Package or a Mirage for Real Estate!

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“In the real estate business you learn more about people, and you learn more about community issues, you learn more about life, you learn more about the impact of government, probably than any other profession that I know of.”… Johnny Isakson

John Hardy Isakson is an American politician serving as the senior United States Senator from Georgia, in office since 2005. A member of the Republican Party, he previously represented Georgia's 6th Congressional district in the United States House of Representatives from 1999 to 2005. And indeed by now most of the real estate guys must be thinking why they haven’t read Johnny’s above words of wisdom a bit early but then most real estate guys (read builders) were never good at words of wisdom, isn’t it? And nobody respects a profession full of non wise people (read fools) so real estate isn’t also exception to this rule & that’s why even the govt doesn’t respects (read doesn’t care) for real estate! But then in this country which goes by masses & never by classes, even the govt has to take cognizance when “save real estate” cry is rising high, so it came up with a package! Now many will wonder “a package for real estate”, what’s this? As we are used to see food packages for flood hit citizens, we know packages for govt employees i.e. 6^th pay commission or 7^th pay commission (the list is unending just like the movie  franchise Fast & Furious series, actually), we have read about package of share or equity to board of directors, we even know about the packages of aid given by USA to other countries (read our beloved neighbor country) & then we are known to loan waiver packages for farmers which are dying every-day due to debt ridden agriculture! But a package for real estate (read builders, at least I thought so) was never heard of, isn’t it? Yet the govt has come up with some Rs70,000 crore (please don’t ask me to count zeros on 7), wow, certainly govt thinks of saving real estate one must say!

Now again some (read many) will say what’s the need of saving builders as over years, actually decades, has not builders earned enough from real estate, by selling homes at higher price every day than earlier, rather it’s the home buyers which must be given the package! Actually, I won’t blame such voices as some part of they said is true & remaining part the builder themselves has proved right by their life style or say attitude towards their as well others lives as ask any common man around, what he thinks about the builders & his answer will tell you the story about real estate i.e. builders! But suddenly not just builders but everybody associated with the real estate has realized or realizing that there is no money left here & that’s why package aspect has come in picture. And when I say everybody associated with real estate then our dear govt also has a big part (read big bite) in this association with real estate. So in hidden words govt also is part (read beneficiary) of the package for real estate. Let’s see how, as common man again will say this is some builder’s ploy to make more money again. Well, for that first one has to understand govt’s money making role in entire real estate chain (read profession). Right from charging stamp duty on every deal which ranges from 6% to even 8% of the deal value (under the name of Metro development or Sur-Charge etc), govt starts earning money with real estate. In Pune average 7% stamp duty one has to pay for every document of any real estate transaction is done. And joke is even when the for purchase of a land the stamp duty has been paid by the builder for buying the land from the land owner yet when a building is built on this land then to sale the flats on the land stamp duty is charged full on the flat’s sale value which includes the land cost, in nut shell the govt earn twice stamp duty for the land cost, isn’t it! Means is a land is bought at the rate of say Rs 1000/sft then govt has already charged Rs 70/sft stamp duty & now when a flat has been sold in the building on said land at Rs 4000/sft then govt charge 7% of this agreement cost also means Rs 280/sq ft, means for the project per sq ft govt has earned Rs 280 + Rs 70 i.e. Rs 350/sq ft from just stamp duty! And then even if the flat buyer who has bought the home in said project has to sale the flat for some reason in first or second year then also again on that sale the govt applies stamp duty with same rate, now imagine how much govt has earned here!

And it’s just start i.e. stamp duty of land deal, then right from development charges of local bodies to various premiums for terraces, balconies to passages to stair-cases to even parking lots  & lift rooms, govt earns through every sq ft of area. As well govt charges for utilizing TDR also which the govt itself claims as currency which has been paid to land owners to acquire the reservation lands! And then there are NA charges which are applicable even for the residential zones also (god only knows the logic) & on top of it if some DP (proposed) road is going through your land then to use that area for your project which is on that land only, still you have to pay premiums to the govt for using that road’s area! And then you have fire dept’s noc as your building is of height more than 16 meters which most buildings has to be & for that you have to pay fire premiums! At the same time you have to get your land demarcated every three years & you have to demarcation fees to the govt. Yes there is property tax also, even for the vacant lands which you have to pay to the govt & all such premiums amount can go to Rs 500/sq ft, & this is in addition to the stamp duty amount per sq ft as mentioned above! Ok, if you have done with these figures then we have GST, which for real estate is average 12% of the flat cost,  for the flat buyer & can be even 24% for few items of real estate goods or services. And if you are buying a reedy possession flat (read home) the there is no GST but then don’t ask from where the builder who has spent at average of 18% of construction cost will be recovering, don’t guess, you are right, it will be recovered from the flat buyer’s pocket only, adding more to govt’s kitty & again stamp duty gain is there for govt for this added burden of GST loading on the flat cost! And it’s not finished as govt earns even by providing electric supply to the buildings builders build by making them pay for the infra or ask the builders themselves make the infra whereas rules (read law) says some nominal amount has to be paid per electric meter to the govt for electric supply & at present it goes to more than Rs 1 lac per meter, in many cases in Pune!

And lastly there is our dear Income Tax, how govt can survive without income tax as Nations’ development depends on you paying income tax, right? So, there is income tax for the govt which comes average 10% to 15 % & joke is there are Income Tax free schemes by the govt for affordable housing but for that also there is minimum tax i.e. 12%, this is my acquired knowledge as I am not a finance guy but an engineer, experts can guide me on this! If your brain’s hard disc is functioning properly now you can add all these “percentile” figures which are loaded on the real estate transaction is land & flat sale & then tell me who is the biggest gainers in real estate business now & whom the package will help in actual! And when I referred as govt in all above examples, it comes with many faces & many names which includes PMC as public or civic body, MSEDCL as power supply, Registrar of Stamps as IGR, Fire Dept, Central govt as well State finance dept for GST & yes “Super Baap” i.e. Income Tax dept, if at all you make any profit (read, in recent times, is what I meant)!

I am telling very clearly that I don’t say to wave all above charges or don’t apply any tax on real estate, or wave of all the loans by the builders as I am a builder but not a fool, to make such statement! Real estate understands that govt needs money for development of the country & for so many years the industry was happily (is it?) accepting all such burden by the govt from its multiple faces only because there was profit, means money in it! But now when there is over supply of end product (read homes) as well raw material i.e. land, confusion in policies, lack of infrastructure as well buying capacity of the home buyers has been reduced & on such background when govt as well society & media all expects the builders to lower the rates by cutting down their profits then why the govt is not doing that by cutting down size of its bite from the cake named real estate, is what I want to ask the govt! Because look at the remedies by Hon Finance Minister, giving package of Rs 70,000 crores is good but from where this figure has arrived & who can guaranty that it is enough for reviving entire real estate segment of the country & how? If you read the clauses the as usual they come with all safe guarded conditions & I wonder how many projects which really are in need of funding will get benefitted by this package. Because the news says it’s for affordable homes projects only, now there is no set definition of affordable & then the project or company should be free from any debt or such issues! Well, if a company is debt free or loan free then why it will need a package in first place & why only affordable homes project when most of the real estate’s projects are stuck because of wrong policies or irregularities in the policies of different dept’s of the govt!

It’s not about just giving loans & making the builder able to complete the buildings but about sale of the buildings units i.e. flats! As on one side people are unable to buy homes where all the infrastructure is available which makes any building a complete home & on another side where buildings are ready but has got no buyers because lack of proper civic infra around such buildings! At the same time only in Pune thousands of projects are hanging in between launching & completion because of policies like red line blue line of rivers or NOC from aviation dept, & all this for no fault of the developer but because of non-coordination between govt’s own faces (read depts.); now tell me, what package govt is going to provide such incomplete projects & what’s fate of such builders as well the flat buyers here? And then we have a cancer to deal with i.e. Illegal Constructions, these needs no funding, asks for no permission, gets no occupation certificate, nothing they need as they don’t exists, yet they hunt down clients which are seeking for legal homes but unable to buy the one!

Rs 70,000 crore package is welcome step, but more welcome step will be, stream lining entire policy makings & their execution also, for the real estate which will include demolishing every illegal construction too! Or else this package will melt down just the way rivers pour down sweet water in to the ocean which remains salty only despite all the sweet water inflow, keeping the sailors’ thirsty forever!

Sanjay Deshpande 

Sanjeevani Dev.

Please view my sharing about real estate in Pune at U-Tube link below..

https://youtu.be/g3lx1Nq7pBs

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

http://visonoflife.blogspot.com/2018/08/pune-city-no-1.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

www.punecorporation.org

Take your issues to Hon PM at link below..

https://secure.mygov.in/#

Think Green, Think Life

www.sanjeevanideve.com

Amazon Forest Fires & Agnipath Dialogue!

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 “What we are doing to the forests of the world is but a mirror reflection of what we are doing to ourselves and to one another.” … Chris Maser.

Chris Maser was trained in zoology and ecology and worked for 25 years as a research scientist in agricultural, coastal, desert, forest, valley grassland, shrub steppe. As well an expert in sustainability, a noted author, an international speaker and workshop facilitator empowers citizens, businesses and public officials of not just USA but many countries across the continents! And how true his above words are coming out, actually these words are not new to our Hindu Mythology as what we give that only comes back to us but as like many other fronts this very basic principle or philosophy of life we have forgotten & that’s what gets reflected to our attitude towards nature also! Of-late the world (read  eco sensitive world) is shocked by the forest fires in rain forest of Amazon & social media is abuzz with comments as well statistics about the damage done to the biodiversity due to these fires. That way many people will say what is big deal, as most people in our country are immune to any such news, as here in the fires humans get burnt & die, so what’s so much of fuss over the fires in some remote forests! 

I don’t blame them, as our country is really one  place where human life is cheaper than anything & people are so used to dying & mishaps that forest fires is least of the list of issues to be concerned! Well, I won’t get in to statistics as most people are bored with figures, right from EMI, to Share Index to Bank Interest Rates to GDP to Inflation & if not anything GEE or NIT cutoffs every day we have to deal (fight) with figures! So, why bother with some more figures that how the Amazon rain forests are playing role of world’s oxygen bank & how many hectors of forest are burnt along with how many thousands of species habitat has been lost to how many years will be required to undone the damage which has been caused by these forests etc etc! Instead will try to explain the impact (not just damage) of Amazon fires in other words (read Puneri). Imagine one morning you wake-up in your cozy bed & as usual you pull the curtains of your bedroom window to welcome the fresh breeze along with sun rays in your room with a view of green trees in your buildings premise (yes there are still such buildings in Pune) & what comes in along with the wind is thick smoke with ash dust & you see a smog covered black sky & burnt trees with not a shade of green around leave away the birds & squirrels chirping; what will be your reaction? Xxxx what’s this xxxxx… (sorry, for non printable words) isn’t it? Exactly this is the impact of Amazon’s forest fires on the surrounding & what I have described is not some scene from western Sci-Fi movie but it’s the future if we are not going to feel anything about such news regarding forest fires!

Ok, now someone (read many) will ask, this has happened in Brazil which is other side of the world & it’s bad, agreed but why we bother; let them handle their mess as we have enough of ours! Again I won’t blame them as nature conservation was never really high on our agenda because on one side where we are dancing & jumping for our Mission Moon on other side our Hon Prime Minister has to appeal to the countrymen for curtailing plastic use & reduce plastic waste, wow what a amazing lot we are! We the people, on one side use all latest tech gadgets, are updated about the world, we comment on every incidence around but when it comes to our own home or habits or backyards then we oppose PMC not taking away wet garbage from our homes & oppose treating our own wet garbage by ourselves, we oppose pay & park schemes, we throw garbage in rivers, we oppose ban on loud speakers & DJ’s in processions & on top of it we oppose police’s drive (read law) of helmet wearing which is for protection our own head! Now tell me, the citizens, which doesn’t cares for their own lives opposing helmet wearing law, how we can expect protecting them the trees, birds, insects & wild life in general & yet we take pride in calling ourselves wild life lovers or nature conservationists, we are nothing in actual but wild life losers!

When it comes to forest fires which is in a way biggest threat to already endangered wild life, the reasons in Amazon forest fires & what’s happening around us right here in our country, isn’t much different. There in Brazil it might be drug lords or land mafias’ (all over the world media just loves this later term) & here there may not be drug lords but in State like ours which is number one in man animal conflicts, we are hundreds of other reasons for forest fires. The first & foremost reason of the forest fires around is not greed of humans nor man animal conflict, it’s our ignorance or negligence towards our duty (read attitude) regarding wild life conservation & reason for this negligence is lawlessness i.e. no fear for the law & enforcement! And for this hundred & one percent I will blame our “Mai Bapp” Govt, may it be any ruling party in power! In this country people slowly have stopped worrying about law may it be life of some human or a tree or an animal or that of a bird, we(read people) just don’t care while taking away(read snatching) one for our personal reasons which may be greed or negligence or just for fun or even need in some cases! We burn forests for our farming, we burn forests for making buildings, we burn forests for making roads, we burn forests for excavation of earth for minerals, and we burn forests just because we feel like smoking when we are supposedly enjoying nature on trekking & we throw cigarette butt around! And worst thing is that we don’t regret it at all as we don’t care for forests & we know no law is capable enough (read cares enough) to punish us for our act of burning forests around us! And let me tell you we don’t need to just use fire to burn the forests (read destruct), we can burn the forests by Bulldozers’ or JCBs’ by just wiping out piece of forest, as effect is same like fire; ask millions of Jews during Second World War, does it made difference to them as getting killed by gas chamber or gun fire or just by starving, end is same i.e. total destruction! Same way when the forests are not being destructed by fires we use another means as mentioned above yet the outcome is same.

In yesterday’s newspaper I read one headline which as usual our so called progressive State can’t carry with honor & it said we are No. 1 State in man– animal conflicts. Our progress & development is biggest threat to the wild life as time & again I have stated it’s not the development but how & what we call the development will only decide fate of wild life in the State! And as of now whatever the Govt top bosses may claim about balancing nature & development when it comes to ground level we don’t care for nature is a fact & forests are the first which gets hit under the name of development! And here forest doesn’t mean just Project Tiger types forests (read habitat of tigers) but it’s every that piece of land which is in existence for hundreds of years naturally without interference of humans. This may be grass land, dry land, hills covered with shrubs or land with big trees; all such lands are free from any concrete structure or agriculture use & are homes for thousands of species which includes termites to rodents to birds & even smaller animals like mongoose or heir! And we are burning down every such piece of land & the threat is more towards such pieces of forests which are near to cities like Pune as here it’s not just development factor but greed factor also comes in picture! Because most of us thinks these shrubby or grass lands with nothing on it are not of any use but for using them as making homes of the humans or bungalows on it to make them worthwhile. But in the process we forget that these lands too are forests & as mentioned above homes for hundreds of species but who cares! And when it’s not our homes, we burn forests for making the use of the land on which it’s standing for our food i.e. farming! So may it be our need or greed, end use is burning of forests!

High time that there should be very clear demarcation of every forest land on ground as if we can’t protect Amazon’s rain forests which is so remote then imagine how our forest dept can protect the forests which are so near to human settlements! And then once demarcated then follow very strict laws regarding damaging these forests, again something we are not very good at. As when we can’t protect trees right in the heart of our cities how we are going to prevent cutting or burning the same away from the cities, well again who cares as all we are interested in making the so called forest laws but implementation is never the intention! Most important is like per some ten thousand citizens if one police man type figures we are adopting for law & order of humans then why can’t same logic is applied to strengthen the forest dept which protects millions of trees & thousands of species spread over crores of hectors of the land, is I want to ask our rulers i.e. "Mai Baap" Govt! As unless you give enough man power & authority to the forest dept, they alone won’t be able to protect the forest, not from fires, not from getting cut & certainly not from the humans! And lastly it’s just not “Plant Trees” campaign will work but “Save Every Tree” should be the campaign which we need to run in all segments of the society, especially school kids & college teens which are the hope for these burning forests! Make every person adopt one existing tree or shrub around his or her surrounding as then only we can make the forest survive! You may not reward people for planting trees as that’s duty actually of every human being but the punishments must be sure for burning (read killing) the trees, without valid reasons & without proper measures of balancing the killing!

Amazon fires may have happened in Brazil which is far west, thousands of miles away from us but the ash rising from that fire is a warning for entire globe & dear fellow countrymen I know we all love our Bollywood movies, especially of our beloved Amitabh Bacchan the Boss; remember his one dialogue to the villain from movie Agnipath? “Hawa Bahot Tej Chalta Hai Dinkar Rao, Topi Sambhalo, Uad Jayega…” (https://www.youtube.com/watch?v=eD0e5imsX10)! It means wind blows very fast; hold your head gear or you will lose it i.e. you will lose whatever you have if you ignore the winds! Well, need I say anything more about protecting forests, as the wind does blows from west to east & very fast…!

Sanjay Deshpande 

Sanjeevani Dev.

Please view my sharing about real estate in Pune at U-Tube link below..

https://youtu.be/g3lx1Nq7pBs

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

http://visonoflife.blogspot.com/2018/08/pune-city-no-1.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

www.punecorporation.org

Take your issues to Hon PM at link below..

https://secure.mygov.in/#

Think Green, Think Life

www.sanjeevanideve.com

Engineering, Engineer's Day & Engineers!

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15th September, Engineer’s Day!

"An Engineer is not the one who has a degree or diploma of some engineering branch; he or she is the one who takes lead when see a problem around & applies his knowledge to solve it & gives his everything to make this world a better place & yet be ready to get blamed by the world that how he messed up the things & made them worst!!"...

Happy Engineer's Day to every such fool who is an Engineer by Heart & not by just Brain!!...

This is what I wrote on my college Whatsap group today morning! That way the Whatsap has made far bigger impact on my genre (who are in their 40-50 plus) than the younger ones! As Whatasp don’t need signing or opening account, the information or opinions you share isn’t public except on groups which you have willingly joined (mostly) & its way easier to operate than Insta or FB (in my opinion) & you can be very much in touch one on one also with anybody you want to be! And Whatsap has made many old friendships revived in good way as it’s directly linked with your cell phone numbers & our engineering batch also isn’t exception! Though most of the times you receive same post (read forward) from many groups & especially due to free internet data (thanks Geo) more & more people are hooked to Whatsapp & its forwarding game! Rather even on our engg college groups mostly its forwards & that too we all know what’s main subject of such forwards when its engineers! But it’s the Whatsap only which has made many people realize that there are so many Days to celebrate in a year & one of them is Engineer’s Day!

Well, I am frank that I too realized Engineer’s Day when I opened up my Whatsap today morning & loads of images of a man with Pagadi (a traditional head gear) with words of wisdom on it started popping up, sorry Dr Vishvesharayya, this is the only day on which most people see your snap or read your words of wisdom about engineering which actually are applicable for every profession!  And as usual next day all so called engineers & non-engineers deletes all such posts & media to free up the memory of cell phone & speaking of memory of the brain, well, most of us has deleted it long back! With due respect to my all engineer friends, who gets very upset or angry or even violent when rubbed them on their professional achievements or capacities, be honest with ourselves & ask, how many of us are doing the job of an engineer which Dr Vishvesharayya has referred to! And be honest, as some of you may be doing their bit but collectively  what we are seeing around, does that makes you proud? See around the buildings we build, right from planning (yes it’s not just architect’s job) which is done keeping in mind just sale factor & not the utility factor to seepage & leakage to collapsing of compound walls (yes, buildings too) & violating all sanctioning norms (many of engineers only are responsible for that), does all such buildings displays our engineering skills? Then the road conditions of our Smart City, we can’t make roads which stands to one rainy season & every year we have to read the news papers displaying failure of our engineering skills with photographs of water logging & pot holes, isn’t it? All the time our rain water storm drains chokes or just miss their job of collecting rain water & makes the surrounding flood. Then we succumb to non-engineers (read mostly elected members) & make entire stretch of open lands concertize , which kills bio-diversity of the city as well reduces water absorbing capacity of the earth & we still call ourselves engineers! We built structures in rivers & streams by changing their course, we dump our construction waste in natural water bodies & lakes, damaging bio-system & causing not just floods but wiping out entire eco-system & we are proud about being engineers! We cut trees to make roads, Metro, railways, canals & we never bother to plant new trees leave apart making them grow & we still call our creations engineering marvels! And those of us which are superior & has capacity of inventing something better, we flew out of country (H1B1) than to make this country better, by sharing or using our knowledge here & we call it Greater Good of the World or bigger opportunity to use our knowledge & still we celebrate Engineer’s Day from abroad with Sir Vishvesharayya’s photo! The list is endless of our glamour & glory filled stories as under the name of engineer we are nothing but just making our own personal foundation strong (read wealth)! And here millions of people who are not fortunate to get any education not just engineering looks after us , we the engineers, in the hope that these so called bright minds will make their life a shade better, I wonder, how many of us actually deserve to be called as an engineer!

Well, it hurts, reading above words, isn’t it? But sorry this is fact & it won’t change even if you don’t read it or laugh at it! Indeed there are some good engineers left & they are doing their bit here in this very country & we can see their creations in the form of Koyana Dam or Sea Link Bridge or Konkan Railway Track but in a country of our size & population a list of few structures won’t be sufficient where naked truth is three fourth of the country-men don’t have potable water to drink or majority people don’t have a proper home to reside! Things like electricity to drainage line to schools to medical facilities are a distant dream for many!  We need every one who calls himself or herself as an engineer to give hundred percent towards the job at hand & job at doesn’t mean just do what has been told to you & get you fee or salary but job at hand is understand what you role is by being an engineer! It doesn’t mean just to follow orders & do your job by the formulas or process you have read in the book. Being a good engineer means you look out for the problems around & without waiting for the order from someone up, address the problem & solve it & go out looking for next problem. A better engineer is the one who not just solves the problem but guides others for not making them face the same problem again! And the best engineer is the one who anticipates the problem in advance & stops it before the problem comes in existence! Now tell me frds, you fall in which above category of engineers?

And fault is not of the present engineers, fault is our generation engineer’s, as we were blessed to have teachers which were engineers at heart first & then they were teachers! They have understood engineering far better than many & yet they preferred to remain teachers than using their engineering knowledge for upgrading their own life style! Unfortunately most of us are too busy in making only our selves live as a better (read prospered) engineer than making other engineers understand what we have been taught! And I don’t mean that leave our respective jobs & take on teaching; we can teach other young engineers from our projects, from our working methods, from forming systems of production as all these are like open school of engineering for many associated with it! But of-late if we see around then what we find is the senior engineers themselves are busy in making money which is prime criteria of success here & in that process we forget the engineering itself!

Sad part is even after so many years of his death yet we have just one figure at whom we can look with respect as an engineer, yes I am referring to Sir Vishvesharayya as look around & see how many such faces comes to your mind when its Engineer’s Day! Indeed we have now our age Vishvesharryya, in names like Dr Kailasavadivoo Wasan of ISRO, whose dedication to the job at hand is such that he cried when Vikram couldn’t land on the moon in final stages! Frds, it’s those tears for the duty or job is what makes you a real engineer & not just the degree or the post! On this background may it be a private job or govt, how many such examples we have who dedicates everything for the job or project they are working on as an engineer? I think somewhere we are forgetting the very meaning or concept of being an engineer or the branch of knowledge i.e. engineering!

Engineering is not just science or some formulas but it’s an attitude towards life which teaches you to analyze everything logically & then only accept; its application of knowledge to solve the problems & make things better & not just knowledge gathering! An engineer is the one who adopts this attitude of life & live by it always & not just for the sake of some fat salary job! An engineer applies his knowledge dedicatedly for the job at hand at the same time keep his mind (read brain) open to absorb new knowledge which will make his ability to deal with the problems in better way! And then look at the lot we have today which calls themselves an engineer, right from wrong attitude to lack of discipline to having ego of that degree which refrains you from learning something new even from the fitter or welder or mason on the site, everything is there but engineering!

High time for educational institutes (read so called engg colleges) to the on field engineers who themselves are like living engineering class, everyone must introspect on this day, are we doing honor to the degree we have been proudly flashing around? Or else this day will just remain on whatsap forwards, which even Sir Vishvesharyya will regret for becoming ambassador of the profession, we call engineering!

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Sanjay Deshpande 

Sanjeevani Dev.

Please view my sharing about real estate in Pune at U-Tube link below..

https://youtu.be/g3lx1Nq7pBs

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

http://visonoflife.blogspot.com/2018/08/pune-city-no-1.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

www.punecorporation.org

Take your issues to Hon PM at link below..

https://secure.mygov.in/#

Think Green, Think Life

www.sanjeevanideve.com

An Orphan Named Real Estate!

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“Predicting rain doesn’t count. Building arks does.” – Warren Buffett

“Rule No.1: Never lose money. Rule No.2: Never forget rule No.1.” – Warren Buffett.

Well, do I needed to introduce this name as it’s the only name came to my mind when the subject was  “What’s wrong with real estate”! As my writing mentor Mr. Mukund Sangoram, who is a respected name in journalism called me to invite for a conclave about the issues (read problems) real estate industry is facing & the invite call went on for quite some time where he patiently listened to my frustration & I wasn’t frustrated for no sale or reduced margins or less demand for flats or any such thing but for the condition of real estate industry which has become like an orphan. Actually I have different word than orphan as heading but will share it ahead & controlled my urge to use it as title of sharing for gentleman reasons! The first & foremost question is does the government wants or say considers this real estate thing as industry? Because going by the policies or whatever you call them about real estate then I really wonder what has this business become over the years! It’s one of the most basic commodities actually as nobody buys a home for fun or just like window shopping fling which we are so used of in Malls or on Net Shopping but most people buy it for their use. Agreed for decades it’s been also considered as investment but then that’s again was not fault of the real estate or the builders but of the “Mai Baap” Govt only which allowed this business to turn in to a money making (read investment) machine by the policies! And now the very same govt is turning the real estate business in a mess & we are busy in finding areas of problems! I blasted out my list of issues to Mukund Sir & promised to be there on conclave but somehow due to some unforeseen issue I couldn’t make it next day to conclave, yet I listed out six main factors which I felt needed to be voiced, which I will be sharing here! Before that a brief back ground as suddenly why everybody is so concerned about real estate is something we need to ask first, because till just few years back, all seems like a never ending sweet dream with real estate, isn’t it? So what has happened that now everyone right from media to bankers to investors & yes even the flat buyers as well needless to say builders too are running like its Dooms Day for real estate ahead! Actually real estate never has seen the days which it is seeing now & for so long time as in every industry there was recession & there is recession, open news paper & you will see sales of automobile sector all time low & even the garment industry is facing same heat & so is white goods or electronic gadgets but then why real estate seems to be more panicked? Answer is real estate (of late) has not been making its product for the consumer i.e. end user but the investors & till the time the baton (read as flat) is getting passed from hand to hand to the end user, all was going fine. But suddenly if in 4 x 4 relay race the last lap runner doesn’t turn up the way remaining three will get baffled along with the organizers of the race, the same thing has happened in real estate. Here the last lap runner is the flat buyer who is not going to hand his baton to anybody but complete the race with it & now he is vanished! So the earlier three members which we can consider as builder, investors & all associated segments which includes suppliers, contractors, professionals like architects even media (big revenue comes from real estate ads) are confused how to complete the race & so are the organizers i.e. many departments of the Govt!  This is the case with real estate as all segments are now stuck or confused what to do & that’s why suddenly everybody is sympathetic with real estate but the organizers, which they too will eventually for their own reasons!

On this background when it’s asked by media in presence of Hon minister of housing, that what the problems for real estate are, it’s like a patient is being asked by some expert doctor about his illness! Here we go…first the list of issues, actually there are infinite yet tried to zip file it!...

1.There must one single govt dept for real estate for all proceedings & policies. 2. Time bound making of development plans making as well implementation of the same. 3.No changes in policies once finalized & in case you change the policies then it won’t be applicable for committed i.e. sanctioned developments. 4. Govt must be responsible to provide supporting infrastructure for the development charges it takes from the builders. 5. Finance dept also to take real estate in confidence for making policies like GST. 6. Govt must remove every illegal structure (building) in time bound program & no illegal buildings will be regularized. Let's see how these factors as not being handled properly real estate has become a miserable thing!

1. To start with first acknowledge real estate as an industry, is the demand of all real estate association since long at which every govt has turned a blind eye & deaf ear, only god knows why!  Nothing great will happen with the scene around yet recognition will be there mainly for nationalized banks which as of now look down at real estate (read builders) the way a guy looks at a dirty beggar at signal from his AC Mercedes! The finance rates for real estate are whooping 15% & above & with all other things such as processing fees & stamp duty on mortgage deals etc adds on! Also in most cases nearly 50% collateral is a must for any real estate loan, god knows which builder can afford such terms for loan! As well once acknowledged as industry there will be one govt dept to control is which as of now are more than ten & number is rising! Right from the "Thaliawa" i.e. UD i.e. Urban Development to Revenue to local bodies like PMC/PCMC to Town Planning, no one knows who actually runs real estate. And outcome is policies & more policies as agreed real estate is local business but then why can’t be there just one department which will deal with entire sanction process as well guide lines for the process & follow it! And then we have MSEDCL i.e. electric supply & Fire Dept & Water Dept & Irrigation Dept i.e. Blue Line-Red Line (flood lines) for NOCs’ & yes there is “Subka Bapp” is Environment Dept which supersede all, till now! Now if you are unfortunate to be a builder in city with Defense air ports then there is aviation authority also! These all depts’ makes their own policies & run them at their whim to which real estate has to succumb! This all affects the actual work time in just getting clearances & then every dept has its own egos to handle, that’s different story! So we must have only one dept which will decide fate i.e. everything related to real estate than above entire list!

2. And no wonder that with so many depts’ no development plan or land use policy ever gets executed in time by any of the dept! As if PMC is going take a development plant then it has to be approved by town planning & then UD. And on this DP, right from irrigation dept to environment dept to forest dept or even defense dept, can raise objection or put their NOC above this if they disagrees to the DP!  And then if PMC sanctions the plan then irrigation or defense can cancel or disapprove it; this happens only in India! And as so many depts are involved right from making to executing the DP, delay is the only outcome! Result is the roads, play grounds, gardens, rivers, water bodies, schools, hospitals & many such reservations remains on DP only & in actual gets converted in to slums which some day (there again another dept i.e. SRA) may become another concrete slum with generating TDR! Need is there has to be a time bound execution of all the reservations shown in DP & again for that one dept is a must!

3. The main problem real estate is facing right now due to messing up of so many depts’ is nobody is sure which land (read) project is clear as today you get sanction from one dept & you start the work, you accept money from the flat buyers & tomorrow some other dept slaps a “Stop Work” notice on your project for violating their norms! And when you go to the dept which has sanctioned your plans they shrug their shoulders & ask you only to sort it out! And with due respect sad part is, media & judicially also blames the builder (read real estate) for violating the norms which he even don’t know in most cases! For e.g. at present in Pune there are many buildings which has been duly sanctioned by local body but now can proceed because of aviation noc which came in picture later, what fault of the builder in this! Same is true with cases where you bought a piece of land adjoining to river with residential zone & now irrigation dept says it’s in the flood line so no construction can be done here, what’s builders fault in it? Millions rupees are at stake & even the law doesn’t stand by your side but gets victimized with media trial or says its builders responsibility to check all such things, well if the govt’s one dept doesn’t know or follows some law, how the builder will know it in first place, but who cares! I don’t say build in river bed or don’t care about defense facilities but whatever you want to do, make one time policies & inform it to all in clear way, is it that hard to do? And if as a govt, you can’t do your policies in proper time, why the builder should suffer for your foolishness! In nut shell, no retrospective effect to stop the construction work once sanctioned by any of the govt dept, has to be the first policy of the real estate!

4. And with all sanctions, nocs’, permissions etc in place yet all these govt depts’ make themselves full proof by making the developers sign many undertakings & affidavits which says govt (read concerned dept) is not responsible for anything! Means, PMC is not responsible to make drainage lines for your project though it has sanctioned the plans with all premiums, PMRDA wont maintain the roads but it will accept development charges for plan sanction of the projects in area with poor road conditions, MSEDCL won’t build transformer room or lay HT lines but the developer will do everything & hand over the same to the MSECL,  about telephone lines & BSNL, the lesser we say is better  & lastly the registration dept will charge stamp duty but won’t take responsibility of legality or illegality of the document or the transaction, just great! & the list goes on & on! Point is, if the govt wants revenue from real estate & accepts money for the development then the govt only must provide every infrastructure for what it is charging the builder!

5. At present the major concern for the real estate is cash flow as with the policies from finance dept neither banks are giving finance or at non-affordable interest rates nor there is booking in ongoing construction work! Reason for later is there is zero GST on ready possession homes which is like final blow for the dying business! I really wonder what kind of logic has been applied for no GST on ready homes as then who will bear the GST burden which has been paid by the builder on every single item by which the home is build? And it’s not small, average it comes to nearly 12% of construction cost, so if the govt thinks home is essential commodity then cancel GST on any home, in making or ready possession, what difference it make but ending up only builders making losses! Same is applying income tax on unsold stock, a thing which is adding interest burden on builder govt is charging tax on it, how can you charge income tax on unsold inventory!, can you do this to Bajaj & Telco for their unsold vehicles? Fact is, finance dept give a damn to real estate issues & never really has involved the wise real estate people (there are such) in making any policy, which is a must or else there won’t be builders left in the business, to pay GST or any tax!

6. And last but not least, the cancer of real estate i.e. illegal constructions! I can show you neighboring buildings with sale rate difference of 305 to 40% only because one is legal with all due sanctions & another is illegal without any sanction! In this country law is for the person who follows it, is the bitter fact! And then the very govt which has all above depts’ & made hundreds of Laws & Acts (read RERA, MOFA) to control real estate, files affidavits in the court to regularize (read legalize) illegal constructions! Here, if you go for sanction then you have to go through a grind of all the process of getting clearances for many depts’ & still with all sanctions in place, any of above dept can stop your work but if you don’t go to any dept for sanctioning of your building then no dept can give you a stop work as they don’t care about your building as its illegal & one day eventually when you have sold all the flats with flat holders have taken possession, all the govt depts’ comes together & make your building legal, that’s what I call a Happy Ending!

Indeed for many things builders too have been responsible for the situation the business is in & one of the main reasons is greed but then the builders have paid for their greed, are they not! And what about govts’ role in making real estate die, as the govt also has earned a lot through real estate business or industry whatever you call it, what difference it’s going to make any way! And now we are searching the reasons of real estate business’s downfall; it’s like asking people around, how you are looking, when the mirror is right in-front of you! And on top of it when anything goes wrong in the city, may it be floods or traffic jams or pollution or reduction of green cover, for media & ngos’, builders are the best targets to hit!

Frankly going with all such attitude of the system (read govt & the society) the heading came to my mind was, “Real Estate Named Bastard” but I controlled my frustration & made it “Real Estate Named Orphan”, as orphan means a child without parents but a bastard means no one knows the parents of the child & so is real estate!

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Sanjay Deshpande 

Sanjeevani Dev.

Please view my sharing about real estate in Pune at U-Tube link below..

https://youtu.be/g3lx1Nq7pBs

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http://visonoflife.blogspot.com/2018/08/pune-city-no-1.html

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