well there are few yet in real estate) then you will observe every time when some big political name sings first line of this "Save Real Estate" song, then immediately few big names from corporate or social or finance fields joins the chorus, and these names are always from Mumbai or Delhi! Rather keeping due respect for every such name, that’s how you become big in this country is what sometime I feel along with your intelligence! Except one Mr Bajaj or some Narayn Murthy, no other big name has guts to sing a different tune than the govt puppet singing is the irony of this country actually! And then media also likes it, as on one side media wants revenue from real estate (read as builders) and when its strengthening real estate industry, it’s the media which damages it most by promoting such fool’s advice which has no value nor any real feelings! And I am not saying to any media don’t promote or don’t print wrong doings of real estate people but this is not wrong doing its just pelting stones at caged lion! As none of these names has any sympathy for real estate industry as whole i.e. neither with the builders nor with the home buyers or they would have come with some concrete proposal for finding solution in these hard business times than giving age old Grandma’s solution of reduce the rates! 

What I meant is like whenever its cold or cough or headache or stomach pain, the old lady in home which mostly is our loving grandma used to give a peculiar medicine from her “Batuwa” i.e. pouch. For ages that medicine is same, powder of some herbs & you have to drink it with milk & that’s all. Same way all these so called successful business corporate gurus’ give same advice; reduce the rates in difficult times for real estate, reduce flat rates, work on less profits & sometimes they coat the words with philosophical touch like, “drive not looking in rear mirror but drive looking front on road” types! Wonderful & appreciated but guys the main difference between Grandma & you all is, her medicine may be same & age old but it’s her love towards us which was genuine & you all are giving us (builders) dosages looking at your own products & prospect! For e.g. Mr Parekh & Mr Kotak are finance guys & giving people loan & make money on the interest which the people pays, is their core business! And Mr Tata is in many businesses & knows our Indian mentality that for most people a home is first priority & is a costliest product not because of the builders but because of every segment associated with it including govt. And  if all the money of a family gets burnt in buying a home then who will buy many other commodities like a dream car, even if it’s available in Rs 1 lakh

Well, my culture is not to hit other people on their weaknesses or insult them by advicing in such a way that the medicine will give more pain than the wound i.e. “jakhm pe namak chidakna”; so I won’t comment or say things about all these people’s businesses or the way do it but then respect is a two way road, isn’t it? I have nothing to say about any political names & what they say about not just real estate but any aspect of life as a profession where while election you speak all ill & throw dirt on your opposition & post election you make the same opposition allies; lesser we speak about such profession & men in it! But when the so called professional, intellectual, wise (supposedly) & fellow men speaks in the same fashion of politicians then it’s time to remind them some dosage of their own medicine!

First of all have any businessmen have guts to tell the govt (read as rulers) that it has messed up urbanization of this country especially the big cities! As well it’s the disturbed balance of entire country’s population which makes people leave their native places & rush for few big cities for survival eventually toppling civic balance of these cities also. Take example of Maharashtra, our population is 11.50 cr with area 3 lakhs sq km & look at respective population of Mumbai is nearly 1.90 cr, Thane (region) is 1 cr & Pune region is 1 cr which combinely makes 4 cr & this doesn’t includes New Mumbai & Nashik. Add it all & collectively half of the State’s population is living over just 1/20th of land of entire State & you still think land will be cheap here, which is raw material for the real estate. Then whatever homes are needed are being build in this region only as jobs are here & education is here & obviously the basic material needed for building these homes is in demand here only. For e.g. sand or metal (khadi) may be available in ample near Chandrapur or Akola but how to get that material to Pune, have you thought that! So the builders (read as real estate) has to buy every such material along with land as whatever rates it’s been offered, so gentlemen can you guide any solution to keep control on these materials rates? By the way Tata Sir, your steel is best in quality but costliest in rates in compare to Jalana steel, will you ask your distributors to match the rates with Jalana steel for coming three years for Pune –Mumbai region at least?

If this is about land rates & materials rates then same mess is about making policies about land as well planning issues in Pune region (as I am not familiar with Mumbai rules). Right from slum development to use of TDR to generation of TDR to Metro FSI to TDR on 6 meter wide road to ULC affected societies the list of pending policies will beat Hanumanji ki Punch actually & all this, does affects the costing of the product which isn’t the case in any other industry as unlike other industries here every new project is like setting a new industry actually! On top of it applying any policy with retrospective effect is a favorite game which govt like to play with real estate, imagine Tata sir, if Bahart 2 or 3 (does it matters anyway) comes in 2020 & they asks you to make the necessary kits to be fitted in all the cars you produced since 1990 at you cost, what will be your reaction then, will like to know! This happens with real estate every day from road hand over premiums to Vat & Service tax, everything time travels to & fro here! And why none of you people suggested govt to reduce its premiums or development charges which are being taken even without doing any development around most of our projects?

And if this all is not enough then there is finance front & here also we have advice givers from the field which are never known to say anything about reducing interest on loans of project finance or easing processing things. Here every Banker deals with a developer (read as most developers) like they are beggars & asks for collateral security equivalent to the loan amount, however low sale rate we work out viability of the project & mortgages entire project even for 25% finance is being done of the project cost! I am no financial expert like you guys but like a house wife need not have to be a finance guru to run her home, I at least know how to run my little business & I face these hurdles every day so I am asking you, wise minds! As well housing finance rates also if you can curtail by few percent at least for coming  three/ four years, it will be big help to the home buyers & yes think of removing that processing fees also, that's hardly 1%!

Lastly, we (read as builders) are not asking you for any help or advice so why all of you are so keen on guiding us, is something I will like to ask! At the same time there are many other businesses as well entrepreneurs in our country & in rural or remote areas of MP, UP, Bihar, Vidarbha; can you please share your wisdom for those people also as they too want to survive, same way we the builders want! Awaiting to hear from all of you guys about it & oh yes all the best for your businesses also, sure you too will need some good wishes, Dilse!!

Btw, remembered a small story from Panchatantra about this entire advice issue, sharing along, do read & share if liked; you all may use it for your next advice sessions...cheers!

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The Story. 
A hungry wolf was once drinking water at a stream. He caught sight of a lamb drinking water far down. He wanted to eat it up. He ran up to it and said very angrily, “Why are you making the water muddy? Don’t you see that I am drinking it?”
The poor little lamb began to tremble and said, “Please, sir, the water is flowing from you to me. So I am not at all making it dirty for you.” “But why did you call me names last year?” thundered the wolf. “You are mistaken, sir,” replied the lamb. “I was not even born last year.” “Then it must have been your elder brother. And you must now suffer for his fully.” So saying he jumped upon the unfortunate lamb and tore it into pieces.

Moral. Any excuse is good enough for an evildoer.


--
Sanjay Deshpande 
Sanjeevani Dev.

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