CREDAI NCR

Annual Performance Review

2008-09
 CREDAI NCR
Annual Performance Review
2008-09
 Contents
CREDAI NCR
President
Pradeep Jain

Contents
Parsvnath Developers Ltd.
chairman@parsvnath.com
Vice President
Kailash Gupta
Aerens Jai Realty P.Ltd.
mds@jaihouse.net
Hony. Secretary President's Message .....................................................02
Rohit Raj Modi
Ashiana Homes Pvt. Ltd Institutional Profile ...................................................... 03 - 09
rohit@ashianahomes.com ‘Realty' Perspectives .....................................................11 - 20
Immediate Past President
Surender Gupta CREDAI Initiatives ....................................................... 21 - 31
Aerens Gold Souk International Ltd.
cmd@goldsoukindia.com
CREDAI NCR Initiatives ................................................ 33 - 44
Treasurer Policy Advocacy ...........................................................45 - 53
Bharat Halwasiya
Halwasiya Development Building Synergies ........................................................55 - 57
bharat@halwasiyagroup.com Forging International Partnerships .................................59 - 61
Executive Members
Ashish Somani Engaging the Investor Community ................................ 63 - 70
Somani Worsted Ltd.
Reaching out to the world .............................................71 - 79
Ashok Bansal
Odean Builders (P) Ltd. Innovation Initiatives ................................................... 81 - 84
Getambar Anand CREDAI NCR Theme for 2009........................................85 - 87
ATS Infrastructure Ltd.
Manish Agarwal
Clarion Properties Ltd.
Sanjeev J. Aeren
AEZ Infratech P.Ltd.

Relationship Manager
Dibyendu Choudhuryy
dibyendu@credaincr.org
Contact: +91 99109 07673

1411 Chiranjiv Tower

43 Nehru Place
New Delhi-110019 INDIA
Tel: 91-11-46634663
Fax: 91-11-46634613
www.credaincr.org
President's Message
Dear Friends,
Greetings!!

Firstly, let me thank each one of you on behalf of Confederation of Real Estate Developers'
Association of India, Delhi NCR Chapter (CREDAI NCR) for supporting our actions and initiatives
throughout the year for an all round growth and development of the real estate sector in the
country. It is indeed a pleasure to share with you the developments in CREDAI NCR over the past
one year through the compilation of “Annual Review 2008-09”.

We have all experienced, year 2008 09 with extreme highs and lows in real estate sector. With an
aim of reviewing our various activities, views & opinion on various issues and initiatives during the
good and turbulent months and to identify areas of further progress, we bring to you the Review 2008 - 09. However, beyond this
the intention remains apprising and engaging all the stakeholders through this compilation. We are confident that this would go a
long way towards serving our common interests and pave the way to grow together.

The developments have been compiled as outlined below:

• Quarterly Newsletter CREDAI NCR
• CREDAI NCR signed MoU with University School of Management Studies, Guru Gobind Singh Indraprastha University,
Delhi - February 2008
• CREDAI NCR organised a forum to discuss Tax Issues impacting Real Estate Sector on 10th April 2008 at Ranaq Hall PHD
Chamber of Commerce and Industry, New Delhi.
• Forging International Partnerships - Indian real estate representatives attended Expo Italia Real Estate (EIRE) in Italy
• PHD Chamber and CREDAI NCR jointly hosted a seminar on Tax Issues faced by the Real Estate Sector
• Developing Relationships, On the Global Radar CREDAI NCR Website www.credaincr.org
• Knowledge Creation and Dissemination - CREDAI NCR - Guru Gobind Singh Indraprastha University, Delhi jointly
organized a workshop on Contract Management in Real Estate.
• Policy Advocacy - CII (Northern Region) & CREDAI NCR jointly hosted Real Estate Summit - “The Changing Paradigm in
Indian Real Estate”
• CREDAI's series of Meetings with the Government of India to put across the points concerning the sector and its allied
manufacturing units.
• Initiatives of CREDAI NCR in the Noida & Greater Noida region
• Initiatives of CREDAI NCR in the Delhi region
• Initiatives of CREDAI NCR in the Punjab region
• Initiatives of CREDAI NCR in the Ghaziabad region
• Initiatives of CREDAI NCR in the Haryana Region

We are very happy to bring you the perspectives and valuable insights from our Industry Experts on the sector at large and what
futures our experts forsee for the sector. We are thankful to them for their views and opinion.

With continued support and wonderful association of each of our board members, members, staff, stakeholders, I am confident
we shall together continue our onward journey towards further growth and development of the real estate sector through the
established CREDAI NCR platform.

With this commitment, we invite you all to join CREDAI NCR in this progress.

Best Wishes,
Pradeep Jain

President
CREDAI NCR

02
Institutional Profile
 Annual Performance Review
2008-09

CREDAI NCR:The Institution

The Confederation of Real Estate Developers' Association of India, Delhi-NCR Chapter (CREDAI NCR)
represents around four-fifth of the real estate development business in Delhi and other parts of NCR.
Over the past seven years CREDAI NCR has established stability in the industry and its achievements at
state, national and international levels has contributed immensely to a steady annual growth rate of the
real estate development sector at about 30 percent over the last few years. CREDAI NCR emerged as a
leading platform for addressing the problems of the Real Estate Promoters and Developers of the NCR
including those from Delhi.

Mission and Vision

CREDAI NCR is driven by the vision of imbibing an environment of 'Best Practices', 'Create and Share
Knowledge' in the domain of real estate and allied sectors, and build 'Strong Partnerships' with
likeminded institutions across the world. To this end, the association has always been open to new
business ideas and practices that promote healthy corporate culture and competition. This assumes
importance more so because real estate sector in India is yet to be recognised as an industry by the
government. In today's age of information, knowledge is critical to survive, sustain and grow in
business. Also, it is necessary that along with knowledge creation, there should be a well defined policy
of dissemination and exchange of knowledge with the stakeholders. Collaboration with technical
institutions and universities dealing with real estate and allied activities is therefore an inalienable part
of the policy agenda for CREDAI NCR. Strong partnerships with like minded organisations sharing
similar values and objectives as CREDAI NCR would pave way towards rigorous learning from each
other on varied approaches to resolve business issues. In order to achieve these goals CREDAI NCR
pursues the mission of 'Inclusive Growth', Policy Advocacy' and 'Networking'. Growth would not
translate automatically into development if it is not sustainable and inclusive. An all round progress
therefore would be in the best interests of the real estate developers community and accordingly this is
practiced in CREDAI NCR. Policy advocacy efforts essentially require a proactive mindset and ability to
appreciate the problems faced by business in the future. 'Networking' is the spirit of engaging with
stakeholders.

CREDAI NCR Membership grows at almost 60 %

05
CREDAI NCR Members
S.No Company's Name Concerned Person Designation

1 A B A Builders P. Ltd. Mr Sunil Totlani Dir

2 Aashiana Homes P.Ltd. Mr Rohit.Raj.Modi MD

3 Aerens Buildwell P.Ltd Mr Davender Gupta MD

4 Aeren R Dr Rajesh J. Aeren MD

5 Aerens Gold Souk International Ltd. Mr S.K.Gupta CMD

6 Aerens Jai Realty P.Ltd. Mr Kailash Gupta Vice Chairman/MD

7 AEZ Infratech P.Ltd. Mr Sanjeev J. Aeren MD

8 Alpha G.Corp Development P.Ltd. Mr.S.K.Sayal CEO

9 Ambience Infrastructure P.Ltd. Mr Raj Singh Gehlot MD

10 Amrapali Mr Anil Sharma CMD

11 Ansal Properties & Infrastructure Ltd. Mr.Pranav Ansal MD

12 Arora & Associates Mr K.J.Arora Chairman

13 Ashiana Housing & Finance (India) Ltd. Mr.Om Prakash Gupta MD

14 Assotech Ltd. Mr Sanjeev Srivastava MD

15 ATS Infrastructure Ltd. Mr Getamber Anand MD

16 BPTP Ltd. Mr. Kabul Chawla MD

17 CHD Developers Ltd. Mr Gaurav Mittal MD

18 Chintels India Ltd. Mr Prashant Solomon MD

19 Clarion Properties Ltd. Mr.Manish Agarwal MD

20 Cogent Enterprises Ltd. Mr A D Bhargav Dir

21 Country Colonisers Private Limited Harvinder Sekhon CEO

22 Crown Buildtech P.Ltd Mr J.P.Gupta MD

23 Divine Developers Ltd. Mr A.K.Singhal MD

24 DLF Universal Ltd. Mr Rajeev Talwar Joint MD

25 Emaar MGF Land Ltd. Mr Shravan Gupta CMD

26 Era Landmarks India Ltd. Mr. H. S. Bharana MD

27 Express Builders Ltd. Mr Vinay Goel Dir

28 Fargo Estates P. Ltd Mr Purushottam Bhageria JMD

29 Gaursons India Ltd. MR. MANOJ GAUR MD

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 Annual Performance Review
2008-09

30 Halwasiya Development Mr Bharat Halwasiya MD

31 Hines India Real Estate P Ltd. Mr Yash Gupta Joint MD

32 International Land Developers Ltd. Mr Alibuddin Chairman

33 IREO Management P. Ltd. Lalit Goyal VC/MD

34 IVRCL Infrastructure & Projects Ltd Mr M S Rao COO

35 Jaypee Greens Ms. Rita Dixit MD

36 Jindal Realty ( P ) Ltd. Mr Naveen Jindal Chairman

37 JMD Realtors P.Ltd Mr Sunil Bedi MD

38 Jones Lang La Salle Meghraj Property Consultants Mr. Anuj Puri Chairman & Country Head

39 Kajaria Infrastructure Mr Ashok K Kajaria CMD

40 Kamal Enterprises Mr.Kamal Choudhary MD

41 Land Craft Developers P.Ltd. Mr Manu Garg MD

42 M3M India Limited Mr Basant Bansal MD

43 Mahagun India P.Ltd. Mr Amit Jain MD

44 Mamram Developers P.Ltd Mr Sanjay Gupta MD

45 Mapsko Builders P.Ltd Mr Rajiv Singla MD

46 Negolice India Ltd. Mr Vikash Bhagchandka President

47 Ninex Developers Mr Raj Khurana CEO

48 Odean Builders P. Ltd. Mr Ashok Bansal MD

49 Omaxe Ltd. Mr Rohtas Goel CMD

50 Orris Infrastructure Pvt. Ltd. Mr Vijay Gupta CMD

51 Parsvnath Developers Ltd. Mr. Pradeep Jain Chairman

52 Pearls Infrastructure Projects Ltd. Mr M L Jaiswal MD

53 Piyush Colonisers P.Ltd Mr Anil Goyal CMD

54 PNB Housing Finance Ltd. Shri V.K. Sood MD

55 Prabhatam Developers Ltd. Mr Dinesh Gupta CMD

56 Pushpanjali Constructions P.Ltd Mr Gaurav Sharma GM

57 Raheja Developers P Ltd. Mr.Navin K. Raheja MD

58 Rajesh Projects ( India ) Pvt. Ltd. Sh. Rajesh Goyal MD

59 Realtech Group Mr Rohit Malhotra CEO

60 RPS Infrastructure Ltd. Mr Rakesh Chandra Gupta MD

07
61 S G Estates Ltd. Mr. Gaurav Gupta MD

62 Sanmati Infraproject Ltd. Mr. A.K.Jaju MD

63 Shipra Estates Ltd. Mr Mohit Singh MD

64 Shourya Towers P.Ltd. Mr Anil Jain CMD

65 Shristi Urban Infrastructure Dev.Ltd. Mr Sujit Kanoria MD

66 Somani Worsted Ltd. Mr Ashish Somani MD

67 Sonia Farms (P) Ltd. Mr Sunil Gupta MD

68 Splendor Landbase Ltd. Mr Hridey Vikram Bhatia CMD

69 SRS Real Estate Ltd. Mr Bishan Bansal Dir

70 Suncity Projects P Ltd. Mr Ajay Aggarwal MD

71 Supertech Constructions P Ltd. Mr R K Arora MD

72 Taneja Developers & Infrastructure Ltd. Mr. Kamal Taneja MD

73 Tulip Infratech P Ltd. Mr. Praveen Jain MD

74 Unitech Ltd. Mr. Sanjay Chandra MD

75 Unity Buildwell Ltd. Mr Govind Aggarwal MD

76 Uppal Developers P Ltd. Mr Gian Bansal CEO

77 Uppal Housing Ltd. Mr Manish Uppal MD

78 Vatika Landbase P Ltd. Mr. Anil Bhalla MD

79 Vipul Ltd. Mr. Punit Beriwala MD

80 Bhiwadi Developers Association ( 18 Members )

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 Annual Performance Review
2008-09

CREDAI NCR Governing Council Board (GCB)

President Vice-President
Tel: 011 23310198 / 23350120 Tel: 011 46634602
chairman@parsvnath.com mds@jaihouse.net
Pradeep Jain Kailash Gupta

Hony. Secretary Immediate Past President

Tel: 011 40564056 Tel: 0124 4317700/08
rohit@ashianahomes.com cmd@agsgroup.in
Rohit Raj Modi Surender Gupta

Treasurer Executive Member

Tel: 011 26533468/26967098 Tel: 011 26289555
bharat@halwasiyagroup.com sanjeevaeren@aezindia.net
Bharat Halwasiya Sanjeev J. Aeren

Executive Member Executive Member

Tel: 011 23327735/53 Tel: 011 43538300
ashokbansal@suncityprojectsltd.com manish@satyadevelopers.com
Ashok Bansal Manish Agarwal

Executive Member Executive Member

Tel: 011 46562222 Tel: 0120 2516277/78
asomani@siliconcity.co.in getamber@atsgreens.com
Ashish Somani Getambar Anand

09
 ‘Realty’
Perspectives
 Annual Performance Review
2008-09

Finding 'Real' Value in a

Changing World in 2009
Anuj Puri
Jones Lang LaSalle Meghraj (JLLM)

In 2008, the Indian real estate sector took an unprecedented body-blow. Until then, it was
definitely a seller's market - developers had no difficulty in finding buyers for their properties and
obtaining funding for new projects.
Today, we are facing a severe slowdown in overall demand. The recent measures taken by the RBI
and further injections of liquidity to effect any significant changes. Until then, domestic demand is
likely to sink even further, and international interest will remain at cautious levels before the situation
gets better. There has already been an overall drop of demand to the tune of between 45-50%.
We expect these figures to reflect a more positive scenario in 2009, at least with respect to residential
real estate. There is still a huge demand for residential and commercial properties in many parts of the
country. The fallout of the ongoing financial crunch and a justified watch-and wait stance by
homebuyers will set some badly needed market adjustments in motion between January and March,
2009.
We also expect that, in 2009, the circumspection currently evident on both the domestic and international
investor fronts will give way to cautious forays. A decisive turnaround phase will come only in another 18
months to two years, but 2009 will see the groundwork for revival being put in place.
In terms of liquidity, we will definitely continue to have a challenging situation on our hands.
However, in 2009, we expect more innovative financial structures and liquidity mechanisms to
ensure that delivery of the development pipeline is not affected. For end users, there has already
been a ray of hope. The repo rate and reverse repo rate have been reduced by 100 basis points, or
1%. For end users this will, of course, reduce the cost of acquisition of property in terms of EMIs.
But, a reduction in interest rates alone will not suffice to bring about a positive reversal in the
negative demand dynamics currently prevalent on the real estate market.
In terms of investment opportunities for 2009, the onus from now on will be on affordable housing in
the residential sector, sustainable, high-quality buildings in the office sector and infrastructure
projects. We are also seeing a decided rise in demand for project management and facilities
management, as developers are now seeing the wisdom and cost-effectiveness of outsourcing such
functions to experts in these fields.
If one times one's entry point into residential and commercial real estate correctly, the first two
quarters of 2009 will be the ideal time to invest for the long term. The market will not see such low
rates again, and the demand for properties is high and will be even higher. Investors should choose
their location carefully and use the interim period to shortlist and research potential properties.

13
Realty Market Outlook for 2009
Cushman & Wakefield

The year 2008 proved to be quite eventful for India's realty sector. Following the boom of the past
couple of years, the sector was faced with the beginning of a downturn which led to corrections in
prices across all asset classes by end-2008. This correctional phase is likely to continue in the mid-
term; and is likely to trickle down to the land market in due course.
The outlook for real estate in India remains broadly better than other emerging markets across
the globe. Tenants are still occupying space and paying rent, albeit at softer rates. According to
Cushman & Wakefield Research, greater demand from consumers and falling dependency ratios
will provide the basis for growth in India, which in turn will support demand for real estate.
Upcoming Trends in 2009
i. Home buyers will look out for affordable and quality developments in a price-sensitive
market
ii. Township projects with a balanced mix of developments will do better
iii. Companies will base office leasing activities on short-term rather than long-term
expansion plans
iv. The office sector will increasingly turn to subleasing of space
v. Resizing of retail outlets, increasing renegotiations on rentals and even exit from
unviable retail locations will take place
vi. Retail spaces will see conversion into office space for quick revenue returns in certain
micro markets
vii. Consolidation of small-ticket players by bigger, more stable players in the realty sector

What is the need today?

The current economic slowdown is forcing companies across the world to formulate strategies
that will help in surviving the downturn. Falling demand and dropping top lines have necessitated
cost optimisation and a disciplined approach to growth. In such a scenario, real estate, given its
share in the operational/capital expenditure of a company, can contribute significantly to
protecting the bottom line. This can be achieved by making real estate a key part of the overall
business strategy of any company. The drivers of real estate strategies for the foreseeable future
will be operational rightsizing, flexible solutions, long-term blueprints and alignment with
business strategy. Given the current pressures on cost and focus on optimisation, the time for
developers in corporate real estate to act is now. Developers will need to review their overall
portfolio and challenge traditional approaches towards space needs, preferred locations and
lease structures. It will be even more compelling to revisit their real estate strategy for land banks
and other owned real estate assets. A number of innovative approaches may be taken instead of
treating owned real estate as dead asset in this market. Developers should also realise that a
leaner corporate is of more use than a dead one. And any tenant looking for renegotiation or
realignment of space, need not be avoided. Increasing opportunity will have to be created for
smaller space takers too.
However, the biggest volume of real estate lies in the residential segment; and various ancillary

14
 Annual Performance Review
2008-09

sectors (retail, hospitality, etc.) depend on this segment's activities. Predominantly mortgage
dependent end-users are being rendered inactive in the present economic and employment
climate. Developers today need to address affordable housing projects on a pan-India basis,
rather than focus on high-end/luxury residential developments in India's metropolitan cities.
Given the changing landscape, developments with a balanced mix of real estate are likely to do
better than most. Developers also need to recognise the risks attached with land banking and
creating purely speculative developments. To survive the sector now needs to return its focus on
quality, efficiency and delivery.
It is exactly in times such as these that the need for an overall regulatory body, supported by
captains of the industry, becomes important. Various notable efforts have been made by
organizations such as the Confederation of Real Estate Developers of India (CREDAI), NCR
Chapter to mitigate the difficulties faced by real estate developers in the current financial
scenario.
A few significant suggestions put forward by the body in 2008:
• Redefining and encourage affordable housing
• Cheaper and faster funding for real estate projects
• Modified FDI and ECB rules
• Increased funding for the sector from banks, while removing the disparity in risk weight-
age
• Incentives to buy home
• Rescheduling of term loans from institutions
Regional chapters of the CREDAI have also worked towards raising important issues for
the relief of the developer community:
• Addressing approval delays faced by developers (NCR)
• Handling recession in the Hospitality Industry (NCR)
• Revising density norms for development of low cost housing (NCR)
• Development of Infrastructure (NOIDA)
• Stamp Duty relief for smaller plots and flats (Haryana)
• Mixed-land use norms for mega township projects (Punjab)
The need for industry bodies like the CREDAI NCR cannot be emphasized enough in times such as
these. But apart from hosting panel discussions, industry events and common dialogue platforms,
there is also an equally pressing need for rigorous follow-up sessions. These will go a long way in
tracking outcomes and ensuring that recommendations are met by all concerned. The focus to
achieve industry status for Real Estate and regulatory bodies to monitor and chalk a road map for
the sector is much required and efforts from associations such as CREDAI NCR could help us attain
the same.

15
Sustainable Growth in Indian Real Estate
Anshul Jain
DTZ International Property Advisers

“The pain being felt by the real estate sector won't last beyond a year and the India story will
rebound as fast, if not faster than the rate at which it plummeted. “
A DTZ study reveals that of the 212 mn sq. ft of planned Grade-A office space construction across
six major Indian cities, only 88 mn sq. ft. is likely to hit the market by 2010. Average absorption
across these cities is set to reach its lowest point as it will fall by nearly 60% by Q309. Vacancy
levels will reach a threshold high of 40% with the forecasted lower supply and absorption.
The residential sector is also suffering. While rentals have seen a mixed trend, prices on an
overall level have fallen by up to 25% in 2008. In Delhi NCR, prices have fallen considerably in
micro markets like - Gurgaon, Noida, Greater Noida, Ghaziabad and Faridabad, and buyers can
now look forward to some great bargains in the months to come. Mumbai and Bangalore
residential markets tell a similar tale, with prices falling between 25% - 30%. The Mid-income
housing has been the least affected by the current downward trend in prices, and is likely to
emerge as the fastest growing segment amongst private developers as well as investors.
However, the worsening global recession in the US and UK is affecting expansion plans of
corporations resulting in a slower uptake for the Indian property market. A survey done by DTZ on
this trend reveals that 46% of the companies still plan to expand however the pace of expansion
has taken a hit.
While the Indian Government has tried to ease liquidity constraints through a combination of
fiscal and monetary measures in the last few weeks and the announcements made in the Interim
Budget 2009-2010, a stronger and more direct stimulus is required to boost demand.
The following can be done to bring about the much desired momentum in this sector:
·Reducing costs for the end consumer by allowing mass housing to come under Infrastructure
Projects with Public-Private Participation.
·Debt restructuring where the Government along with the banks need to create a more friendly
repayment mechanism in terms of payback time period, so that the developer is left with enough
to plough back into the project.
·Infusing liquidity on two fronts; one by introducing liberal External Commercial Borrowings
(ECB's) to the office segment of real estate in addition to integrated townships, and second by
lending to developers at competitive rates.
·Streamlining tax structure by clarifying STPI tax status as to whether tax benefits will be
extended and if the existing legal structure will allow for shifting of jobs to SEZ's. To reconsider
whether section 80 (I) B, which provides tax holiday for homes less than 1500 sq. ft., can be
introduced for affordable housing.
·Independent regulator to be set up in addition to an Affordable Housing Body to bring greater
transparency and provide planned approach for meeting needs of all stakeholders.

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 Annual Performance Review
2008-09

Outlook
The forecast for commercial offices is that rents would drop sharply in 2009 with an inflexion point
towards the end of 2009, resulting in improving market conditions by 2Q 2010.
By early 2009, we can look forward to residential prices in the high-end segment dropping by upto
35% from their peak levels, and up to a 20 % - 25 % drop in the mid - end segment prices. This is
close to a third from their peak values, which should spur transaction volumes by the second half
of 2009.
The good news is that the falling prices will ease the pressure on real estate prices, thereby
increasing the competitiveness of India on a global business platform. On residential front, the
end users will dominate the market in 2009 with transactional volume expected to increase in 2Q
2009. The mid to long term fundamentals of India remain strong and forecasted 6.5 per cent to 7
per cent GDP growth will be the envy of the world next year.

17
Real Estate Sector Imperatives
Sunil Aggarwal
SARE

All are now familiar with the role that affordable housing and the financing can play to improve
that situation that Real Estate industry is facing today. As an investor and developer with sole
focus on the affordable housing (90% of the real estate industry) the stand taken three years ago
stands vindicated. To look at the glass half full, I am more confident than ever that the real estate
industry will now focus to deliver to the real housing demand and not entirely on the 10%
segment alone. Clearly there is more incentive and little choice to do so. Therefore, 2009 will
therefore be a watershed year when affordable housing will become savvy and interesting to do.
Apart from finance on which a lot has been said I believe that without addressing the following
four issues this opportunity is likely to fall flat on it' s face.
·Technology The industry must collaborate to evolve low cost technologies that enable faster
construction. This will be critical to deliver to the affordable housing segment. Without adopting
new technologies the industry will never be able to cater to the demand in an organized manner.
·Regulated Planning with rational development norms There are either states that have very
liberal density or very rigid density norms. As an industry we need to focus on the quality of
development and evolve a matrix in discussion with the planning authorities that is not overtly
focused on increase of FSI and density alone, but also on the urban design and minimum quality
of life as per the location demands. As an industry we have responsibility to not only build but build
a beautiful India that attracts investments.
·Lobby to force government spending on connectivity and urban infrastructure With government
charging crazy development fees and not delivering, it is and extremely difficult situation for
developers. Affordable housing will remain a dream for government if this issue is not addressed.
In some states there are multiple development charges and permission charges. These must be
rationalized. Developers must not pay if Government does not deliver.
·Do not forget other sectors in real estate We seem to as an industry have bouts of a product
mania. This seems to be affordable housing at this point in time, however we should keep pushing
government to un-lock lands and create regulations and create development environment for
delivery of world class commercial, retail, logistics and hotels. There is a lot that industry had by
way of demand in these sectors, but at this time this seems to have got lost. We must not be
myopic and keep this agenda alive and offer true integrated development to customers and
investors.
If as an industry we can self regulate to evolve structures as above , focus on team building and
execution we will be future ready and ride the next train that will take us to achieve real nirvana.

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 Annual Performance Review
2008-09

Service Tax Issues In Real Estate Sector

R. Muralidharan
PricewaterhouseCoopers Pvt. Ltd.

Real estate sector in India grew steadily till Q1 FY 2008-09. The boom was further driven by
positive indicators in the Indian economy. The real estate sector in India became the fifth world
largest investment destinations globally. The sharp growth in the sector was as a result of the
large investments being made in organised retail sector, road, power and other infrastructure
projects. However, over the past few quarters witnessed drastic changes. The sector which was
growing sharply was severely affected due to the global recession and its impact on the Indian
economy.
In order to protect this sector from further downslide and fuel demand in this sector, the
Government has granted fiscal 'stimulus' by rationalizing interest rates for low cost housing
projects and by reducing service tax rate across board from 12.36% to 10.3% w.e.f. 24 February
2009. The recent clarification issued by the Central Board of Excise and Customs (CBEC) vide
Circular (No. 108/02/2009-ST dated 29 January, 2009) clarifying the Board's view on non
applicability of service tax in a scenario where developer/builder/promoter enters into an
agreement, with the ultimate owner for selling a dwelling unit in a residential complex at any
stage of construction (or even prior to that) and who makes construction linked payment has
provided much needed clarity and acted as a further stimulus for this sector.
While the rationalization of service tax, interest rates and the subject circular are welcome moves,
in that they provide for some relief to this sector, it remains to be seen as to how it will boost the
declining demand of real estate in Indian economy which is more or less dependent on other
major sectors like organized retail, IT among others. Organized retail is usually centered in big
malls that are developed by large developers. In spite of aforesaid dispensations these
developers' are facing issues which are still to be addressed in their entirety by the Government.
One such issue is the effect of the clarification issued by Central Board of Excise and Customs vide
Circular (No. 98/1/2008-ST dated 4-01-2008) wherein it has been clarified that input credit on
construction services is not available as set off against service tax on renting of immovable
property on the ground that credit is available only on goods and services used in or in relation to
manufacture of excisable goods or in providing taxable output services. The outcome of
Construction services is an immovable property which is neither a good nor a service and hence
CENVAT credit is not available in such a situation as per the Circular. This Circular hence might
have gone against the cardinal principles of a VAT regime and results in tax cascading. The
Circular is also not in tune with the CENVAT Credit Rules, 2004 (CCR) for following reasons.
§The 'input services' as defined under Rule 2(l) of CCR can be divided into two parts. The first part
of the definition provides the specific meaning of input service and the second part of definition
provides for the inclusive meaning thereof.
a.The specific part of the definition provides that input service is a service used by a provider of
service for providing a taxable output service. In an existing scenario renting of mall space is a
taxable output service for which construction services are being used as input service. Hence,
there is every reason that CENVAT credit of service tax paid on construction service should be
allowed to the developers against rental income of the immovable properties.

19
 b.The inclusive part of the definition of input service include the services in relation to the setting
up, modernization, renovation or repairs of premises of provider of output service. This part of the
definition categorically talks about eligibility of construction services as input service for any
taxable output service provider.
•Rule 6(5) of the CCR provides that with respect to 16 golden input services full CENVAT credit is
available to taxable service provider even if part of his output services are exempt or non taxable.
Commercial construction service is one of the 16 golden input services and hence construction
services used in providing any taxable output services are eligible for complete CENVAT credit
provided not used exclusively in exempted or non-taxable output services.
The above provisions of the CCR recognize commercial construction service as an eligible input
service for the purposes of taxable output services and the fact that the direct output which
results from construction services is immovable property does not distort the fact that the purpose
of obtaining such construction service is the provision of an output taxable service. Therefore, the
circular issued by CBEC requires an urgent reconsideration.
Another important issue emanates from the introduction of the new taxable service “works
contract service” introduced w.e.f. 1/6/2007. Under this category of taxable service, in relation to
the execution of a works contract, where the contractor is required to pay sales tax/ VAT, then
services rendered against such contracts are leviable to service tax under the works contracts
service category. The service provider also has an option to pay service tax under the composition
scheme for this category of service. The rate of service tax under the composition scheme which
was 2% was increased to 4% w.e.f 1/3/2008. There is lot of uncertainty among the works
contractors as to the date of applicability of the increased rate of tax. The running contracts as on
1/3/2008 should continue to be taxed at 2% though the services continue to be rendered after
that date. To remove these doubts and clear the confusion in the minds of assesses, Government
needs to issue a circular clearly clarifying the situation under which the enhanced service tax rate
of 4% would apply. Another related issue is that consequent to the reduction of service tax rates
from 12.36% to 10.30% w.e.f. 24 February 2009 the rates of service tax applicable for the
composition scheme would require a review.
The above discussion highlights the main service tax issues in the real estate sector. There are
several other issues which affect the service provider in this sector. It is necessary that the
Government of India engages with the industry and resolve the outstanding issues so that there is
clarity on the applicability of the service taxes which would facilitate better compliance and bring
in the required certainty.

20
CREDAI Initiatives
 Annual Performance Review
2008-09

Major Initiatives of CREDAI

This section highlights the efforts of CREDAI over the last year to mitigate business issues faced
by Real Estate Developers. CREDAI delegation had met Shri P. Chidambaram, Hon'ble
Finance Minister, Shri Ashwani Kumar, Minister of State for Industry and Shri
Amitabh Verma, Jt. Secretary (Banking) on 12 November 2008. Shri T.K.A. Nair,
Principal Secretary to Hon'ble Prime Minister of India met this delegation on 14 November
2008. Appointments with Shri P. Chidambaram, Hon'ble Finance Minister, Shri Amitabh
Verma, Jt. Secretary (Banking) and Shri T.K.A. Nair, Principal Secretary to Hon'ble
Prime Minister were facilitated by Shri Prakash Challa, Shri Pradeep Jain and Shri Abdul
Azeez and Shri Rafi Mather, respectively. The CREDAI delegation consisted of Shri Kumar
Gera, Shri Rajni Ajmera, Shri Ramani Sastri, Shri Lalit Kumar Jain, Shri Pradeep Jain
and Shri G P Savlani for the meeting on 12 November 2008; and Shri Santosh Rungta, Shri
Abdul Azeez, Shri Rafi Mather, Shri Pradeep Jain, Shri Getamber Anand and Shri G P
Savlani for 14 November 2008 meeting. The following suggestions have been forwarded to
appropriate authorities in the government:
I. Redefine and encourage affordable housing: The proposed definition of affordable
housing from the CREDAI delegation is-“Any accommodation less than 80 sq.mtr. and
projects having tenement density of more than 250 per hectare. Also, it should allow
benefits at par with SEZ to such schemes and have no FSI constraints for such projects.
Such projects are to be treated on priority basis for lending”.
II. Cheaper and faster funding for real estate projects: Housing finance should be
considered with revised eligibility norms
III. Modified FDI and ECB rules: FDI rules and ECB rules be modified to encourage
investment in affordable housing. The upper limit of 50,000 sq.mts./25 acres should be
relaxed for this sector. The slum redevelopment projects and other affordable housing
projects irrespective of size may also be considered similarly
IV. ECB borrowings to be permitted in housing construction particularly for

completion of all ongoing projects which already has

equity investments in the form of FDI. ECB or FDI in
housing construction unlike the stock markets are more
long term with average tenure of 3-7 years in tune with
the life cycle of the projects. This source will be
supplemental to the funds from banks and financial
institutions and in the long term will reduce the cost of
finance and thereby the price of housing in the country
V. Banking and Finance: Roll-over provision for loans:
Policy for rescheduling of term/construction loans to
facilitate roll over of existing loans. The NPA norms to be
modified to allow this accommodation by the banks,

23
 housing finance institutions and financial institutions
VI. Increased funding: Banks should be encouraged to fund the developers with fresh
infusion of funds to enable the developers to complete the ongoing projects. This should
be done on a priority basis
VII. Remove the disparity in risk weights: Risk weight assigned to Real Estate projects
should be reduced at par with manufacturing industry for the purpose of credit-disbursal
by banks.
VIII.Facilitate land availability: When land is purchased in an auction/bidding from
Government/Municipal authorities, banks should finance the project cost including land.
IX. Revised priority sector loan limit: Banks and HFIs are enjoying certain concessions
on loans up to 20 lacs which have been classified as priority sector loans. With the rising
inflation and the urgent requirement of credit in the housing sector this norm needs to be
revised upwards to at least Rs. 35 lacs/customer loan.
X. Foreign ownership rule: Consider the feasibility of permitting pre-approved
foreigners from a certain list of countries to own a house in India just as Indians can
today buy houses abroad.
XI. Incentives to buy home: Consider incentives for buyers of homes such as raising
limits for interest deduction from income, incentives for investment to increase the rental
housing stock etc., these could be for a 2-3 year period only till this slow down exists.
XII. Rescheduling of term loans from institutions: The slow down has forced majority
of developers to apply to their respective financial institutions for deferment of their
credit lines. However the present RBI policy to treat this deferment by the banks and
housing finance institutions (HFIs) as NPAs is preventing them from accommodating this
need of the industry. This, if uncorrected, will lead to unnecessary litigation on
defaulting developers and consequently the customers who have invested their hard
earned money will be deprived of their dream houses.
XIII.NPA norms to be reviewed
XIV. Housing sector should be accorded Infrastructure/Priority sector status
XV. Margin Money Contribution: Margin Money Contribution by home loan buyers is now
increased to 30 % which should be 15 % only

24
 Annual Performance Review
2008-09

Members of the 'Apex Group'

Apex Group of Ministers consists of Hon'ble Finance Minister, Shri P. Chidambaram,
Hon'ble Minister of Commerce and Industry, Shri Kamal Nath, Deputy Chairman,
Planning Commission, Shri Montek Singh Ahluwalia and Governor, Reserve Bank of
India, Dr. D. Subba Rao.
Apex Group of Secretaries consist of Shri Arun Ramanathan, Secretary (Finance), Shri Gopal
K. Pillai, Secretary (Commerce), Shri Ajay Shankar, Secretary (Industry), Dr. Subas Pani,
Secretary (Planning Commission), Shri Amitabh Verma, Jt. Secretary (Banking)
The Government / RBI have already taken some steps in the form of fiscal and monetary measures
and many more favourable measures in near future are expected. CREDAI is in constant touch with
various Government Authorities and would meet other Ministers /Policy Makers/ Reserve Bank
Governor and officials concerned in order to resolve the issues of the real estate sector.

Draft EIA Amendment Notification 2009

The Ministry of Environment and Forests, had issued the EIA Notification on 14 September, 2006
requiring that construction of new projects or activities or the expansion or modernization of
existing projects entailing change in process or product mix (for activities listed in the Schedule)
shall need prior environmental clearance from the Central Government or the State level
Environmental Impact Assessment Authority depending on the project. Amendment to the EIA
Notification of 2006 was proposed on 19 January, 2009 and the draft has been placed in the
official Gazette inviting objections and comments from those persons likely to be affected.
CREDAI has been relentlessly following up this matter with concerned Ministries including the
PMO since May 2008. In November 2008, the PMO had informed CREDAI that discussions with the
Ministry of Environment and Forests in this regard had taken place and the later would take
necessary action. Since then CREDAI followed up with the Ministry of Environment and Forests.
A meeting with Shri J.M. Mauskar, Additional Secretary, Ministry of Environment and Forests with

the CREDAI was held, details of which are given below :

• The Additional Secretary conveyed that some
Government Departments and NGOs are against
the proposed increased threshold limit from
20000 sq. metres to 50000 sq. metres. Any
suggestion in this matter should be supported by
facts and figures and sound reasoning.
• According to him with the increase in threshold
limit 90 % of the construction projects would be
out of the purview of Environment Impact
Assessment (EIA).
• He also advised that there should be five
alternate suggestions instead of a single
suggestion as was submitted to the PMO.
25
Proposed amendments by
Ministry of Environment and Forests
S.O. 195 (E) dated 19 January 2009 issued by Ministry of Environment and Forests proposed to
make certain amendments and inviting objections / suggestions on the proposals contained in the
Draft Notifications within a period of 60 days i.e., by 18 March 2009. Salient points of the
amendment are as follows:
(Xvii) Against item 8 (a), in column (4), for the entry, the following entry shall be substituted,
namely: “= 50000 sq. metres and 1, 50,000 sq. metres. of built-up area”;
(xviii) Against item 8 (b), in column (4), for the entry “= 50 ha”, Substitute the entry “= 100
ha.”;
(xix) after the Schedule, in the 'Note' for sub-heading relating to 'General Condition (GC)', the
following shall be substituted, namely :-
“Any project or activity specified in Category 'B' will be treated as Category 'A', if located in whole
or in part within 10 km from the boundary of : (i) Protected areas notified under the Wildlife
(Protection) Act, 1972; (ii) Critically polluted areas as notified by the Central Pollution Control
Board from time to time; (iii) Eco-sensitive areas as notified under section 3 of the Environment
(Protection) Act, 1986, such as, Mahabaleshwar Panchgani, Matheran, Pachmarhi, Dahanu, Doon
Valley, etc., and (iv) inter-State boundaries and international boundaries :
Provided that the requirement regarding distance of 10 Km of the inter-State boundaries can be
reduced or completely done away with by an agreement between the respective States or U.Ts.
sharing the common boundary.

Proposed Real Estate Regulation Bill

CREDAI has also actively advocated for the Real estate Regulation Bill over the last year. The need
for the regulation and the exceptions are listed below:
Rationale:
I. To prohibit fraudulent and unfair trade practices relating to real estate market
II. To protect the interests of end buyers and investors in real estate market and to promote
the development of and to regulate the real estate market
III. To discourage the unscrupulous players from entering the real estate sector
IV. Real estate development industry is fragmented and there is no pre-qualification,
resulting into entry of fly by night operators in the sector
V. Developer while selling his project usually promises a number of things to his buyers. But
some times, he might not be able to deliver those things on time because of changes in
the law or delay in getting statutory permission. Genuine builders can seek redressal
form compensation claims from the buyer
VI. Real estate is considered to be opaque and it is said that builders often break the

26
 Annual Performance Review
2008-09

promises they make to gullible buyers

VII.Besides making the housing sector more transparent it would curb the flood of long-
drawn litigation that usually follows complaints from buyers
It is felt that the regulator for this sector would in be in the interests of the growth of both the
industry members and the consumers. In order to maximise the common benefit following issues
needs to be taken care of:
Reservations
Developers can not be asked to swim with their hands tied. The process of statutory clearances
must be a time based “deemed” event along with a single window system. All processes must be
made online to keep a track of interactions/transactions with various government agencies to
improve transparency
• Comprehensive reform that enables greater supply of housing would be more effective in
making houses affordable than the fiat of a regulator
• Formation of a regulatory body should not end up creating another layer of controls and
licensing, which would promote corruption
• If the regulator is not on the lines of SEBI for financial markets and IRDA for the
insurance sector, it would circumvent the whole issue
• A regulatory body for housing should not be composed of bureaucrats but of urban
planners and representatives from developers association and civil society
• Regulator should not add another layer of bureaucracy
• Land markets are horribly distorted in India and floor-area norms are very conservative
• Procedures and processes for land acquisition and conversion of agricultural land for
urban use are very complex
• To reduce property prices and make them more affordable for the average home buyer,
restrictive land use norms should be removed and urban amenities as well as the
administration of land records should be improved

Salient points of the proposed

regulation
I. Builders should be required to file papers
describing fully their upcoming projects
and obtain a time-bound clearance
(deemed), with a 30 days limit, of the
regulator before advertising them
II. Regulator should have powers to take
developers as well as the government to
task if either of them doesn't deliver within
the time schedule for every activity,
including statutory clearances. It must

27
 ensure a level playing field for the developers
III. Property dealers / brokers / agents must also be covered. No property broker, sub-
broker, agent and such other intermediary who may be associated with real estate
market shall facilitate buying, selling or dealing in real estate except under, and in
accordance with, the conditions of a certificate of registration obtained from the
Regulator
IV. Consultancy firms like Knight Frank, Cushman and Wakefield, Jones Lang Lasalle
Meghraj, CB Richard Ellis, etc must also be brought under it to make them liable to
investors
V. Powers of the regulator need to be carefully and precisely defined. It shouldn't get into
areas such as fixing prices of houses or whether they are for rent only rather than sale
VI. There should not be any discretionary power in the hands of the regulator as it would
only set up more points for corruption
VII. Regulator should not have any control over the financial issues pertaining to any real
estate project
VIII. All members (including spouses and dependent children) of the regulator body must
declare their personal assets every year as on 31st of March within one month i.e. by
30th of April
IX. Development Authorities and Housing Development Boards should also come under the
purview of Regulator
X. Penalty provisions for the developer for any delay in handing over possession of the
property to the buyer
XI. Penalty provisions for the government agency for any delay in granting a time bound
sanction/ clearance to the developer. Impact in quantitative terms should be equal for
both the developer as well as the government agency
XII. Any rejection of application from the developer regarding any clearance from the
government agency, must be backed by a lawful and valid order by the government
employee and the same should be personally held responsible for any misdeed
XIII. Some lending institutions (banks, housing finance companies) take advantage of
vulnerable borrowers by charging extremely high interest rates and loan fees, use
aggressive sales tactics to steer consumers into unnecessarily expensive loan products,
and advertise very low "teaser rates" that steeply increase after two or three years.
Abusive loans lead to higher foreclosures, increased vacancy rates, lower home values,
and community deterioration, which erodes confidence in the nation's housing system.
Loans should have a reasonable debt-to-income ratio and an escrow for taxes and
insurance. Borrowers should have a reasonable choice of mortgages priced to reflect the
borrower's creditworthiness. Lending agencies should also be covered under the ambit
of regulator
XIV. Calling for information and record from any bank or any other authority or board or
corporation established or constituted by or under any Central, State or Provincial Act in

28
 Annual Performance Review
2008-09

respect of any transaction in real estate which is under investigation or inquiry by the
Regulator
XV. Summoning and enforcing the attendance of persons including government officials and
examining them on oath
XVI. Inspection of any books, registers and other documents of any developer, government
agency, broker/agent or a consulting company
XVII. Relevant records and annual statement of accounts of the Regulator should be audited
by the Comptroller and Auditor- General of India at regular intervals

Clarification on Applicability of Service Tax

Owing to the ambiguity and confusion about service tax applicability to the Construction of
Residential Complex [as defined under Section 65 (105) of the Finance Act], the developers were
experiencing escalating transaction costs. This was over and above the lack of liquidity in the
Indian market due to the credit crisis. After sustained efforts of the CREDAI in this regard, a
clarification was announced by the Government vide circular.

Salient Features of the clarification:

Construction of residential complex was brought under service tax w.e.f. from 01.06.2005. Doubts
arose regarding applicability of service tax in a case where developer / builder/promoter enters into
an agreement, with, the ultimate owner for selling a dwelling unit in a residential complex at any
stage of construction (or even pd.@ to that) and who makes construction linked payment. The
'Construction of Complex' service has been defined under Section 65 (105) of the Finance Act as "any
service provided or to be provided to any person, by any other person, in relation to construction, of a
complex". The `Construction of Complex' includes construction of a 'new residential complex'. For
this purpose, 'residential complex' means any, complex of a building or buildings, having more than
twelve residential units. A complex constructed by a person directly engaging any other person for
designing or planning of the layout, and the construction of such complex intended for personal use
as residence by such person has been excluded from the ambit of service tax.
A view has been expressed that once an agreement of sale is entered into with the buyer for a unit
in a residential complex, he becomes the owner of
the residential unit and subsequently the builder for
construction of residential unit is a service of
'construction of residential complex' to the
customer and hence service tax would be applicable
to it. A contrary view has been expressed arguing
that where a buyer makes construction linked
payment after en' ring into agreement to sell, the
nature of transaction is not a service part that of a
sale, Where a buyer enters into an agreement to get

29
 a fully constructed residential unit, the transaction of sale is completed, only after complete
construction of the residential unit. 'MI the Completion of the construction activity, the property
belongs to the builder or promoter and any service provided by him towards consumption is in the
nature of self service. It has also been argued that on if it is taken that service is provided to the
customer, a single residential unit bought by the individual customer would not fall in the
definition of `residential complex' as defined for the purposes of levy of service tax and hence
construction of it would not attract service tax,
The matter has been examined by the Board. Generally, the initial agreement between the
promoters / builders / developers and the ultimate owner is in the nature of 'agreement to sell'.
Such a case, as per, the provisions of the Transfer of Property Act, does net by itself create any
interest in or charge on such property. The property remains under the ownership of the seller (in
the instant case, the promoters/ builders/developers). It is only after the completion of the
construction and full payment of the agreed sum that a sale deed is executed and only then the
ownership of the property gets transferred to the ultimate owner. Therefore, any service provided
by such seller in 'connection with the construction of residential complex till the execution: of such
sale deed would be in the nature of `self service' and consequently would not attract service tax.
tether, if the ultimate owner enters into a contract for construction of a residential complex with a.
promoter / builder / developer, who himself provides service of design, planning and construction;
and. after such constr4ctiort the ultimate owner receives such property for his personal use, then
such activity would not be subjected to service tax, because this case would fall under the
exclusion provided in the definition of 'residential complex'. However, in both these situations, if
services of any person like contractor, designer or a similar service provider are received, then
such a person would be liable to pay service tax. All pending cases may be disposed of accordingly.

Initiatives with NSDC

CREDAI took initiatives over the last year for a thorough interaction among the BoD members
within NSDC. An overall summary of deliberations / discussions the BoD of NSDC had during the
Board level meetings till date:
4 BoD meetings have taken place so far
Representatives from 7 national level associations representing various sectors (such as CREDAI,
CITI, CII, FICCI, ASSOCHAM, SIAM and GJEPC) are on the Board
National Skill Development Trust (NSDT) has been formed with an initial corpus of Rs995.10cr. &
the Chairman of NSDC is one of the Trustees.
NSDT shall be collecting and utilizing the funds of the Trust for the defined purposes and shall
implement programmes through the instrumentality of NSDC to fulfil the objectives of the Trust.
NSDT shall act as custodian of the funds received from the contributors, and shall regulate the
utilization of the funds received from the Contributors and the manner in which the same shall be
utilized.
NSDC has entered into Investment Management Agreement(s) with NSDC for utilization of the
30
 Annual Performance Review
2008-09

corpus of the Trust to meet the desired objectives of National Skill Development Mission and
encourage skill development in the country.
Outside consultants who could help the Company design Strategy, Structure and Processes and
prepare concrete course of actions to achieve its objectives shall be engaged by NSDC.
Discussion on the reports submitted by each sector representatives on the number of present
skilled workers, their existing skills level, the deficiencies in the skills and the extent of required
up-gradation of the skills and a road map to achieve the mission of skill up-gradation programmes
in such industries have happened.
Also discussed was the need for an agency like ICRA which could help the Company to assess,
synchronize and evaluate these write-ups, proposals to figure out the exact numbers of the skilled
workforce required at present and also in the future. This is being pursued.
Stress was given on developing business model / business propositions which could attract the
business class/industries/entrepreneurs to undertake themselves in skill up-gradation programs,
training missions for the unskilled and semi skilled youths and resolve the migration related issues
of work force.
In order to promote the Public Private Partnership (PPP) model to achieve the skills development
mission, more and more participation and involvement of potential & interested firms, agencies,
individuals, NGOs etc is to be encouraged. NSDC has received a proposal from a private business
organization for viability gap funding of about Rs 30cr in order to set up a national infrastructure of
100 National Apprenticeship Centres (NACs) across India. This proposal is under active
consideration.

Interactive Session with the IBA

CREDAI representatives had met with the Chairman of the Indian Banking Association (IBA), Mr
Narayanswami over the lack of funds for the real estate projects. He requested CREDAI to submit
a proposal addressing the issues faced by the developers.
Other matters discussed includes whether Banks would be able to recover the credit amount in
contemporary scenario of uncertainty, how much time market would require to revive and what
has been the track record of the developers in terms of repayment of loans. There is a threat of
accounts going NPA if cash flows do not support repayment. The possibility of developer availing
loans, chances selling at lowers than market price if land was purchased at a higher rate were also
deliberated and whether there are any instances of diversion of funds by the developers.
Mr Lalit Jain, Nainesh Shah, Dharmesh Jain and Rohit Raj Modi from NCR attended this meeting.

31
CREDAI NCR Initiatives
 Annual Performance Review
2008-09

Major Initiatives of CREDAI NCR

Delhi Region
Delhi got statehood about a decade ago and since then formulated a well
planned strategy for development with limited resources. Delhi
Development Authority (DDA), the agency looking after development of
infrastructure in Delhi owns technically vacant land areas in the city. DDA
and the real estate developers who are members of CREDAI NCR undertook
many real estate and infrastructure projects in the city. This is line with the
policy of long term development in the city and also to prepare for the 2010
'Commonwealth Games' hosted by the city. The credit crisis in 2008 brought
immense woes to the real estate development business. Banks had virtually
stopped lending to the real estate development projects that has taken a toll
on the progress of ongoing projects as the requirement for working capital
dried up. In this regard, CREDAI NCR members had submitted a
representation with the DDA to relax deadlines for completion of many
current projects.
A sub-committee for address Delhi related real estate
development issues were formed, the members of whom are:
1)Mr Pankaj Bajaj - (MD, ELDECO) Email- pankaj@eldecoproperties.com
2) Mr Ajay Chandra - (MD, UNITECH) Email- Ajay.chandra@unitechgroup.com
3) Mr Ashok Solomon - (MD, CHINTELS INDIA LTD.) Email-ashok@chintels.com
4) Mr Raj Singh Ghelot - (Chairman, Ambience LTD.) E-mail- ambience@ndf.vsnl.net.in
5) Mr Rajeev Talwar - (Group Executive Director, DLF LTD.) E-mail- talwar-rajeev@dlfgroup.in
6) Mr Manish Uppal - (MD, Uppal Ltd.) E-mail- info@uppal.co.in
7) Navin K Raheja - (Chairman, Raheja Developers) E-mail- nayanraheja@rahejabuilders.com
President CREDAI NCR and Hon. Secretary automatically becomes member of the committee.
In a meeting with the DDA on 22 December, 2008, CREDAI NCR raised certain issues affecting the
developer community. Major issues affecting real estate development sector in NCR have been
listed below:
• Approval Delays
• Possession Issues
• Funding Problems
• Recession in Hospitality Industry CREDAI NCR requested the DDA to consider
extension of the deadline for completion of projects by at least 3 years; also, some kind
of financial incentive was sought for the real estate developers for early completion
(within the next 2 years) to compensate for high costs of funding amidst adverse
business conditions.

35
Ghaziabad Region
Ghaziabad is growing in terms of both residential and
industrial townships. Considering the level of
development that is taking place, to maintain a
sustainable level of demand in this area, CREDAI NCR
has taken up this issue with the Government and is
expecting positive outcome. Members of CREDAI NCR
from Ghaziabad faced many problems particularly due
to the credit crisis. These issues were taken up with the
Hon'ble Chief Minister of UP, Ms Mayawati, and a
representation was submitted on behalf of the CREDAI
NCR members to the UP Chief Minister on 2 January,
2009. Local issues in Ghaziabad were also raised with
the local-level authority, the Ghaziabad development
authority (GDA). CREDAI NCR held intensive
discussions with the GDA on 31 December, 2008. A representation was submitted to the Vice
Chairman, to resolve the problems faced by the developer community in terms of executing
current projects. A committee was formed to look into the areas where CREDAI NCR would
engage with the authorities and a committee was formed in this regard.
Sub- Committee for Ghaziabad related issues
1) Mr. Anil Sharma - (Chairman Amrapali Ltd.) Email- a.k.sharma@amrapali.in
2) Mr Manoj Gaur Gaursons - (MD, Gaursons Ltd.) Email-manojgaur14@yahoo.com
3) Mr Amit Jain - (MD Mahagun India (P) Ltd.) E-mail- amitjain@mahagunindia.com
4) Mr R K Arora - (MD Supertech Ltd.) Email- rka@supertechlimited.com
5) Mr Sanjeev Srivastava - (MD Assotech Ltd.) Email- sanjeevsrivastva@assotechlimited.com
6) Mr Sanjeev Aeren - (Vice President North CREDAI, GCB member CREDAI NCR) (MD, AEZ
Group) Email- sanjeevaeren@aezindia.net
7) Mr Manu Garg - (MD Land Craft Developers PVT Ltd.) Email- director@landcraft.in
President CREDAI NCR & Hon. Secretary automatically qualify as members of this committee.
UP has given a stamp duty rebate till December 31 2008, from 8% to 5%. CREDAI NCR has
requested the state Chief Minister to extend this scheme by a year so that demand of housing
does not shrink further.

36
 Annual Performance Review
2008-09

Noida and Greater Noida Region

Real estate development has contributed substantially to the
growth of Noida and Greater Noida region over the last few
years. Subsequently, government revenues rose enormously
over this period. The credit crisis as well as certain policy
related issues faced by CREDAI NCR members from this region
was raised with the GNIDA. A representation was submitted to
the GNIDA on 25 November, 2008. Also a representation was
submitted to the Noida Authority on 11 November, 2008. A sub
committee was formed which drafted the agenda for the
meeting with the authority based on feedback provided by the
members.
Members of the Sub Committee for Noida and Greater
Noida related issues:
1) Mr. Anil Sharma - (Chairman Amrapali Ltd.) Email- a.k.sharma@amrapali.in
2) Mr Pankaj Bajaj - (MD,ELDECO) Email- pankaj@eldecoproperties.com
3) Mr Rohtas Goel - (Chairman Omaxe Ltd.) Email- rohtas@omaxe.com
4) Mr Geetamber Anand - (MD, ATS Infrastructure Ltd.) E-mail- getamber@atsgreens.com
5) Mr Kabul Chawla - (MD BPTP Ltd.) E-mail- kabul.chawla@bptp.com
6) Mr Sanjeev Srivastava - (MD Assotech Ltd.) Email- sanjeevsrivastva@assotechlimited.com
7) Mr Pranav Ansal - (MD, Ansal API Ltd.) E-mail- pranav@ansalapi.com
President CREDAI NCR & Hon. Secretary automatically qualify as a member of the committee.
On 2 January, 2009, a meeting was held with the CEO of GNIDA on issues impacting developers in
Greater NOIDA. Major issues impacting Real estate development in the state and affecting the
developer community have been listed below:
• Waiver of Interest:
• Moratorium of payments:
• Possession of land:
• Extension of completion time:
• Density norms:
• Airport NOC:
• Pollution NOC:
Greater Noida is growing in terms of both residential and Industrial Township. Considering the
level of development that is taking place the demand for these areas is infrastructure which has
been successfully taken up by CREDAI NCR with the local authority, GNIDA, and positive results
have started showing. GNIDA, is actively trying to facilitate the changes in policies that need to be
brought about the help facilitate the projects that have been taken up by the Real estate
community.
37
 In the representation which was submitted to the CEO, it was highlighted that Real estate
development in Noida was under stress and the authority had to take active steps which would
lead to enhanced development in the satellite township:
• Waiver of Interest:
• Moratorium of payments:
• Possession of land:
• Development of Infrastructure:
• Restoration of civic order:
Different government orders that were passed for the Noida and the Greater Noida region in
response to the advocacy efforts of the CREDAI NCR to redress the issues faced by the real estate
developers from these regions are as follows:
(A) Government Order No 01/77/4/09/142 N/08 dated 06.01.2009 (Audyogic Vikas
Anubhag-4)
Applicable on other Industrial Development Authorities and Awas Vikas Pradhikaran; Not
applicable on Yamuna Expressway & UP Expressways Industrial Development Authorities
Eligibility Norms:
i. Defaulters unable to pay instalments
ii. Application before 30.06.2009 to concerned Authority
iii. Only those who have tried their best to execute
iv. Board of concerned Authority shall have the power to make necessary amendments
Options before defaulter:
• Either Executes his project
• Exits from his project and surrenders
Facilities
i. Capitalisation of interest & penalty on the default amount including future principal
component
ii. Six monthly payments of capitalised instalments
iii. First six-monthly instalments dedicated to interests and second six-monthly instalments
dedicated to principal amount and Interest
iv. Payment period of rescheduled plan shall not exceed twice the period as in original
allotment
v. All calculations to be done from the date of allotment
vi. Rescheduled instalments period shall not exceed 10 years period from the date of
allotment
vii. Any default in rescheduled plan shall attract a penal interest at a rate of 3%
Defaulter opting Exit Clause
i. 10% of the amount against total premium paid shall be deducted and land worth 90% of
the paid premium shall be returned (from the allotted land) to the defaulter

38
 Annual Performance Review
2008-09

ii. Any charges paid against stamp duty, lease rent, processing fees, penal interest, transfer
charges, re-establishment charges or any other statutory charges shall or amount paid
against levied penalty shall not be refunded
iii. Unpaid amount on account of head mentioned under 'ii' shall not be deducted from the
90% value
iv. Any construction/ development on the part of land going back to the Authority/ Board
shall be considered of zero value
v. Calculation of land area returned back to the defaulter shall be done at higher of
allotment rate or current market rate

39
Haryana Region
The colonizers have been raising the issues relating to the recovery of External
Development Charges (EDC), duration of licence period, renewal of licence and
density issues related to Gurgaon-Manesar Urban Complex. The CREDAI i.e. the
Apex Body of the real estate developers and other colonizers have also
submitted representation on these issues to the Government. These issues
have been discussed at the highest level on 18.11.2008 at 3-00 PM with Hon'ble
Chief Minister, Haryana. The Hon'ble Chief Minister, Haryana had constituted a
committee comprising of FCTCP, C.I., DTCP and CA, HUDA to examine the issues
raised by the colonizers. The Committee discussed these issues m an informal
meeting held on 8.12 2008. The Financial Commissioner and Principal Secretary
to Government Haryana Town & Country Planning Department also held a
meeting with the representatives of the colonizers on 2.1.09 at Panchkula for
discussion on their demands and to ascertain their views. In order to give final
shape to the decision, a meeting was held on 10.1.2009 at 5-00 PM at Haryana
Bhawan, New Delhi under the Chairmanship of Hon'ble Chief Minister, Haryana.
A detailed memorandum was submitted to the Chief Minister of Haryana, Shri
Bhupinder Singh Hooda, in a meeting held on the 10th of January 2009
regarding the issues faced by the developer community in the state of Haryana. This was
based on the follow ups of major issues which had been highlighted by CREDAI NCR in
separate letters submitted to the Director, Town and Country Planning Dept., in its office memo
dated, 31st December 2008. This memo was based on the major charges that were
incorporated in calculations of EDC charges in the townships of Sonepat, Gurgaon and Rohtak.
Sub- Committee for Haryana Related issues .
1) Mr Lalit Goyal - (MD IREO.) Email- lalit.goyal@ireo.in
2) Mr Pankaj Bajaj - (MD , ELDECO) Email- pankaj@eldecoproperties.com
3) Mr Anil Bhalla - (MD . Vatika Ltd.) E-mail- anilbhalla@vatikagroup.com
4) Mr Laxmi Goyal - (Chairman , Suncity Project Ltd)
5) Mr Kabul Chawla - (MD BPTP Ltd.) E-mail- kabul.chawla@bptp.com
6) Mr Kamal Taneja - (MD TDI Infrastructure Ltd.) E-mail- kamal.taneja@tdigroup.net
7) Mr Pranav Ansal - (MD, Ansal API Ltd.) E-mail- pranav@ansalapi.com
8) Mr Navin K Raheja - (Chairman , Raheja Developers) E-mail- n_raheja@rediffmail.com
9) Mr Vinay Mittal - (Executive President - Coordination, Emaar MGF Land Ltd.)
E-mail- Vinay.Mittal@emaarmgf.com
President CREDAI NCR & Hon. Secretary is automatically member of the committee.
Pursuant to these memoranda these issues were discussed in the meeting with the Principal
Secretary to the Chief Minister. Major issues impacting Real estate development in the state
and affecting the developer community have been listed below:
• Issue Concerning EDC Payment
• Renewal of License every 2 years and rate of renewal

40
 Annual Performance Review
2008-09

• License Fee
• Present Density Norms
• Acquisition of Land
• Pollution Control Board Notices
• Stamp Duty
• EDC Calculation

41
Punjab Region
Due to liquidity crunch as elsewhere in the Globe and in India, the Real
Estate Developers in the State of Punjab are also facing serious problems in
execution of their ongoing projects on time and also starting the new ones.
Though the Developers have good track record in execution of variety of
projects, which in the past greatly contributed to the growth of the nation
yet they are unable to perform now because of the global melt-down. The
various projects under execution by the Real Estate Developers in Punjab
are as under, which shall contribute amongst other things, the following :-
1. 50,000 houses under planning and construction across various
income categories including lower income groups.
2. 1,00,000 jobs in various segments like construction, retail,
hospitality and allied services.
3. Organized and Planned urbanization of major cities of Punjab.
In view of the above, the Govt. of Punjab, while recognizing Real Estate

Developers as joint stake holders in the well being and progress of Punjab, will conduct an urgent
review of its policies to ensure continuity in development across the State.
In order to take up various matters related to the Real Estate Developers in the State and to
closely monitor the action, the CREDAI NCR has formed a Sub- Committee for Punjab Related
Issues, as under.
Sub- Committee for Punjab Related issues
1) Mr. Rohtas Goel - ( Chairman Omaxe Ltd. ) Email- rohtas@omaxe.com
2) Mr Pankaj Bajaj - ( MD , ELDECO ) Email- pankaj@eldecoproperties.com
3) Dr Rajesh Aeren - ( GCB Member CREDAI NCR) ( VC , AerenR ) Email- rajeshaeren@aerenr.com
4) Mr Geetamber Anand - ( MD , ATS Infrastructure ) E-mail- getamber@atsgreens.com
5) Mr Kamal Taneja - ( MD , TDI ) E-mail- kamal.taneja@tdigroup.net
6) Mr Mohit Singh - ( MD Shipra Estates Ltd. ) Email- mohitsingh@shipraworld.com
7) Mr Pranav Ansal - ( MD, Ansal API Ltd. ) E-mail- pranav@ansalapi.com
8) Mr Parminder Singh Sehgal - (Executive President, Emaar MGF Land Ltd.)
E-mail- parminder.sehgal@emaarmgf.com
President CREDAI NCR & Hon. Secretary is automatically member of the committee.
Initiatives taken up by CREDAI NCR for its members in Punjab
Initially CREDAI NCR had taken up various issues concerning the State vide our letter dated 8th
December, 2008 to the Hon'ble Chief Minister and met the authorities thru a delegation on 12th
December, 2008. The delegation had a very fruitful talk with the authority.
With our continuous effort we have also organised a meeting with Shri Sukhbir Singh, Hon'ble Dy.
CM Punjab on 13th Feb 2008 and we hope that a fruitful result will come up.
A detailed memorandum was submitted to the Chief Minister of Punjab, regarding the issues
faced by the developer community in the state of Punjab. Major issues impacting Real estate
42
 Annual Performance Review
2008-09

development in the state and affecting the developer community have been listed below:
• EDC issues:
• EWS issues:
• Mixed Land Use:
• Public and Community Sites/Buildings:
CREDAI NCR appreciate the various initiatives taken by the Government of Punjab after our
meeting on 13th Feb 09 at New Delhi , with the view to attract investments, generate employment
and also for the welfare of the state.

43
CREDAI NCR Quarterly Newsletter
CREDAI NCR regularly publishes a newsletter
covering news on the CREDAI NCR activities
in the preceding Quarter. All upcoming
programmes of CREDAI NCR are posted on it.
The newsletter while focussing on the real
estate sector developments in the Delhi NCR
and the adjoining areas like Punjab,
Rajasthan etc., also tracks pan India
developments in the real estate sector.
Important legal updates impacting the real
estate development business are also a part
of the newsletter. Newer regulations,
notifications, announcement for the real
estate development and the allied sectors are
included here. In a nutshell, the broader
objective of the CREDAI NCR Quarterly
Newsletter is to communicate with the outer
world and sensitise the stakeholders on
CREDAI NCR's position on various business
issues impacting the sector.

44
Policy Advocacy
 Annual Performance Review
2008-09

CREDAI NCR takes up Tax Issues impacting

Real Estate Sector
Date & Time: Thursday 10 April 2008 at 7.15 PM
Venue: Ranaq Hall PHD Chamber of Commerce and Industry, New Delhi
Speakers: Mr R Muralidharan, Associate Director in PricewaterhouseCoopers Pvt. Ltd
Mr Ashutosh Chaturvedi Executive Director in PricewaterhouseCoopers Pvt. Ltd

Workshop discuss measures to counter tax burden of the sector

Driven by the booming Indian economy, the real estate sector in India is on a high growth
trajectory. India has emerged as the fifth largest investment destinations globally in this sector.
The construction industry in India is the second largest contributor to the GDP (Gross Domestic
Product) after agriculture. The real estate industry in India is expected to grow to US$ 90 billion by
2015. Sharp growth in this industry can be attributed to large investments in the infrastructure
sector mainly in the road and power sectors.
CREDAI NCR has gone a long way towards a meaningful contribution towards improving the social
and economic infrastructure of the country. The NCR (National Capital Region) chapter of
CREDAI, CREDAI NCR now covers more than 80 per cent of the real estate development
businesses in the region. CREDAI NCR is a leading platform for addressing the problems of real
estate developers of NCR.
The CREDAI NCR President, Mr. Pradeep Jain said, “… the announcements made in the Union Budget
2008-09 are indicative of the developments expected. The budget however is yet to address the
much awaited demand for industry status to the real estate sector in India. CREDAI NCR has
submitted views and suggestions on this issue to the Ministry of Finance through various forums and
will continue to pursue them with the government on behalf of the industry.”
He further said that the spiralling prices of steel and cement have been another area of
concern for CREDAI members that has been taken up with appropriate authorities through
various representations.
CREDAI NCR has recently organized a
workshop on tax issues pertaining to the real
estate sector. Customs Duty, Service Tax, VAT
(Value Added Tax), CST (Central Sales Tax),
Entry Tax, Municipal/Local Taxes, Stamp Duty
and Registration Charges related to the real
estate sector were discussed by participants in
the workshop in great detail.
Service tax liability for a developer of residential
complex, eligibility criteria for CENVAT Credit on
construction services used in relation to renting
of immoveable property, inputs used for
applicability of new rate of 4 per cent under
Composition Scheme of Works Contracts,
classification of composite contracts under
construction services or work contract service

47
 also came up during the discussion in the workshop.
Service tax issues in Budget 2008 gained attention of the participants in the workshop. In
particular, the participants discussed recent Budget proposals for 12 per cent service tax rate at
present, increase of threshold limit for exemption from 8 lakhs to 10 lakhs rupees for small
service providers, inclusion of seven new services in the service tax net, extension of scope of
existing taxable services,
composition rate of service
Nature of Tax Rate (%)
tax for works contract
A Direct Taxes : In the form of Income Tax, Dividend Distribution Tax, services increased from 2
Fringe Benefit Tax, Wealth Tax 14% per cent to 4 per cent,
service tax now to be paid on
B Registration Charges 8% transaction with associated
C Excise Duty and Service Tax on Input 7% enterprises either on receipt
of payment or making
D VAT on Input 7% credit/debit entries in the
E Entry Tax 0.5% books of accounts whichever
is earlier and expansion of
F Cess 1% scope of renting for use in
TOTAL : 37.5% the course of furtherance of
business also featured in the
discussions.
Also major services such as commercial and industrial construction services, construction of
residential complex services, execution of works contract services, renting of immovable property
services etc were also taken up in the workshop to understand their implications for the real
estate industry in India.
Unfortunately, the Tax structure for this sector has been an impediment in the overall sustained
growth. The Real Estate Sector is suffering from the burden of heavy taxes and levies levied by
Central & State Governments. Broadly speaking the present structure of levies is as under:

48
 Annual Performance Review
2008-09

Tax Issues faced by the Real Estate Sector

Jointly Organised by
PHD CHAMBER & CREDAI NCR
Date & Time: Saturday, 26th July 2008 at 9.30 AM
Venue: Ranaq Hall PHD Chamber of Commerce and Industry , New Delhi.
Speakers:
Mr. Atul Gupta, Partner, Deloitte Haskins & Sells (Service Tax)
Mr. Ashok Batra, Partner, A K Batra and Associates
Mr. Jayesh Kariya, Partner, Deloitte Haskins & Sells
Mr R. Muralidharan, Associate Director in PricewaterhouseCoopers Pvt. Ltd
Mr. Sunil Malhotra, CFO, Parsvnath Developers Ltd
CREDAI NCR and PHDCCI jointly hosted a seminar, 'Tax Issues Faced by the Real Estate
Sector' at the PHD House on 26th of July, 2008 in Delhi. The high incidence of taxation in the
real estate sector has somewhat put a question mark on the growth of this industry in near future.
This matter assumes importance owing to its social and economic implications for the economy.
Real Estate sector in India is the second largest employment generator in the economy after the
agricultural sector. This sector is projected to grow to US$ 90 billion by 2015, and has the potential
to attract FDI to the tune of US$ 20 billion by 2010. Industry members and experts shared there
views in the seminar and discussed policy options that could be taken up with the government.
Mr Pradeep Jain, President, CREDAI NCR and Chairman, Housing and Urban Development
Committee, PHD Chamber delivered the welcome and keynote address. He noted that the
objective of the seminar was to highlight the fact that tax issues take precedence over many
others for this sector owing to its adverse impact on the growth prospects of the industry.
Stronger and frequent representation to the government, both at the central and the state levels
are an essential part of the policy advocacy efforts of the CREDAI NCR and PHD Chamber.
Technical Session-1 of the seminar took up Service Tax, VAT and other Indirect Tax issues in
the real estate sector. Mr Prashant Deshpande,
Leader, Indirect Tax, Deloitte Haskins & Sells
deliberated on the VAT provisions in different states
of the country. Computational problems relating VAT
liability and credit claims and other practical aspects
of the VAT regime were also discussed by him. Mr Atul
Gupta, Partner, Deloitte Haskins & Sells (Service Tax)
stressed on the need for streamlining various service
taxes imposed on the real estate development sector.
Rationalization of the services list is a priority policy
goal for the real estate sector.
In the Technical Session-2 of the seminar, Mr
Jayesh Kariya, Partner, Deloitte Haskins & Sells spoke
on Direct Taxes in the real estate sector. He said
experts businesses have to structure themselves to

49
 minimize the impact of the 'draconian' tax policy in the real estate sector. Corporatization of the
real estate development businesses is strongly advisable to help this cause. This would promote
'value for projects', facilitate more funding from banks and expand scope for tie-ups with foreign
investors. Another contentious issue is the methodology of determination of business and income
tax.
Since formulation of commercial agreements has a direct bearing on interpretation of tax laws, it
is imperative that professionally crafted agreements are a necessity to deal with this problem. In
order to devise a roadmap for this industry, India needs to prepare for the IFRS and adopt
international best practices accounting standards for this industry.
Transparency and simplification of the legislations and administrative procedures are imperatives
for attracting higher investments, both domestic and overseas, in this sector. All these would
contribute to check the mounting 'transaction costs' and other overheads.
Among other issues that were taken up by the esteemed speakers of the seminar was the issue of
'title and ownership'. Investor confidence might take a hit if clarity does not prevail in this area
thereby preventing higher investments necessary to sustain the growth momentum of this sector,
on the face of global down-turn. This is important especially as very soon REITs (Real Estate
Investment Trusts) and REMFs (Real Estate Mutual Funds) will be allowed to operate in the India.

50
 Annual Performance Review
2008-09

REALTY 2008
5th Conference on Real Estate: The Changing Paradigm in Indian Real Estate
Organised by
CII (Northern Region) & CREDAI NCR
Date & Time: Friday, 24 - Saturday, 25 October 2008 at 9.30 AM
Venue: Hotel Taj Mahal, New Delhi.
Some of the important Speakers:
Mr Sanjay Chandra, Conference Chairman & Managing Director, Unitech Ltd
Mr Chanakya Chakravarti , Fund Manager, Real estate, Actis Advisors Pvt Ltd
Mr Pradeep Jain , Chairman , Parsvnath Developers Limited & President Credai NCR
Mr Anshuman Magazine, Managing Director , CB Richard Ellis South Asia Pvt Ltd
Mr Sanjay Verma, Executive Managing Director - South Asia, Cushman & Wakefield (I) Pvt Ltd
Mr Arun Khanna , Head - Corporate Real Estate , HSBC Global Resourcing
Mr Harkirat Singh Bedi , Managing Director, IDEB Construction Project Ltd
These Conferences have been successful in ensuring a stable growth environment in the real
estate sector and have been providing an excellent platform to CEOs, Business Heads and Senior
Management personnel involved in the Real Estate decision-making process across the industry
from India and overseas to deliberate on the changing scenario in this booming sector.
Fifth in the series, Realty 2008 had provided a forum to discuss the opportunities and challenges
of FDI in construction and retail industries, SEZs and the key performance indicators of corporate
real estate finance. The Conference had brought together all concerned groups viz. developers
(domestic and international), owners & decision makers (government authorities), service
providers and fund representatives (local and overseas market) to a common platform to provide
impetus to the efforts to restructure the Real Estate industry.
Focus Areas of Discussion
• Discuss the channels to effectively utilize a company's real estate assets by facilities
optimization, portfolio optimization, energy optimization as well as optimizing services
• Dynamics of the commercial and residential market while giving a futuristic view.
• Tourism fuelling hospitality (Medical/ Heritage/ Religious)
• Innovate & Go Green: a sign of maturing markets
• Going beyond commercial development/ importance of diversification
• Evolution of retail (What clicks and what doesn't)
• The capital crunch saga - deal or no deal?

51
‘Realty 2008’: CREDAI NCR President’s speech
“Let me first take this opportunity to wish you all a very happy and prosperous Deepawali.
The global economic slowdown and the lack of liquidity in the market are the two aspects that are
affecting the entire economy. The real estate sector that was growing at a fast rate and was
scaling new heights has felt the pain and has been hit hard especially more with the perception of
various communities.
You all must be wondering why I started my speech in this manner. Because I feel this CII stage
offers me an opportunity to share my feeling on behalf of the sector about this temporary phase
which is going on. However I am confident that this will be corrected eventually.
Friends, the real estate sector have been of immense interest to people across the globe. This was
evident from the fact of huge investments made in the sector. However, the sub prime mortgage
crisis had a cascading impact on the Indian financial system. This resulted in a conservative
lending approach followed by banks that inevitably increased the home loans following the impact
of CRR and repo rate hike by RBI. The move dried up the existing liquidity in the markets which is
evident from the current share market fall. The move has given critics a further boost to
question the liquidity positions of the developers and to argue that the growth in the
real estate was mere a bubble which has now burst. They are, now without being
aware of the ground realities, boasting about developers being trapped in a cash
tight situation. This in turn has influenced the spending capacities of publics and has to some
extent restricted the growth of the Indian Real Estate Sector. To add to the misery, higher risk
weight age attached to the Real Estate lending has been dampened the image of the sector's
growth.
We should recall that this is the sector: -
• That provides assistance to 245 ancillary industries,
• Is the highest employer to the Below Poverty Line.
• Second largest employment generator in the economy where the top five real estate
players employ more than 2.00.000 employees at different locations.
• Has been instrumental in changing the face of India from being an under-developed
country towards accelerating its way to a developed country. It is evident from the state
of art infrastructure developments, buildings, townships, shopping malls which are not
only restricted to the urban cities but are also spread in the Tier II & Tier III cities and
make them stand at par with the modern towns.
These concerns have increased the negative sentiments of persons who have over the period
maintained a negative perception about the Real estate sector even when the sector witnessed
• Growth rates to the tune of 30% and is contributing 8.53% of the total GDP
• Has emerged as the fifth largest destination of foreign investment.
However, the negative vibes created have hit back and have been hampering the growth of the
Indian economy and has brought it to a standstill. Envisaging the impact, the RBI in order to
stabilize the Indian financial system has reduced CRR to 6.5% that would infuse additional
liquidity of Rs 1,00,000 crore in the cash starved market. Subsequently RBI for the first time since
2004 has reduced the Bank repo rate by 100 basis points to 8 percent. This would reinforce banks'
52
 Annual Performance Review
2008-09

confidence in lending by infusing more liquidity. But, I

would emphasise on the very fact that the steps taken are
barely sufficient to keep our economy safe in the current
scenario and not grow from the prevailing levels.
In order to steer through these tough times the RBI
needs to further cut the repo rates probably by another
100 basis points and reduce CRR as well. The higher
risk weight on the real estate loans should also go.
Going forward, we do not see any decline in the
demand from the end users as there is a shortage of
27 million units. As the population keeps on
increasing, the demand is further expected to
escalate from current scenario. Even, as of today the
demand is much higher than the government
authorities without the presence of private real estate
developers can fulfil. It appears obvious from the 8.50 lakh applications received for mere 5010
flats on sale by DDA. The recent reports by real estate consultancy firms validate the view point.
The report by Cushman &Wakefield has hit hard on the face of pessimists who questioned the
future of the real estate Sector. As the industry report states that the demand for real estate
across office, retail, residential and hospitality sectors in the country is expected to cross the
1,000-million sq ft bench mark by 2012. The residential segment would contribute 63% of the
total real estate construction during the term under consideration and would continue to drive
real estate demand with 687 million sq ft. The commercial office space is projected to be 243
million sq ft and the retail and hospitality segments are expected to constitute 95 million sq ft (9
per cent) and 73 million sq ft (6 per cent) of this total demand, respectively. Considering the
burgeoning demand we have been offering commercial and residential properties both in the
affordable and the premium luxury segment.
However, we can not meet the needs and keep up to the demands of the customers without the
support of the government. Thus for the prosperity of the sector at general and customers at large
the government should facilitate the efforts of real estate developers by providing
• Minimum infrastructure guarantee under habitation policy,
• Relaxing guidelines on foreign investing in Indian Realty,
• Reducing risk weight age and
• By giving the sector “industry status” coupled with reduction and uniformity in stamp
duty.
• And of course by doing away with the restrictions on real estate loans.
We only hope the second most important sector received due attention and support from all-
government, banks, bureaucrats and media to maintain the growth. To communicate the need
we need the fourth estate to come in the aid of real estate.”

53
Building Synergies
 Annual Performance Review
2008-09

Joint meeting among Industry

Chambers, Experts
A meeting of the CREDAI NCR 'Core Committee on Tax in Real Estate' was held on 22nd October
2008 in Delhi. Mr Pradeep Jain, President, CREDAI NCR presided over the meeting.
Representatives from other industry associations (FICCI, ASSOCHAM, and NAREDCO) were also
present in this meeting along with real estate industry members and sectoral experts on various
taxes.
During the discussions, it was noted that the real estate developers in India pay highest amount of
tax (around 37.5 per cent) and yet face a critical situation of mounting tax burdens every year.
Additional taxes are imposed on this sector every now and then. Real estate sector had been
facing tax issues for long now and in spite of several representations to the government, from
CREDAI NCR and other associations, no policy measures or support to correct this situation were
adopted by the government.
Real estate sector is the second largest employment
generator in the economy and have been growing at
more than 30 per cent annually in recent years. It
attracts fifth highest FDI globally. It is in the interest of
the Indian economy that this sector continues to grow
and contribute towards sustaining the economic
growth of the country.
Given the present state of affairs in the real estate
sector, CREDAI NCR believes that a consolidated voice
from the industry should reach the government. This
requires a well-concerted action by the industry
members and hence for the first time probably in the
history of the real estate sector in India, CREDAI NCR
brought all real estate industry associations together
to engage in this critical matter jointly.
It was agreed in the meeting that detailed information
on tax issues in particular faced by the real estate
developers and policy issues in general needs to be recorded. Based on this feedback, a
memorandum on behalf of the real estate industry would be presented to the government and the
matter would be taken forward from there.

57
Forging International Partnerships
 Annual Performance Review
2008-09

Indian real estate representatives

attend EIRE in Italy
Maiden participation in such an event
CREDAI NCR along with other Indian real estate
representatives had participated in the Expo Italia
Real Estate (EIRE), held in Milan, Italy. Indian real
estate businesses were showcased before delegates
from across the globe in this fourth edition of EIRE
that took place in June 2008. A separate Indian
Pavilion with Indian theme housed Indian projects
at the event venue. This is the first time that Indian
real estate is participating in such an event.
CREDAI NCR, along with the Indo-Italian Chamber
of Commerce and Industry and ICMQ the Italian
construction certification body jointly organized the
first ever visit by Indian real estate delegation.
There is a US$ 500 billion opportunity for
investments in the infrastructure sector in India over
the next few years. Since March 2005, 100 per cent FDI (foreign direct investments) are allowed
in the housing infrastructure sector in India. This offers an excellent opportunity to Italian
companies, who have a well established reputation of expertise and excellence in this sector.
As a part of the infrastructure sector, real estate business played an important role in India's
growth story. There is a widely held view that a well developed infrastructure is a prerequisite for
making India's growth process sustainable. This therefore can be ably supported by Italian
expertise that has for generations dominated
construction business globally with their
architectural brilliance and competence. ICMQ India
has recently opened an office in India in response to
this newly emerging demand for technical expertise
in our country. Recent public policy developments
emphasize investment promotion on infrastructure
development across the country.
The Indian delegates to EIRE interacted with
potential European and Italian investors as well as
technological and engineering partners through the
B2B (Business-to-Business) meetings that ICMQ
India organized and at a special conference, Indian
real estate companies presented their projects in
India.

61
Engaging the Investor Community
 Annual Performance Review
2008-09

CREDAI NCR, IVCJ jointly organise:

'REFs and Infrastructure Forum 2008'
India's economic growth has put pressure on the infrastructure in the country. A sustainable
growth process requires a growing infrastructure so that the positive inter-linkages within the
sectors of the economy are fully utilised. Moreover, as energy and commodity costs surge to
historically highest levels, productivity and cost efficiency are the only long-term solutions to
maintain economic growth for inflation afflicted economy. As policy makers realise the importance
of modern, state-of-art infrastructure in jacking up across-the-board productivity, ample
encouragement have been extended to propel the domestic infrastructure sector through higher
investment expenditures. As a result, the Indian infrastructure sector is attracting significant
interest from the investors.
Also enwrapped in this sanguine atmosphere, is the Indian Real Estate sector. Riding the coattails
of a growing economy, favourable demographics and liberalised foreign direct investment (FDI)
regime, the domestic real estate sector has been growing at an impressive 30 per cent annually.
Despite the financial markets turmoil in the world economy over the last one year, the real estate
industry continues to be investors' safe bet. However, expertise, better understanding of the
current state of markets and networking can channelise investment into competitive industries
like real estate sector. The upcoming 'IVCJ's REFs and Infrastructure Forum 2008' next September
wishes to address these issues.
IVCJ along with CREDAI NCR hosted a two day conference on Real Estate Funds (REFs), Private
Equity and Infrastructure investments scenario in India and the way ahead.

65
Knowledge Creation and Dissemination
Academic Cooperation
CREDAI NCR and University School of Management Studies, Guru Gobind Singh
Indraprastha University, Delhi
This Memorandum of Understanding (MoU) made and executed at Delhi on 18 February 2008
1. Both the parties shall identify areas of common interest by mutual consent for studies &
research and disseminate knowledge jointly through teaching, research programmes and
consultancy works.
2. Both the parties shall jointly organize training and research programmes, seminars,
conferences, workshops on issues related to real estate and other identified areas of
common interest.
3. Both the parties shall exchange publications, newsletters and journals of each of the
parties hereto on reciprocal basis.
4. Both the parties shall assist each other in publication of any reports relating to real estate
and other identified areas of common interest.
5. Both the parties shall inform and invite each other in seminars, workshop etc organized
by any of them relating to real estate and other identified areas of common interest.
6. Both the parties shall allow printing of their respective Logos on all correspondences,
brochures, letters and any other materials relating to training, research programmes, and
seminars organized jointly.
7. Both the party shall allow the access to each others' library resources.
8 The representatives of each of the parties hereto shall meet from time to time to identify
the areas of common interest and to evolve a procedure for undertaking the aforesaid
programmes etc.

66
 Annual Performance Review
2008-09

Technical Collaboration
CREDAI NCR and ICMQ Certification India Pvt. Ltd (subsidiary of an Italian company duly
incorporated under Italian law having a registered office at via G. De Castillia 10, 20124 Milan
Italy)
This Memorandum of Understanding aims to describe how the Parties will develop joint activities
to promote the quality improvement of Ready Mix Concrete and the third party certification
scheme for Ready Mix Concrete Manufacturers

1 ICMQ shall bring:

a) an internationally recognized
brand, leader in the certification
and inspection services in the
construction and building material
industry with a strong
specialization in Ready Mix
Concrete manufacturing process
b) a specific know how and
competence in the certification
(both management system and
product), inspection and training
services in the concrete field.
c) the accreditation required for
issuing internationally recognized

certificates (the accreditation process is “on going” with National Accreditation Board for
Certification Bodies - NABCB - and is expected to be concluded in autumn 2008)
d) a training program accredited in India by Quality Council of India (QCI) National
Registration Board for Personnel and Training (NRBPT) for training QMS Lead Auditors
2 CREDAI NCR shall bring:
a) knowledge of the developers and builders needs
b) capability of involving them in information and training activity;

67
Critical factors in formulating efficient
Contracts
CREDAI NCR-GGS IPU joint workshop on Contract Management in Real Estate
Date & Time: Friday & Saturday , 26th - 27th September 2008 at 9.30 AM
Venue - SCOPE Complex, , New Delhi.
Speakers- Shri L.R. Gupta, Former Director General of Works, C.P.W.D
Shri Jagmohan Lal, Ex. Add. Director General, CPWD
CREDAI NCR and Guru Gobind Singh Indraprastha University, Delhi jointly conducted a two-day
workshop on the topic- “Contract Management
in Real Estate” on 26th and 27th of September,
2008 at the Scope Complex, Lodi Road in Delhi. The
law of contract is of great significance as all
business transactions are based on contracts. The
theme of the workshop was therefore effective
management of legal issues in contracts to ensure
profitability of business organisations.
Contract management is the process which
ensures that parties to a contract fully meet up their
respective obligations as effectively as possible, in
order to achieve business objectives under the
contract. The purpose of this workshop was to
develop an understanding of legal and managerial
issues in contract formulation, performance and
enforcement to help avoid some of the pitfalls in
contracting and providing an understanding that
makes it easier to deal with lawyers and/or
arbitrators should the need arise.
The workshop was attended by around fifty
participants from diverse backgrounds:
Professionals who are into managing public,
private, PSUs or NGO sector business affairs and
contracts, including executives in Industry,
Government, Entrepreneurs, State-owned
Enterprise Managers, Engineers, Project and Office
Managers, Sales and Marketing Managers,
Contractors, Sub-contractors and Consultants
delivering Contract Services and Support were
among the attendees of the workshop.
The workshop started with a welcome address by
Dr Kuldeep Chander, Professor, Building

68
 Annual Performance Review
2008-09

Engineering and Management School of Planning and Architecture and Principal

Consultant, Centre for Research in Real Estate and Infrastructure, Indraprastha
University (IPU), and subsequently a vote of thanks by Shri Kailash Gupta, Vice President,
CREDAI NCR in the Inaugural Session. Both of them noted the increasing importance of
efficient contract management practices in order to control costs, check delays in the completion
of projects and save the contracting parties from the hassles arising out of disputes.
In the Session-1 of the day-one, Shri L R Gupta, Former Director General of Works,
Central Public Works Department (CPWD) said that contracts are a necessity in today's
business world. Numerous laws, regulations and unforeseen events make dealing with business
contracts a complex affair. Managing public, private or NGO sector business affairs and contracts,
require understanding of the intricacies involved in contract formulation, interpretation, review,
performance, enforcement, negotiation, as well as remedies in case of its breach. Various types of
contract documentation followed by the Government of India and The World Bank were also
presented by the speaker in this session. Strengths, weaknesses, risks and the missing terms
before signing a contract agreement so that the final agreement is effective and enforceable were
also elaborately discussed by Shri L R Gupta.
In the Session-2 of the day-one, Shri Jagmohan Lal, Ex-Additional Director, CPWD
discussed the Indian Contract Act and Arbitration and Conciliation Act. The management of
ongoing business contracts require knowledge, skill and experience in order to be able to handle
all the details necessary to ensure getting what is bargained for as well as coverage against claims
that have not been done. Hence, knowledge of rights, remedies and duties regarding the
performance and enforcement of legal and contractual rights is essential. Balancing the exercise
of rights, selection of remedy and ensuring duties are also important.
In Session-3 held on the day-two, Shri Jagmohan Lal, Ex-Additional Director, CPWD
discussed procedure and case studies on resolution of disputes through arbitration. The breach of
contract may have serious consequences both to the business and reputation. Therefore,
companies need to have sufficient evidence should things deteriorate into a breach of contract
and enforcement actions become necessary. Before taking the plunge into a time intensive and
expensive process of dispute settlement, companies should know whether there is a breach at all
and if it is so, then what are the consequences.
Issues like possibility of any scope to avoid
litigation and treat the breach, obligations under
the agreement and costs of an enforcement action
are to be evaluated by companies before any legal
action is initiated to settle the dispute. There are
also possibilities that ADR (Alternate Dispute
Resolution - arbitration, mediation etc.) could be a
better alternative to filing a lawsuit or go for
negotiation or a combination.
There was an Open House discussion towards the
close of the day-two of the workshop moderated
by Dr Kuldeep Chander and the eminent panel
consisted of; Shri H S Dogra, Ex Director General
(Works), CPWD, Shri G S Sharma, Advocate and
Shri Jagmohan Lal. Participants got opportunity to
69
 put forward their queries to the panellists.
The workshop closed with a Valedictory and Wrap-up Session, and Professor K K Aggarwal, Vice
Chancellor of GGS Indraprastha University addressed the participants and announced at the
success of the workshop programme with the CREDAI NCR. He expressed his desire to continue
conducting workshop with the CREDAI NCR on real estate sector issues and contribute towards
development of the real estate sector. This followed a certificate presentation ceremony.

Knowledge Creation and Dissemination

Academic Cooperation
Between
CREDAI NCR
And
School of Planning, Design and Construction at Michigan State University
We will enter into an "initial collaborative agreement" for the first 2 years
Initial collaborative agreement will be on the following issues.
• Information Sharing
• Collaboration in development of training and educational programs
• Collaborative research
• Collaborative activities in countries other than U.S.A and India
• Exchange visits of the researchers/officials from both sides

70
Reaching out to the world
 Annual Performance Review
2008-09

www.credaincr.org

CREDAI NCR Website

Under the leadership of Mr Pradeep Jain, President, CREDAI NCR several initiatives to promote
organizational image of the Confederation of Real Estate Developers of India (CREDAI), Delhi-
NCR region were taken. In this regard, development of the CREDAI NCR website was the first
step. The purpose of going online is to reach out to a wider audience with the guiding
philosophy: “We are as good as our online visibility”. The vision to usher CREDAI NCR into the
information age and utilise the potential spin-offs for long term growth and development of
the real estate industry in India is summarised in the following points.
(1) Maximum Visibility- Occupying mind-space of the policy makers, media, Indian
industry members and other stakeholders is a prerequisite for building healthy working
relations in an industry association. A well-concerted approach towards resolving real estate
business issues calls for engaging the stakeholders and recognise inter dependencies in
today's networked world. This is important to understand each other's problems so as to move
together towards a win-win situation. Engaging stakeholders regularly requires a common
platform and an online portal suits best for this. Introducing CREDAI NCR present
Membership, inviting potential members, institution profile, role, functions, activities, mission
and vision of CREDAI NCR are posted on the following sections of the website:
I. About Us (CREDAI NCR, CREDAI)
II. C R E D A I N C R M e m b e r s h i p ( w i t h
information on essential qualifications &
procedures to become a member)
III. The CREDAI NCR Quarterly Newsletter
(carries news on CREDAI NCR's activities &
real estate sector updates)
IV. Events & Announcements: Seminars,
Conferences, Workshop details (includes
presentation archive, picture gallery, video
archive, registration facility, sponsors'
space)
V. Media: Press Releases & CREDAI NCR in
news
VI. Careers (to develop professionals with real
estate domain knowledge)
VII. Contact Us (to get in touch with the CREDAI
NCR Secretariat)
(2) Creating Knowledge Repository, Sharing
Information- Today's information age has made it
possible to acquire valuable and timely information
on the Internet. Creating a knowledge base and
sharing it with the users adds to intellectual resources
required for real estate development business and
keep abreast with the latest developments. Toward
this end the following sections have been included in

73
 the website.
I. Industry facts: News & views on real estate business
II. Policy Updates: Articles on current policy issues
III. Research & Analysis: Insights on key issues and dynamics of the sector
IV. Investor's Resources: Topics on finance & investments in real estate sector
V. Featured Articles: Current Issues
VI. Tools: Help for users
VII. Industry Data & Statistics: Facts and Figures on the sector
VIII.Property Indices (RESIDEX)
IX. Daily News Alert & monthly news wrap (on real estate and allied sectors)
X. Custom Bulk Mails from www.credaincr.org (to communicate important updates
with the users)
(3) Building Relationships, Developing Synergy, Aiming Consensus- The 'virtual
world' has thrown open opportunities of communication at the rate of speed of thought. We
sincerely believe this is not an overstatement. Barriers in terms of physical distance, culture
gap and even language difference no longer restrict communication among willing parties.
Mobilizing stakeholders, brainstorming business issues and collective action ensures all round

growth of the industry. The online directory of real

estate on the CREDAI NCR website intends to be a
forum for interaction, not only among developers but
also vendors, investors, technical experts, research
institutions and other professional communities
related to real estate activities. CREDAI NCR and the
prestigious Indraprastha University, Delhi joined hands
to conduct regular workshop on real estate topics and
has collaboration in developing professional courses
attuned to the needs real estate industry. A similar
arrangement with the premier Michigan State
University, the US is being worked out. Over the past
one year real estate developers confronted with
challenging issues like credit crisis, flagging demand in
the real estate market, surging costs etc. Conflict of
interests among stakeholders arises very often in
business. Meaningful and regular communication
among stakeholders prevents uncertainty in the fast
paced modern business world. The following section in
the website attempts to serve this purpose:
I. Join our community: Online Directory of
Real Estate in India
(4) Exchange of Ideas- Blog & Forum sections in the
website are interactive knowledge sharing platforms
for free and constructive discussions among
stakeholders on real estate business and related
issues. Face-to-Face section of the website feature

74
 Annual Performance Review
2008-09

interviews with thought leaders and eminent personalities from the real estate industry
I. CREDAI NCR Blog
II. Forum
III. Face-to-Face
(5) On the Global Radar- CREDAI NCR website is visited by people across the world; 10,402
visits came from 52 countries, and 10,402 visits came from 266 cities. Google Analytics reports
on CREDAI NCR website traffic and a comparison with other industry association websites
shows the traffic growth rate for www.credaincr.org has been increasing steadily. We would
like to invite you to visit our website and let us know your views and suggestions on the same.

Table-1: Website Rankings

(Source: Google Analytics)
Website Rank (India) Rank(World) %visitors(I) %visitors(OI) Age of website
Assocham.org 14800 286775 94.2 5.8 >15yrs
Ciionline.org 15393 174230 87.7 12.3 >15yrs
Nasscom.org 45404 551784 93.2 6.8 >15yrs
Credaincr.org 64199 938186 97.5 2.5 <4months
Phdcci.in 83666 1668651 100 0 >15yrs
Credai.com 118878 1392022 96.3 3.7 >5yrs
Koapa.net 141288 2290717 100 0 >5yrs
Naredco.org 241214 3492083 93.8 6.2 >5yrs
Mchi.net NA 15080528 NA NA >5yrs
Credaibengal.com NA NA NA NA >5yrs
Pbap.org NA 1918696 NA NA >5yrs

Table-2: TRAFFIC SUMMARY of the CREDAI NCR website

(Source: Google Analytics)
Visits 10,402 (In four months )
Page views 27,436 (In four months )
Bounce Rate 58%
New Visits 40.75%
Avg. Time spent on Site 3.36 min
Traffic Source Direct Traffic: 42.34%
Others (Mainly from daily news mailer): 31.44 %
Top Content Latest News & Updates
Country wise visit 10,402 visits came from 52 countries
City wise visit 10,402 visits came from 266 cities
Daily News Mailer Send across to more than 10000 interested users; this item in the site attracts most traffic. The
list of e-mail IDs is likely to grow by 150 per week

75
Testimonials: What CREDAI NCR
website visitors say
“Congratulations on the "Silver lining in the gloom” featured in your Nov. 22 newsletter. The story is a valuable
contribution to the current "Global Financial crisis and Indian Real Estate market crisis" debates. The article is a timely
piece of clear thinking and broad perspective. On the supply side (Design & Development) of the property market we can
learn from previous downturns during which those developers with long term commitment and maturity were rewarded
for persisting with the sector. They did so by adopting product and process innovation. One example is the adoption of
internationally proven project cost planning and management techniques which on paper incur a very small overhead
but in practice optimize project value and reduce cost blow out risk. In the recent past market buoyancy neither of these
factors has been given much importance in the rush to get to market "at any price"! Please keep up the good work with
your industry newsletters.”
Peter Cox
Managing Director
Padghams Cost Management
Australia

“The daily news update from you is very informative and useful to us. We would like to receive it regularly from you and
hope to be in touch with you.”
Mousumi
FICCI
Delhi

“It is indeed a quick update of whatever is happening in Industry. Got to appreciate the efforts you and your team are
doing to help us with updated information on one platform.”
Sukhiya Kulkarni
Senior Manager - Planning
Inspira Infrastructures Ltd
Mumbai

“Thanks for your regular updates on Realty News! I must say the effort has been fantastic and positive.”
Pranav Desai
Chief Investment Officer
Usha Realty
Mumbai

76
 Annual Performance Review
2008-09

“Thank you for your e-mail. I wish to confirm that my e-mail id cb@royalorchidhotels.com is correct. We are happy with
the services you provide and look forward to your continued support in the future. I would like to wish you and your team
all the best for 2009.”
Chender Baljee
Chairman & Managing Director
Royal Orchid Hotels Limited.
Bangalore

I thank you for your mails. Please continue to send the news letter
Chandrakant Raipat
Past Chairman
REDAJ
Ranchi

“The mails which you have been sending are quite informative and have helped in keeping abreast with the latest news.
Keep it up.”
Raveendran
Former Director
Kerala Builders F

“Your email news has been of great help in understanding what is unfolding behind the HEADLINES we read in TOI or HT
New Delhi. A great contribution from you in understanding the Realty sector in these troubled times.”
Manjira

“Good service”
Lalit Kumar Jain
Chairman
Kumar Builders

“The service has been very useful to me in providing convenience in terms of presenting major real estate news
appearing in different newspapers and from different sources in one place thus making it easier and quicker to know the
current updated news in the sector. I think CREDAI NCR is doing a good job in providing this service and in appreciation of
the same I shall be happy to continue receiving the same.”
Abhinav Parekh.
Director
Belani Group

77
 “The newsletters provide great insight into the RE market. Keep it up.”
T.N. Ravi
Regional Head (North)
ICICI Home Finance Co. Ltd.
New Delhi

You are providing very good service by sending us daily updates. Please continue it.
Punit Chaudhry
Assistant Secretary
PHD Chamber of Commerce & Industry
New Delhi

Thanks for all your efforts in consolidating the news on the Indian Realty Sector.
Sandeep Nargas
ICICI Bank Ltd
New Delhi

It has been a useful compilation for reference.

G B Singh
Chairman & Managing Director
Red Fort Capital Advisors (P) Ltd
New Delhi

Thanks and the updates are really good. Keep up the good work
Suresh Hari
Secretary
CREDAI KARNATAKA

“..your services have been good and it really gives the consolidated news related to the industry.”
Vyomesh (@Vimal) Shah
Managing Director
Akruti City Ltd

78
 Annual Performance Review
2008-09

“..have been receiving your mails send to this id, appreciate all the efforts taken to update everyone on the industry
latest news. It is very helpful in keeping abreast of the developments”
Dr. NAJEEB ZACKERIA
Managing Director
ABAD Builders Private Limited
ABAD GROUP

The newsletter carries relevant news and acts as a single source to get all the information.
Sandeep Kotak
Kotak Mahindra Bank
Mumbai

Doing a good job!!

Hitesh Mittal
Technopack India

Thank you. I find your emails very informative and useful, so please do keep me on your list!
Karina Lowe
Hypo Real Estate Bank AG
Commercial Real Estate Origination Europe
London

Great service.
Jesal Sanghvi
Westbrook Partners
New York

79
Innovation Initiatives
 Annual Performance Review
2008-09

Membership Helpline Services

A direct link between CREDAI NCR and Members
In order to assist the Real Estate Developers[1][1] with their day-to-day operations, and to
provide assistance on Legal, Regulatory, Taxation and other Policy issues, CREDAI NCR in
consultation with area experts, propose to provide a dedicated Membership Helpline Service to its
members. Data, information and advice from various sources would be used towards resolution of
issues.
An integrated database on issues faced by the industry members would enable the Secretariat to
devise a long-term strategy for sustainable growth of the Real Estate Development sector. This
would also facilitate speedy and effective resolution of business issues faced by the developers
through timely and forceful policy interventions.
A sneak preview of what this service package intends to deliver would be as follows:
Updates on
i. CREDAI NCR activities, events and initiatives
ii. Broad industry trends and related data
iii. Government notifications and policies
Understanding on
i. Range of Secretariat services
ii. CREDAI NCR's views on key policy issues
iii. Membership benefits and advantages
iv. Secretariat Rules and Procedures
Communicating
i. Industry specific issues of concern
ii. Changes in membership details, Updating Secretariat records
iii. Suggestions, Ideas and Inputs
These queries would be answered over electronic mail. Select questions will also feature in the
CREDAI NCR Quarterly Newsletters for sharing with the developer community.

Summary Operations
i. Collect information from member
companies on various business issues and
maintain records
ii. Collate information with inputs from domain
experts (cost to be borne by the client for
priced resources gathered from external
sources), stakeholders
iii. Channelise the process of Resolution
iv. Escalate issues in relevant circles like
government, bureaucracy, judiciary, public
Institutions etc.
v. Formulating a unified process for redressing
business issues

83
 While Secretariat queries are to be taken up on pro-rata basis, nominal charges for individual
queries have to be paid. Detailed components of this service and tariff-structure may be decided
after preliminary discussions on this draft.
Disclaimer: The professional services referred herein are strictly facilitative in nature and under
any circumstances do not claim to act as a substitute for consultancy and advisory services by
technically qualified experts. The Helpline Service intends to systematically apply first rate project
management skills to solve live industry problems.

84
 CREDAI NCR
Theme for 2009
“housing for all”
 Annual Performance Review
2008-09

Year of Affordable Housing

Pradeep Jain
CREDAI NCR

Real estate sector - saw a remarkable rise from 2005 to first half of 2008, both in residential and
commercial segment. The period witnessed high economic growth which gave birth to higher
standard of living there by giving rise to demand for high end and premium luxury homes. The
developers in order to fulfil their needs started offering luxury projects and such projects were
huge success. However, the real estate sector was struck in more than one way in the later half of
the year 2008, by the record double digit inflation.
First, the rising cost of inputs has been putting pressure on the cost of real estate projects.
Second, the higher rate of interest caused an increase in cost of funds for real estate projects.
Third, is that due to higher home loan rate and less disposable income due to inflationary pressure
buyers had to cut their budgets. To add to the pain, the collapse of American financial system,
followed by the sub-prime crisis has drained out liquidity from the market, thus leaving people
with less cash in hand. This further had a negative impact on industries across sectors. This
brought a drastic change in the spending habits of consumers, whose focus shifted from luxury to
basic housing facilities. There is a shortage of 27 million dwelling units in India at present; hence,
it is not the demand-supply mismatch that is keeping away buyers from the market. It is the
negative sentiment and declining spending capacities of people that has forced them to postpone
their purchase. Thus, the developers' focus has shifted from Premium/ Luxury housing towards
affordable housing with an aim to provide housing for all.
These homes though would provide basic amenities instead of premium facilities provided in the
luxury apartments but would not compromise on the quality offered as they would be built up
using same construction technologies.
The thrust therefore now is on the affordable housing in Tier I, Tier II and Tier III towns. It is
envisaged that the concept of affordable housing would be a sure shot success in Tier I towns as
there is a near absence of Affordable housing. Needless to say that the demand for affordable
housing in Tier 1I & Tier III would grow steadily, as availability of land at reasonable rates coupled
with high growth and rapid urbanization trends has led to huge demand for affordable housing
everywhere. Along with this the desire to stand at par with the modern towns and urge to have a
better living standard has further given a force to the
demand. Developers will supply as per the demand
and today if the demand is towards Affordable
Housing we are working on various options to bring it
to the customer. Real estate sector is a support
system to 240 ancillary industries and for the
economy as construction industry is the second
largest employer after agriculture sector, thus
economy stimulation in this sector should be the
priority agenda. Joint efforts of government, banks
and developers would definitely help the real estate
sector in catering to the need of affordable housing.
So, let us adopt the motto- “Housing for all” in 2009.

87
Contact: Dibyendu Choudhuryy
Relationship Manager, 09910907673
1411, Chiranjiv Tower,43, Nehru Place, New Delhi-110019, INDIA
Tel : 91-11-46634663, Fax : 46634613
www.credaincr.org
e-mail: dibyendu@credaincr.org