Moneycontrol
/home/moneycontrol/commonstore/commonfiles/headband_data_live.json
Array
(
    [0] => Array
        (
            [title] => Exclusive keynote by MSME Minister Nitin Gadkari at Small Business Virtual Summit with CISCO on 17th July - Register Now
            [lp_url] => https://www.moneycontrol.com/cisco-smb-virtual-summit/?utm_source=moneycontrol&utm_medium=headband&utm_campaign=cisco_smb
            [ga_event_tracker] => Array
                (
                    [category] => Register-webinar
                    [action] => From-Home
                    [label] => Register-webinar
                )

            [start_date] => 2020-07-08 00:00:00
            [start_date_epoch] => 1594146600
            [end_date] => 2020-07-10 16:00:00
            [end_date_epoch] => 1594377000
            [rank] => 1
        )

    [1] => Array
        (
            [title] => LIVE Webinar: RSI - 5 Star Trading Strategy Webinar by Vishal B. Malkan . Watch Now!
            [lp_url] => https://www.moneycontrol.com/ms/malkansviews/?utm_source=Moneycontrol&utm_medium=Headdband
            [ga_event_tracker] => Array
                (
                    [category] => Watchnow-webinar
                    [action] => From-Home
                    [label] => Watchnow-webinar
                )

            [start_date] => 2020-07-10 16:00:00
            [start_date_epoch] => 1594377000
            [end_date] => 2020-07-10 17:00:00
            [end_date_epoch] => 1594380600
            [rank] => 2
        )

    [2] => Array
        (
            [title] => Tune in on 17th July for the Small Business Virtual Summit with Cisco. Register now!
            [lp_url] => https://www.moneycontrol.com/cisco-smb-virtual-summit/?utm_source=moneycontrol&utm_medium=headband&utm_campaign=cisco_smb
            [ga_event_tracker] => Array
                (
                    [category] => Register-webinar
                    [action] => From-Home
                    [label] => Register-webinar
                )

            [start_date] => 2020-07-10 17:00:00
            [start_date_epoch] => 1594380600
            [end_date] => 2020-07-17 11:00:00
            [end_date_epoch] => 1594963800
            [rank] => 3
        )

    [3] => Array
        (
            [title] => Special Offer: Subscribe to Moneycontrol PRO at ₹1 per day for the first year. Use Coupon: PRO365.
            [lp_url] => https://www.moneycontrol.com/promos/pro.php
            [ga_event_tracker] => Array
                (
                    [category] => PRO365
                    [action] => From-Home
                    [label] => Ribbon
                )

            [start_date] => 2020-07-17 11:00:00
            [start_date_epoch] => 1594963800
            [end_date] => 2020-07-31 23:00:00
            [end_date_epoch] => 1596216600
            [rank] => 4
        )

)
Array
(
    [count] => 1
    [data] => Array
        (
            [0] => Array
                (
                    [title] => Tune in on 17th July for the Small Business Virtual Summit with Cisco. Register now!
                    [link] => https://www.moneycontrol.com/cisco-smb-virtual-summit/?utm_source=moneycontrol&utm_medium=headband&utm_campaign=cisco_smb
                    [ga_event_tracker] => Array
                        (
                            [category] => Top Band
                            [action] => Virtual Summit
                            [label] => From-Home
                        )

                )

        )

)
Tune in on 17th July for the Small Business Virtual Summit with Cisco. Register now!
Last Updated : Feb 25, 2016 09:20 AM IST | Source: CNBC-TV18

Govt must take steps to revive investment cycle, says HDFC CEO

Keki Mistry says a single window clearance for property developers will help boost the real estate sector.

The government must announce measures in the Budget to kickstart the investment cycle, HDFC CEO Keki Mistry tells CNBC-TV18.

He says a single window clearance for property developers will help boost the real estate sector.

On the recent firming up of bond yields, Mistry says interest rates typically tend to rise in February and March due to drying up of liquidity.

Below is the verbatim transcript of Keki Mistry’s interview with Anuj Singhal, Latha Venkatesh and Guest Editor Nirmal Jain, Chairman of IIFL on CNBC-TV18.

Nirmal: What are you expecting in the Budget for housing sector which is the priority sector? The Prime Minister (PM) has mentioned the government is very committed to this sector so what do you expect in this Budget?

A: If you ask me, the important thing is to really kick-start the investment cycle. Now, housing worldwide has been taken as a barometer to gauge how the economy performs and in India we know that there are something like 276 industries, big and small, which depend on the housing sector. So, the big ones are the ones who make cement and steel and paint and the small ones are the ones who make nuts and bolts and stuff like that. So, by giving a boost to the housing sector, effectively you will be giving a boost to the rest of the economy.

So, my sense is this Budget will focus on four or five themes. One of them will be something for the rural economy, something to boost rural economic growth because we have seen that the urban economy per se consumption is good. If you look at airports, airports are full, flights are running full, hotels are running full, restaurants are running full but the rural economy is weak because of two years of poor monsoons, so something for that.

Second is, some measures to spur investment, to get the investment cycle going, to boost sentiment. Now that could be in the form of accelerated depreciation, it could be in the form of something like an investment allowance which we used to have years and years ago.

Third theme would be housing and I think to boost housing there are various ways it can be done but primarily the simplest way to boost housing apart from any incentive schemes that you have would be to increase the fiscal benefit that is allowed to individuals who are looking to buy house. So, as you know, the interest that is payable on a housing loan is tax deductable and even the principle repayment of housing loan qualifies for a deduction. So, there are different limits under the Income Tax Act. So, there is a limit under Section 24-I, there is a limit under Section 88 and so on so forth.

Also, there are various other sections in the Income Tax Act which deals with savings which incentivises individuals to save more money. Now, if we could combine all these different benefits which are appearing under different sections and put it under one section, one consolidated section, which says that irrespective of whether you are taking a housing loan, you are paying interest on a housing loan, you are repaying a housing loan, you are making a contribution to a pension fund or a provident fund or you are paying an insurance premium ore anything of that sort, there would be a consolidated deduction of up to let us say Rs 4,00,000-5,00,000 that is available. So, if we were to look at the different sections in the Income Tax Act, the total benefits which are given for savings to my reckoning is about Rs 4,50,000.

Nirmal: Even Section 24-I which is now Rs 2,00,00 which was Rs 1.25 lakh almost a decade ago and I think the average size of home loan or home prices would have gone up by 3.5-4 times in that time period. So is there a need to make a step up and correct it that itself to Rs 5,00,000 or something like that?

A: Ideally yes but whether the government’s finances would permit them to do that or not is something I don’t know. However, of course there is always a case to increase the tax benefit because housing per se has become significantly more expensive over the last 10-20 years whereas these tax benefits whilst they have been increased have obviously not increased in proportion to the increase in house prices. Also, if you look at the urban market, you look at Mumbai or you look at Delhi, it is so very difficult to a buy a property out of your money.

Nirmal: In that context what do you think of the regulations that are coming for real estate, is it a good move or there can be a flip side that whenever anything is regulated bureaucracy, corruption, delays or higher cost can get in?

A:  I think the important thing or two most important things that the real estate regulator would need to do, one is to simplify the process of getting approvals. Today one of the biggest reasons why cost of housing is so high is one is land prices, land prices are very expensive. Secondly the formal system is not allowed to fund land purchase so land purchase is usually funded by private equity investors who charge extremely high returns and that effectively increases the cost of the house and the third is the process of granting approvals for projects is very time consuming and you don’t get approvals at one go, you have to go through different stages, you have to keep going to various authorities and get approvals.

So, if we were to have a real estate regulator which provides a single window clearance sort of platform where every single approval that a developer requires can be given by this one authority then I think it would go a long way in simplifying things.

The second role of the real estate developer is to bring in a little more transparency. So, today when you go to buy a property, you will hear people talking of saleable area, you will hear people talking of carpet area, you will hear people talking of super built up area – the common man does not understand. So if we were to have one simple base like what is a carpet area for property compulsorily disclosed in every single agreement, I think that would go a long way in bringing in transparency.

Latha: Will money get cheaper at all for a home buyer in terms of EMIs this year in 2016? Bond market is such a sulk, they are sulking about everything, government bonds are going at almost 8 percent today, state government bonds are going at 100 basis points over sovereign paper. Nothing below AAA is going at all in the corporate side. You are talking about tax giveaways, if the fiscal deficit were even 3.7percent your market will sulk like hell.

A: My sense here is that whilst I hope to heavens that this is a temporary phenomenon. I think it is a temporary phenomenon but usually you will see that in February and March interest rates historically have always been high and there are three or four reasons for that.

One is liquidity in the system dries up. One, because usually government stops spending money or reduces the amount of spending, because of the Budget which is round the corner. So, less liquidity in the system. Second is you have advance tax payment so nearly 40 percent of the taxes of the year are paid on one day, March 15. So suddenly from mid February people start planning for their tax and that money sort of gets stashed away so it is not available for investment.

Thirdly which may not be the case in the current year, is that companies tend to borrow more money in February-March because by doing so and by starting a new planting machinery or a new business they can get depreciation for tax purposes for the year. So, usually liquidity is tight in February-March and then as you get into April, a new financial year, government has collected money, the government starts spending the advance tax they have collected and liquidity starts improving. So, this is a historical trend over the last 20 years that I have seen.

This time it has started a little earlier, normally we would start seeing this from around the third week of February, this time we have seen it probably a week or two weeks earlier. I hope this is temporary and it will start. I am sure Reserve Bank of India (RBI) will take measures to infuse enough liquidity in the system.

(Interview transcribed by Priyanka Deshpande)
First Published on Feb 24, 2016 11:42 am
Sections