News in Numbers – September 23, 2015

News In Numbers: September 23

 

Rs 7,269 crore

The penalty levied by the market regulator on PACL, Delhi-based realty and land development company and its directors. This is the highest ever fine levied by the Securities and Exchange Board of India (SEBI) so far. PACL had launched a few schemes in 1996 through which it mopped up thousands of crore from small investors but did not register them with the market regulator. SEBI directed it to register these schemes as a collective investment scheme after which, it asked the company not to launch any new schemes. PACL challenged this in the Rajasthan High Court saying these schemes don’t come under the purview of SEBI. The High Court quashed its SEBI’s notice but was later upheld by the Supreme Court, which asked it to investigate the matter. Last year, SEBI asked PACL to refund Rs 49,100 crore to its investors and wind up operations. At Rs 49,100 crore, it is more than twice the amount Sahara was asked to return Rs 24,000 crore it had mobilised from its investors.

 

11 million

The number of cars Volkswagen said has been equipped with the same software that was used to cheat on emission tests in the United States. In the biggest ever scandal in its 78-year-old history, Volkswagen was accused by US regulators of programming around 500,000 vehicles to emit lower levels of harmful emissions during official tests than on roads. The carmaker admitted that the problem was bigger and that rigging was done globally. It has said that it would set aside $7.3 billion to cover the costs of this scandal during the third quarter of this year and that it would adjust its earnings targets for the group accordingly. The CEO of Volkswagen, Martin Winterkorn, apologised for the current events but has refused to quit.

 

Rs 1.06 versus Rs 2.58 

The comparison between transportation cost via inland waterways and highways per tonne per km. India has failed to develop 14,500 Km of its inland waterways as an alternative to move cargo despite 50% lower costs. The share of goods transported via inland waterways is just 0.4%. The equivalent numbers for Netherlands is 42%, for China and the US, 8.7% and 8% respectively. The Indian government would require Rs 40,000 crore to develop new fairways and funding would come from the World Bank, Asian Development Bank and Japan International Cooperation Agency. According to Inland Waterways Authority of India’s chairman, contracts for waterways transport would be awarded in May next year and start work on eight waterways by November 2016. In June this year, a project to develop a fairway between Allahabad and Haldia covering 1,620 km at an estimated Rs 4,200 crore took off with a $3.5 million funding from the World Bank.

 

28.9%

The percentage of India’s diabetics who are from Gujarat, though data from some states were not available. The National Health Profile 2015 released on Tuesday estimated the number of diabetics in India to be 559,718. Rajasthan is home to about 12% of India’s diabetics. Also topping the list of highest burden of hypertension, Gujarat reported 159,150 cases, accounting for 22% of the total number of cases. According to estimates by the World Health Organization, the prevalence of diabetes and hypertension is 62.47 and 159.46 respectively per 1,000 population of India.

 

21%

The drop in pollution levels in the Delhi suburb of Gurgaon, after the area was declared a car-free day on Tuesday. PM 2.5 levels (fine suspended particles emitted by vehicle exhausts) fell by more than a fifth as over 10,000 fewer vehicles plied the roads. Starting next month, every Tuesday will now be declared a car free day. Delhi and its suburbs are among the most polluted cities in the world. Last year, Delhi replaced Beijing as the most polluted city in the world (according to the World Health Organization) and a recent research published in science journal ‘Nature’ said that Delhi had the second highest deaths due to sources of air pollution in the world. It also said in the absence of adequate measures to tackle air pollution, it may continue to be among the top three most polluted cities till 2050.

 

 

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The common ground between Greater Noida, Gurgaon and Goa

This piece originally appeared on Livemint.com

 

Two of these districts, Greater Noida and Gurgaon, are concrete, practical outgrowths of the National Capital. The third, Goa, is a laidback corner by the western coast. What binds them here is real estate—more specifically, housing as an investment. According to Census 2011, these three are among the 37 urban areas (districts or other civic units) in India where the percentage of vacant houses exceeds 20%—roughly twice the national average in urban areas.

Most such houses have been purchased not with the objective of living in them, but from the standpoint of investment. Such is the volume of investor interest and the nature of Indian real estate that even supply gluts don’t have the effect of hammering down prices. It poses the larger question: as India urbanizes, how will it provide affordable housing to its teeming migrants?

Greater Noida, Gurgaon and Goa are housing-investment hubs

 

vacant-house-chart-1-621x414

 

According to Census 2011,more than 20% of houses were lying vacant in the urban part of 37 districts or other, smaller units of urban geography. In order to level the effect of a small sample size in identifying areas that draw above-normal

interest in real estate as an investment, we excluded areas—21 in all—where the number of vacant houses was less than 10,000. The 16 urban areas left with the highest rates of vacancy were led by Greater Noida, where more than half the houses lay empty. North Goa and South Goa were ranked four and six, respectively. In terms of number of vacant houses, Navi Mumbai Panvel Raigarh was the highest, followed by Gurgaon.

Empty houses don’t translate into lower prices

 

vacant-house-chart-2-621x414

 

Conventionally, vacant houses in an area should be an indicator of oversupply, and should lower prices there. But that’s not the case in the Indian real estate market, where people who want to invest in a house—as opposed to those who want to live in it—hold greater sway. Thus, it can lead to a peculiar situation like Greater Noida, which has delivered the highest price appreciation in the two-year period to June 2014 despite half its houses lying empty. Comparing price appreciation in 23 cities tracked by the National Housing (NHB) Bank Residex index with their respective vacancy rates shows there’s little correlation between the two variables.

Vacant houses exacerbate India’s housing shortage

 

vacant-house-chart-3-621x414

 

High levels of investor and speculator interest in real estate exacts an economic and social cost. It increases housing prices and elbows those who cannot afford it further to the periphery. In 2012, India’s housing shortage in urban India—comprising the homeless and people living in crumbling and congested houses—was estimated at 18.78 million houses. Around the same time, 11.09 million houses—60% of that housing shortage—lay built but unused in urban India, mostly because investors were playing the waiting game for a return.

 

vacant-house-chart-4-621x414

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How Gurgaon was built, licence by licence, govt by govt

This piece originally appeared on Livemint.com

 

Gurgaon is the story of a new city. Land is its centrepiece, and also a source of controversy. Since 1981, seven Haryana governments have approved 1,003 licences for land plots in Gurgaon. The graphics below show how much each government has allotted or approved to which developer in the last 34 years. It shows that 55% of land allotments in Gurgaon were made in Bhupinder Singh Hooda’s nine-year tenure; that DLF Ltd received most of its allotments under Congress rule; that builders were actively acquiring land even after the 2008 credit crisis left them gasping for cash to finish projects; that every large developer has its pocket of presence.

 

 

BY GOVERNMENTS

From 1982 to 2005, five state governments gave 7,400 acres of land in Gurgaon (the first licence issued in 1981, for 161 acres, has been included in the calculation). In the next nine years, the Bhupinder Singh Hooda-led Congress government gave another 9,400 acres, or 55% of all land given to builders in Gurgaon.

Note: The Haryana Vikas Party merged with the Congress in 2004.

BY TOP DEVELOPERS

In all, licences amounting to 16,795 acres have been given to 344 developers. Just three developers account for 38% of the area: DLF (20.5%), Ansals (9.2%) and Unitech (8.7%). They were the first entrants, but now they rub fences with many developers. The presence of other developers has increased principally during the tenure of Bhupinder Singh Hooda, even as the cash-strapped top three pulled back in their land purchases. Further, each of the top three has tried to build a pocket of presence: DLF in north-east and east Gurgaon, Ansals in north-west and Unitech in the centre.

BY YEAR

The maximum allotment happened in 2008, the year in which the world economy was rocked by a credit crisis. In India, the real estate sector, where a bubble had been building, was the worst hit. Starved of cash and facing tame buyer interest, builders were saddled with unfinished projects. Yet, in Gurgaon, the state government kept issuing licences and builders kept buying: as much as 6,380 acres were given since 2008, or 38% of all land allotted in Gurgaon.

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