Analysis of Indian news dated 21-Jul-2012
July 21, 2012
Jaithirth Rao, a builder, built flats in 10 to 15 lakhs range for lower middle-class people. He says:
- The laws of the land are really drafted to encourage the construction of Rs 2 crore villas or Rs 1.2 crore apartments. They positively discourage homes that cost Rs 10 lakh to Rs 15 lakh. Take Maharashtra; you can build a farmhouse of 2,200 sqft on one acre with virtually no approvals required. So if you have 10 acres, you could build a palace, with virtually no approvals. But, in that same 10 acres, if I want to build 400 affordable housing units, it will take over two years to get all the approvals. In effect, the government supports rich people building palaces.
- 90% of the bottlenecks lie in getting approvals. Interest rates are a comparatively minor issue.
- The sector doesn’t want any subsidies. The business can prosper without subsidies. Maruti 800 did not ask for subsidies, nor did Nirma. Only government needs to step out-of-the-way.
- Brazil and Mexico have policies to encourage affordable housing over palaces. India on the other hand favours palaces/big houses over affordable ones.
- In manufacturing, the returns are 18 to 20%. In real-estate, the returns are 50 to 60%. So affordable housing can be built of good quality, without any government subsidies.
In India, rules and regulation need to reduced, so that private builders can build as per the needs of consumer. The government should neither encourage nor discourage big or small houses. Let the market decide which types of houses get build.
Russia and China veto a third resolution that would require Assad to withdraw troops within 10 days or face more sanctions. The resolution would have put pressure only on Assad and ignored the violence initiated by the Western-backed rebels.
Barack Obama is not even a USA citizen; and he is USA’s president. Americans must be really dumbed down to accept this quietly. Even Indians did not permit a foreign-born person to become their Prime Minister, in spite of winning majority elections.
India suffers from Stagflation. The main reason is government policies. India needs to reduce taxes and subsidies. The deficit needs to be reduced. Then alone can country prosper.
It does not matter whether Rahul does this changes, or Modi. If these changes are made, then the country will become richer. Otherwise, it will become poorer.
The current situation is not the same as 2008 for gold and silver. In 2008, people thought that US $ was a safe haven. Since 2008, USA has printed trillions of $. So now, people know that only precious metals are safe havens. So now the flight to safety, is a flight to gold and silver. In long-term, gold and silver will move higher.
Spain has a 24.3% unemployment; among youth it is 50%. Why? Because Spanish government decided to payback banks. Ideally, Spain should have defaulted on its debt. Spain would then still have suffered some austerity, but the suffering would have been lesser. All PIIGS are in the same state; they need to follow the example of Iceland, which showed the middle finger to global bankers.
Europeans, you will not get justice from your governments; you will have to fight for it; some lives will have to sacrificed; then generations will enjoy wealth and freedom because of these Martyrs.
Buy physical gold and silver to protect yourself. If you cannot touch it, you don’t own it. Exit all paper investments including ETFs, stocks, PF, PPF, NSC, etc.
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