Dubai, a Dessert Dream!

We don’t sit in our cars & start driving without knowing our destination. We must know where to go before starting our car… Sheikh Mohammed of Dubai.

Sheikh Mohammed also known as Mohammed bin Rashid Al Maktoum is the Vice President and Prime Minister of the United Arab Emirates (UAE), and constitutional monarch of Dubai. Since his accession in 2006, he has undertaken major reforms in the UAE's government, starting with the UAE Federal Government Strategy in April 2007. In 2010 he launched UAE Vision 2021 with the aim of making the UAE "One of the best countries in the world" by 2021. He is responsible for the growth of Dubai into a global city, as well as the launch of a number of major enterprises including Emirates Airline, DP World and the Jumeirah Group. When I step out of the Emirates 777 EP 502 at Dubai airport, it’s exact after 20 years I was returning to the land which people calls Dream of Desert! And as of habit the first thing I do in any new city is try to read as much about the city, the people & the rulers as it gives you better understanding of the place. And it’s in a magazine I came across this quote of Dubai’s present ruler & these very simple looking words gave me first insight of what I am going to see ahead in next five days stay! Those of us who have been used to read every day interviews & twitting of our leaders, are well versed with the usual allegation quotes & pass the buck type attitude they adopt. And here is a Sheikh, a King who doesn’t has any opposition or need not have to face a single election, yet look at the clarity in his thoughts & it’s these words which differentiates the great leaders from ordinary ones!

Actually in recent years my all vacations & travelling has been focused around the forests & whatever learning I got through the same I was happy with it. So a travel to concrete & glass jungle like Dubai came as surprise; as my cousin Kedar who is veteran of Dubai tourism now & my engg batch mate Sanjay Gawali who is in Dubai now for more than 10 years, both were on my head to visit the place. And yes, unless you don’t see what’s happening around the world you never improve is what wise men say! And then Dubai is hardly two & half hour flight from Mumbai, in the same time you reach Kolkata if you fly towards east! So somewhat enthusiastically but reluctantly both at same time, I agreed for the trip & hop on to the Emirates flight to Dubai. I had been to the city exactly twenty years back, & that was my first trip out of India, so Dubai has always special place in my mind. As it’s here only a young man has started his journey to explore the world outside of India. Strangely after that I have never been to Dubai though had been many a times at Dubai airport & kept reading Dubai’s development as well from many friends who has been there keep hearing too, how the city has prospered & its shopping as well buildings & many such things. Then twenty years back also Dubai was a dream with all the shops full with electronic goods & fashion houses, names of which has been not ever heard; but it was just a shopper’s paradise then & a dry arid desert surrounding the glass facades. And then the image of the city portrayed through the bollywood movies of Dubai was just a den of underworld dons & super riches holiday shopping destination, that’s all!

What I observed this time right from the entry is the attitude of the city which has changed; as it’s not just tall buildings & some eight lanes free ways that makes a city but the way city people meet you is what make a city. And on that scale a sea change was there, the city has become more human, more smiling & friendlier. It meets you with a warm hug just like one you will get from your friend from college days! And this is something no other city in Middle East can do to an outsider & this was the first glimpse of the changed face of Dubai! And then next five days I was moving through every street & corner of Dubai, gathering different images of the city in my mind as well camera. The names Karama, Burr Dubai, Deara, Meena Bazar, Gold Souk where familiar yet most old building have given up & now the main Khalid Bin Al Waleed Road is aligned with tallest sky scrapers with most innovative architecture in the world but that’s not what I intend to see as there are many all around the world, what I wanted to see is what the city is offering to its citizen as that’s what differentiates a good city from average cities! And on that account full marks to the Dubai rulers, right from Metros to state of art bus service to the well planned network of roads & signal system to public parking facilities to water management everything is at par with any good city in the world. Many will say what’s big deal, doesn’t they are filthy rich country already & they can buy anything they want & then they have a single ruler in the form of a Sheikh, so no elections ,no opposition types challenges he has to face. But as many must not be knowing Dubai don’t have any oil & all they were was just a shopping destination for tourists, so to convert a shopping destination in to a world class city without any oil money isn’t n easy job. And then just having money doesn’t guaranties that you will make a good city!  And a ruler having supreme power also doesn’t make a country or a city a better place to live, this also we have witnessed. We have witnessed Govt’s with fullest majority & literally no opponent, yet what real change we saw & who has stopped our rulers to make at least one ideal city in the country?

The present Sheikh & his predecessor has ultimate power but then just ultimate power doesn’t change faith of a country but how one use that power is what makes it possible. As Mr. Maktom has mentioned in his quote, first he decided where he wanted to take his City & then he started his journey towards the destination. And what we are seeing today is outcome of years of hard earned journey as during the travel Dubai has gone through many difficulties of which finance was also one major. To start projects worth of billions of dollars is easy but to finish them in time & gaining trust of investors all around the globe is very tough job which Dubai ruler has done over the years successfully. Today every big name in business wants to get associated with Dubai. Every fashion house & every car maker launches there new range first in Dubai market. From ATP i.e. world ranking tennis tournament to cricket matches to Formula One car racing, every sport played at International level has an event here. This isn’t effect of just a shopping hub but this is outcome of making city which has something for everyone coming here & that’s what makes Dubai special.

The Metro has been a boon for tourists as it connects major destinations which are tourist’s attractions like Burj Khalifa & most of the malls. And then there is supporting network of bus service which connects all the metro station & finally the road network allowing the busses to reach their destinations in time! At the same time bicycles have been made available to public outside every metro station & at mostly all bus stops & that too at very modest rent & there are cycle tracks in usable condition. And success is taxi use has been minimized so making the tourists saves a lot on commuting making Dubai a dearer destination for tourists. Then a range of hotel accommodation has been made available, from One million rupees per day charging seven stared Burj Arab to service apartments which one can get at few thousand rupee per day, every option is available for visitors here. And the policies are made accordingly & executed as planned is what more important. And this is outcome of knowing the destination of the journey before start. The metro stations I can understand but even the bus stops are air-conditioned, probably only of their kind in entire world. This enables the people to use public transport like bus even in hottest of summer where the mercury rises to nearly fifty degrees, as they don’t have to wait of footpath in open for the bus! This is what money in good hands makes the difference. As we have seen in Pune that we can’t even keep our shades like bus stops in shape & spend millions on wrongly designed stainless steel bus stops which are useless to serve the purpose. At the same time every bus stop has a cc tv monitoring the activities at the bus stop & ensures that the busses run on time as well stop on exact positions designated for them near the bus stop.  Agreed we are a poor country & can’t afford air conditioned bus stop but a least making the busses stop at proper place & not right in mid of the road is surely we can do which we don’t ever try is a fact! Smallest of the details like fixing corrugated metal strip on floor of metro platforms, which enables blinds to use the metro easily have been thought of & executed. Also for private vehicle users have ample of public parking lots & with facility to pay for the parking even by sms via mobile, type apps are there. What I liked most is the entire city has been divided in four zones i.e. A, B, C & D for public parking places & one can pay yearly fee for parking so if that tag/card is there on the car then you need not have to put coins in the machine every time & this facility is available for zone wise as well entire city wise too! This is what I consider as good governance as the Govt is thinking to make citizen’s life comfortable by trying every way & use the technology as a tool; why can’t we adopt so simple things from our neighbors is always a puzzle to me!

While keeping tourists at center, at the same time Sheikh & his team has been trying to make life of the citizen who works at different levels more easier. Petrol rates are cheap & yet public transport is high on agenda, at the same time in every locality there are huge gardens in making as well community centers are being build. From all over the world people come for their earnings here & most are associated with infrastructure development. At work sites special care has being taken for the workers with designated rest area & the Dubai Municipal Corporation supervise the ongoing constructions through helicopter surveillance as well satellites! Earlier I used to hear the comments that people feel unsafe in Dubai & feel insecure from the policies of Govt but no more that’s been observed & that’s the reason more & more people are settling down in Dubai as it’s becoming more social. As one may go to any place for work when objective is money earning but one will settle only at a place where he is socially comfortable & the present Sheikh seems to have understood this very basic logic of human settlement! 

No more I met anyone who was complaining about feeling uncomfortable in this Dubai, rather gone are the days of lone men living here for earning & keeping families back at home; now even families are also getting settled along happily in Dubai & that’s the biggest positive change I feel!

Another important aspect I found is the efforts Dubai is taking in making it green, as that’s some real tough job. By spending millions you can make a concrete jungle but it needs far more than money to create a green jungle in dessert! As miles along there is nothing but white sand & to plant a tree & make it grow is near to impossible but Dubai has made it possible. The roads are lined up with trees like neem & dates, which survive in driest lands & with every known technique to conserve water even lush grass lawns, have been made to survive. And result is in this trip I saw sparrows & many birds & lots of them around sightings of which are getting rare in even cities like Pune! Though on one front the city is lacking & that is use of Solar power; with nearly 300 days of sun light the city could save a lot on power by using solar for water heating as well lighting. But most of the residential complexes have swimming pools at top terrace & no solar panels! Another front where the city will need some improvement is education facilities as no city or country can become the best without good schools as education is the key to culture; sure the rulers also must be knowing this & will be working on it.

One more name without whom my Dubai trip wouldn’t have been complete is Mr. Chander Bhatiya, my family friend & who has shown me Dubai in my first visit & who has been part of the city for now nearly twenty five years & this time also he was with me to show the city & to make me feel it & not just see! The huge red & white billboard outside Emirates terminal welcomes you saying, “Tomorrow Never Stops Exploring”;  Dubai lives to the billboard’s caption & one now has to believe that even desserts can become a heaven, no more it’s a dream but a reality named Dubai! Many things can be learnt from this dessert dream, all what is needed is to see beyond shopping & duty free tag then we can say yes we have seen the Dubai!

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Sanjay Deshpande

Sanjeevani Dev.

Please do visit my blogs to know about our philosophy at Sanjeevani ! (Click the links below)

http://visonoflife.blogspot.in/2014/01/wanted-leader-for-real-estate-industry_8.html

http://jivnachadrushtikon.blogspot.in/

Social Side of Sanjeevani ! (Click link below)

http://www.flickr.com/photos/65629150@N06/sets/72157627904681345/

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Stamp Duty; Whose Pocket It's Pinching?

Government can wreck a business by confiscating its money by taxation…Owen Paterson

Paterson is a British Conservative Party politician who has been the Secretary of State for Environment, Food and Rural Affairs since 2012 and the Member of Parliament (MP) & I am sure his this statement will be appreciated as well acknowledged by every businessman, whatever country’s citizen he may be! Obviously common man & media wouldn’t like it as doesn’t all the business men are against any tax always? Yes they are & equally true that taxes too are important as or else from where the money required to build the infrastructure for the very same businesses is going to come? So a wise or sane businessman will never oppose taxes, provided it’s on logic. The reason for taking up the topic is New Year is on door step & like every year there are news making headlines about stamp duty’s ready-reckoner rates, as expected are going to be increased & said to be nearly by 20%! Well as usual there have been statements or appeal by developers all over the State to reduce the ready-reckoner rates but like every budget there is hike in taxes on Alcohol & Tobacco; real estate too is soft target for the Govt for revenue!

Many people don’t even understand what ready-reckoner rate & stamp duty is; leave apart its impact on real estate. Though we all use these terms regularly but rarely know what it mean. Many of us have paid these charges for our own home deals yet very few understand its relevance as well its role in the real estate industry. Frankly even after my 24 years in real estate yet I am unclear about how exactly ready-reckoner rates are worked out. For those who have even poor knowledge than me, let me clear I am no expert on ready-reckoner though with the exposure of some friends on both sides of table I can throw some light on the same. Ready-reckoner is a document or index which decides the value of immovable properties. In more detailed or simpler words, we all are familiar with per sq ft rate of properties & ready-reckoner is a guide book by Govt which decides what should be the market rate per sq ft of vacant land or built up area of a building, in a particular city or town in the State. As per these rates the stamp duty is charged on ever deal of land or property as registration of such deal is mandatory by the law. Unless any document which we call as agreement is duly registered by paying stamp duty & registration charges to the Govt, no such agreement is considered as valid by the court anywhere in the country! You can’t become legal owner of your property unless & until you have paid stamp duty as per ready-reckoner rates; no bank of financial institute will give you loan for any such property of which agreement hasn’t been registered by paying the stamp duty as per ready-reckoner rates. Your name can’t come on the ownership documents of the property such as 7/12 extract or property card unless it’s duly registered by paying stamp duty & registration charges. Now you will understand importance of stamp duty regarding any property deal. 

Usually stamp duty is 5-6% of the deal i.e. agreement cost or as per the ready-reckoner rates whichever is higher & registration charges are 1% or maximum Rs 30,000.00! This is why ready-reckoner rates are important as they are directly related to the stamp duty factor which amounts to thousands of crores of rupees & is important factor for yearly revenue of State Govt. For e.g. if you have purchased a flat in Baner of say 2bhk & of built up area 1000 sq ft at say Rs 5000/sq ft rate making it Rs fifty lacs, then by 6% your stamp duty to get this document registered which you will have to pay will be  Rs Three lacs.  But if as per the ready-reckoner rate of this flat is say Rs is Rs 6000/sq ft, then the costing of your flat as per Govt will be Rs Sixty lacs & the stamp duty which you will have to pay for registering the agreement will be      Rs three lacs sixty thousand, which will be nearly Rs. sixty thousand more than what your deal has been done! Because even if you have purchased the flat at Rs fifty lacs but as per ready-reckoner its cost comes as Rs sixty lacs & the registrar at registration office considers higher value for charging stamp duty so you will end up paying higher stamp duty! This is just an example to explain how the stamp duty calculation works; though it depends up on individual cases to work out exact calculations.  

Every year a team of thousands of revenue dept’s officers are gathering data about this information of property rates which are constantly changing & every year ready-reckoner rates are updated by IGR i.e. Inspector General of Registrations who is chief of this department. The usual process is gather data of agreement cost of all the properties of which sale has been registered in the past financial year & analyze the same to arrive the property prices in respective area, a system which is logically correct but can’t be considered as hundred percent accurate. The simple reason is it considers highest rates for deciding property rates. For e.g. in Baner area if one thousand flats has been sold then it will mostly consider highest rate of sale which actually depends on many factors such as land cost of a particular proposal, then amenities , project size, type of the buildings i.e. multi storied etc.  This year the present IGR was very proactive with collecting data not only from the department people but has taken in consideration suggestions from all the concerned persons such as cooperative societies, associations of developers, advocates & many such.   The IGR also has come up with “Sarthi”, an online suggestion/ complaint receiving portal, where any person can post about any suggestion regarding stamp duty & ready-reckoner. Yet a fact can’t be neglected that Hon IGR represents Govt & his task is to increase revenue, so the policies will be oriented on this aspect only!

The impact of stamp duty isn’t just that it’s an added burden on the flat sale i.e. the buyer has to pay more stamp duty in amount wise but most of the municipal corporations various premiums which the developer has to pay for getting plans sanctioned are related to ready-reckoner rates; so all these charges are also going to be increased by this increase in readyreckoner rates! For e.g. staircase & balcony premiums for getting them FSI free needed to pay some premium per sq ft of their area & these are charged as per readyreckoner rates of built up properties in that particular area, so if the there is any increase in ready-reckoner rates then it will directly affect these premiums & they will also get increased! Here one will say what’s big deal, isn’t the developer gets benefit of these areas in terms of free FSI? Well, the builder does get but it’s indirectly increase in expenses making the end product i.e. home, costlier! It’s like any increase in rates of petrol, resulting the auto rickshaws are going to increase their fare & at the end it’s the common man whose transport is going to get costlier! Another aspect is entire taxation depends on ready-reckoner value, so property taxes will also go high for the citizens as they too are linked with ready-reckoner rates. Main impact will be on income tax calculations as even if the deal rate is lower than ready-reckoner rates, the tax will be calculated on ready-reckoner rates only, which will be again a big dent to the pockets of the developers as well property buyers! On the very same lines even the public service projects also will get costlier as if the land rates get increased naturally the compensation for the land required for the roads & various other reservations purposes like play grounds, gardens & many such will increase. This will make local bodies’ budget collapse as well cost of services will be higher!

Here one may again say, isn’t it logical as if the property prices are getting higher then why one should complaint to pay the tax or give compensations? Again it’s not question of not paying taxes or compensation, it’s about realistic scene on the horizon of growth. Are the rates really increasing? A quick glance at the real estate & even a ten year kid will tell you that’s rates have been steady over last year & leave increase but at many places its being observed that rates have gone down for properties in compare with last year. On other hand land costs haven’t come down & simple reason is land owners have nothing to do with rates of finished products i.e. homes on these lands! All they are interested is in getting more value for their piece of land!

So the cry from real estate industry isn’t against increase in rates but for rationality in the approach. Every year there has been increase in ready-reckoner rates all over the State but then is it true with prices of the flats i.e. ready homes?  Also the criteria should be minimum value of the deals happened in last year & not higher or average as because of this the smaller or mid segment homes unnecessarily gets in to league of high end homes & end up paying more stamp duty than required. Here an option of keeping a band width of ready-reckoner rate can be thought of instead fixing some particular figure of rate per sq ft. So only if the agreement price of any deal is below this band width then only average rate per sq ft should be applied for as the prevailing ready-reckoner rate for that locality! Also why the premiums of local bodies are linked with the built up rates of the property & not as per land rates which never gets increased like the built up rates! As in present system the local governing bodies are getting higher revenue from premiums without doing anything on infrastructural fronts is a bitter truth & for which the common citizen is being forced to pay higher for his home!  Rather taxes like property tax should be based on the quality of service the citizen gets & not as per the ready-reckoner rates.

I have already cleared that I am no expert on taxes or finance but as a common man what I feel that no one is against paying what is legitimate; but for that a transparent system to decide what is legitimate rather moral is correct term, has to be in place! If I am buying my home at a particular rate then it has to be charged as per the deal I have entered in & not with some fictitious figure, is my basic expectation from the Govt! Already the real estate industry has enough fronts to fight with & I know there is & will be never sympathy for the developers neither in Govt’s mind nor in common man’s heart, yet this is the industry where there are still few good men work to deliver homes to the society only. And a home is very basic need of a man, may it be rural area or urban, so its Govt's duty to see that this home will be affordable to the common man & any policy should be worked out keeping this aspect in mind! Somewhere an increase by 20% in ready-reckoner is going to make that small dream of the common man’s home more costly. And as I repeatedly say when we try to help common man’s dream fulfilled there are no sides to the table; as for him, the developers, the govt officers, the politicians, the Media all are same. And keeping this at center, work out the solution about ready-reckoner rates, is what need of the time or else it’s not just the common man’s dream of a home is in doldrums but his entire belief on the system that a common man can have his home, is at stake, mind it!

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Sanjay Deshpande

Sanjeevani Dev.

Please do visit my blogs to know about our philosophy at Sanjeevani ! (Click the links below)


http://visonoflife.blogspot.in/2014/10/know-your-neighbor.html

http://jivnachadrushtikon.blogspot.in/

Social Side of Sanjeevani ! (Click link below)

http://www.flickr.com/photos/65629150@N06/sets/72157627904681345/

For any of your complaints about city, log in at link below

http://www.punecorporation.org/GRS/Complaint/LaunchComplaintCitizen.aspx

Think Green, Think Life

www.sanjeevanideve.com