Mixed reactions to the bill

Proposed law seen to tilt heavily in favour of consumers

The Cabinet nod for the Real Estate (Regulation and Development) Bill 2013 is expected to bring in transparency in the real estate sector, promote fair trade practices and safeguard the interest of end users and investors. This Bill seeks to create a regulator for the real estate sector to protect interests of buyers by providing a uniform regulatory environment. The Bill, which shall oversee only the residential real estate sector, will be presented during the monsoon session of the Parliament, in August 2013. Ajay Maken, minister for housing and poverty alleviation, expects the Bill to reduce prevailing rampant corruption in the real estate and housing sector. “Not only will it protect the rights of home buyers, it will also bring in greater transparency. Developers will be restricted from channelizing funds collected from customer for one project to another one, which will provide better security to the home buyers’ investments.”

The proposed legislation has many provisions to benefit home buyers. For instance, the legislation makes it mandatory for developers to launch projects only after getting all the necessary approvals. This is expected to restrict realty companies from pre-launching their projects without clearances. Launching pre-launch offers through advertisements and special invitations is a common practice followed by developers. However, this is completely illegal as developers are selling apartments even before the grant of the licence to develop the property. The legislation will make it necessary for builders to get all important clearances before they sell apartments. The Bill also says developers will have to submit a detailed project report that will include the completion date, land title, and the names of architects and agents to get approval. "By imposing strict regulations on the promoter, the Bill looks to ensure that construction is completed on time, and on completion the buyer gets a property that matches the promised specifications," says Anuj Puri, Chairman, Jones Lang LaSalle India.

However, the developer and broker community, has expressed mixed feelings towards the regulation. The bill has made project construction time bound but it hasn’t ensured the same for government clearances. Delay in project clearances is bound to escalate costs and impact project viability. “To make the regulation effective, the Bill should regulate the entire real estate industry covering all the stake holders like the competent authority, local authorities, financial institutions, electricity board, water board, fire department, etc.,” says C Shekar Reddy, national president, Confederation of Real Estate Developers’ Associations of India.

While consumers need protection, for real estate development to happen more efficiently, administrative reforms are required urgently. Hence the Bill should also take a dispassionate view of the challenges faced by developers.

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Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman

ExecutiveMBA

'Modi is good news for us'

Excerpts from an exclusive interview with Information and Broadcasting minister Manish Tiwari.

How does the Congress react to Modi’s appointment?
We are happy that it is turning out to be a Rahul Gandhi vs Narendra Modi contest, as predicted. We believe it will benefit us because we will be able to establish our secular credentials even better.

People are talking about the Gujarat model.
The Gujarat model may not be accepted by all. It may not work in Bihar where Nitish Kumar was the first to outline his opposition to Modi. Jayalalitha says Modi is a friend but there is no question of an electoral tie up. Sharad Yadav says the NDA is in coma. There are ample indications that Modi is not going to be accepted even by his allies.

Modi is going to attack the Congress on corruption and inflation.
When the Rahul vs Modi mood catches on, voters will judge for themselves who is better of the two. Nitish is not willing to go with Modi because his Muslim votes will desert him. That applies to the rest of the country as well. Modi cannot match Rahul’s image.

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Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman

ExecutiveMBA

Disappearing diplomats

Shortage of diplomats is affecting India's foreign policy

“There are some 25 diplomatic positions in Missions/Posts abroad currently vacant,” was the response given by Preneet Kaur, the Minister of State in the Ministry of External Affairs to the ‘Unstarred Question No. 2024’ asked in Lok Sabha on December 05, 2012. Such a scenario is enough to raise eyebrows about India's international standing.

The recent foreign policy failures have pointed out that these vacancies are affecting India's image as an emerging power. This also puts a question mark on India's commitment towards diplomacy and towards hundreds of consulates present worldwide. The recent case of Italian mariners being allowed to go back and the death of prisoner Sarabjit Singh in Pakistan clearly indicate that India’s foreign policies have failed. BJP spokesperson Sudhanshu Trivedi aptly said, “Government of India should take stern and effective steps in this case. Sarabjit's incident proves that India's diplomatic clout and foreign policy has been totally demolished.”

There is not even a second’s doubt that shortage of diplomats interrupts the smooth flow of information and information to the Ambassadors/High Commissioners thus creating a fissure during important negotiation meetings. Understaffed embassies spell more trouble for Ambassadors than in embassies with no Ambassadors. Back in 2006, the Indian embassy in Qatar faced serious trouble in their daily working due to shortage of staff. The embassy had to be kept closed for several hours everyday in order to manage the high footfall.

After long struggling with Pakistan, now India's border issue with China has become an issue of serious concern. Even though this issue may not be a direct case of shortage of diplomats, but it does indicate the failure of our diplomacy initiatives. Shashi Tharoor, Minister of State for Human Resource Development has been advocating recruitments of experts in the Indian Foreign Service. He has seen the situation first hand when he had served as Minister of State for the Ministry of External Affairs.

There are more diplomats posted in Delhi alone compared to the number of Indian diplomats deployed in the entire world (outside India). Putting this into perspective, there are more people working towards Indian foreign policy than Indian diplomats negotiating with the entire world. Currently, India has only 600 diplomats worldwide, which is comparable to the likes of countries like Belgium and Netherlands, and is nowhere near the strength of US and Chinese diplomats. Even a small nation like Singapore has more diplomats than India.

As an emerging superpower, India needs around 1200 diplomats by 2040, while during the same period, China has estimated a need for around 10,000 diplomats across the globe. With global balance shifting in favour of India, there is an increase in foreign interference.

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Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman

ExecutiveMBA

Can Nokia really pull itself up again?

Nokia is fighting really hard to stage a comeback to the Indian market. First a deal with Microsoft and then a slew of product launches, including the Windows based Lumia, Nokia is pulling every string to bring back those good ol’ days. But can it? By Anirudh Raheja

It was in the year 1995, when Finnish mobile handset maker Nokia had entered the Indian terrain and within no time, it found itself in a pioneering role to shape the growth of the Indian cellular industry when there was hardly any serious competition. In fact, over the years, it churned out a range of handsets across the price pyramid starting from low-cost ones like Nokia 1100 in 2003, and ensured that product features were in tune with Indian conditions. It also kept on unleashing smartphones like N95, based on Symbian and eventually bought the company in 2008.

Interestingly, that was approximately the time when tide started turning as Nokia lost its steam to the relative smartphone upstarts like Apple and Samsung. Even on the low end, players like Micromax, Karbonn, etc ensured that Nokia had to battle harder for every inch of space. And the trend continues till date. In fact, the handset manufacturer’s Q1 (2013) earnings report offers yet another reality check for its stakeholders.

To begin with, the single most glaring negative indicator is Nokia’s rather drastic decline in total mobile phone volume, both sequentially (-25% quarter-on-quarter) and yearly (-28% year-on-year). Although NSN (Nokia Siemens Networks), its joint venture with Siemens, records an operating profit of euro 3 million, it’s rather less than what one would hope for on sales of euro 2.8 billion. Overall, Nokia’s net sales are down globally 20% y-o-y indicating continued problems of selling its actual goods and services in every division, sector and geographical area.

In India too, as it is with other parts of the world, the company has made some serious strategic blunders that have led to serious corrections in its growth story. In fact, Nokia’s overdependence on the Symbian proved suicidal. Rather than developing a new operating software according to the dynamic market, Nokia bought over Symbian Ltd. in 2008 for $410 million to develop a better and update version of the OS. Interestingly, it was the time when Google’s free OS Android was introduced in the market. Symbian immediately came across as outdated, slow and considerably short on features compared to Android. Players like  Samsung, HTC and Huawei entered into strategic alliances with Google, after which they did not look back.

Today, it’s Samsung that rules the Indian smartphone market with 40.3% market share. Nokia, which once dominated it with about 80% market share, remains a distant second with just 25.5% market share (CyberMedia Research). What’s more? According to market tracker GfK-Nielsen’s data, Samsung has finally overtaken Nokia to become the largest seller of mobile phones in India’s major markets. The Korean giant’s volume market share in urban areas in March 2013 rose to 31.4%, surpassing Nokia’s 30.1%.

Hence, to ward off the blow the key for Nokia now, however, has to be its alliance with Microsoft as Windows based mobile phones made market-beating progress in 2012. The relationship is not only the key driver in Microsoft’s success, but has also benefited Nokia, which amassed 76.0% of all Windows Phone/Windows Mobile smartphone shipments in 2012. Confirms Vipul Mehrotra, Director, Smart Devices, IMEA, Nokia, “Windows 8 OS is now picking up steam in mobile devices and we will definitely be reaping the most of it.”


While Mehrotra sounds logical (given that IDC expects Windows OS to become one of the top platforms in the mobile space by 2015, at par with Android), the former giant now also needs to carve out new niches, as to unseat the Google-Apple duopoly is not an easy task, even with its partnership with Microsoft. No doubt, Nokia’s Lumia range finally seemed to be picking up some traction, with 5.6 million shipments in Q1 2013, but this was offset by Symbian shipments dropping to just 0.5 million. Moreover, Nokia’s feature phone business (which accounts for a majority of its total sales) seems to be collapsing, showing a 30% sequential decline and a 21% annual decline.

Certainly, Nokia faces a dramatically different situation today compared to 1995, when it had to battle with the disconnected marketing strategies of players like Siemens and Motorola. There has to be more of localisation in the app space. Nokia’s OVI store, which pales as compared to Android and Apple, should rope in more application developers with a focus on creating regional applications. Also, the company should first get its mass market strategy in order and push down its smartphone price points more aggressively to make them top performers in the lower end. Reason: Volume growth is clearly in favour of the smartphone segment. IDC projects mobile phone shipments to India to grow at a CAGR of 13.03% from 2011 to 2015 and reach 30 million by that calendar year. In contrast, smartphones are expected to clock a CAGR of 63.4% in the same period and reach 77.5 million by 2015.

Initial gains in this market will help Nokia build the momentum for sustainable market share. If you compare the lowest priced Nokia smartphone with its competitors currently, the company is still far from gaining that kind of edge. The Lumia 520 (launched on March 20, 2013) retails at Rs.10,499. In comparison, LG Optimus ME 350, Samsung Galaxy Y and Sony Xperia Mini are priced at Rs.6,400, Rs.7,000 and Rs.9,600 respectively. Not just this, Samsung has recently launched a new series of ‘smart’ feature phones with a price tag of Rs.4,000-6,500, taking rival Nokia’s Asha series of smartphones head on.

Read more.....

Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman

ExecutiveMBA