Announcing this at the ASSOCHAM National Conclave on Threat Before Real Estate Sector – What are Solutions? held here today, Housing & Urban Development Adviser in Planning Commission, Mr. Harish Chandra also informed that the Cabinet Secretary has already convened a meeting of all States to seek solutions to revive stressed sectors including that of real estate, without specifying the date for the meeting. He, however, added that the mid term appraisal of Planning Commission will now take place immediately after conclusion of forthcoming Parliamentary Polls.

The new schemes will be unfolded during the forthcoming mid-term appraisal exercise of the Planning Commission even at the cost of deficit financing for which the Commission will enter into series of consultation with industry association like ASSOCHAM, said Mr. Chandra.

According to him, in its recent exercises, the Planning Commission, the RBI and the Finance Ministry have jointly announced series of measures to rebuild confidence in Indian economy and many more such initiatives could also be announced by the Commission after concluding the proposed mid-term appraisal, hinting at further lowering of interest rates for affordable housing.

In the meanwhile, Chief Executive Officers of Omaxe Ltd., Raheja Developers, Pioneer Urban Land & Infrastructure, Jones Lang LaSalle Mehgraj that participated in ASSOCHAM organized conference on Real Estate sector, collectively raised their voice, opposing foreign direct investments in real estate sector.

CMD, Omaxe Ltd., Mr. Rohtas Goel who heads the ASSOCHAM Real Estate Committee said that FDI’s in real estate would neither increase supply and demand for affordable housing. Their entry into it will enhance and shoot up the prices of land and therefore, real estate FDI’s should be discouraged as this will pose a serious challenge to affordable housing.

He demanded that the present model on which real estate sector currently stands crippled, needs to be changed and sought that in its stimulus packages of Rs.40,000 crore for infrastructure development, Rs.10,000 crore should exclusively be allocated for real estate sector as subsidy so that affordable housing becomes a reality.

Mr. Goel said that he has decided to offer affordable housing to people for which the first site identified is that of Indore and subsequently this initiative will spread in other parts of the country like Chandigarh, Ludhiana, Jaipur etc.

Speaking on the occasion, Mr. Navin Raheja, Managing Director, Raheja Developers and Sr. Member of ASSOCHAM Real Estate Committee also opposed FDI’s entry into real estate as it would lead to shooting up of land prices and hardly provide for affordable housing.

According to him, the real estate which is currently under stressed would come out of it in next 2-3 months as developers would have to build houses for all stake holders to stay and survive in the business.

Among others who spoke on the occasion demanding another Stimulus package for real estate sector include ASSOCHAM Secretary General, Mr. D S Rawat, Ex-CMD HUDCO, Dr. P S Rana, Mr. Pankaj Renjhen, Managing Director- North India, Jones Lang LaSalle Mehraj, Mr. Kuldip Chawla, Vice President, Red Fort Cappital and Mr. Shashikant Arora, President, Association of Certified Realtors of India.

In fact, real estate sector is a vital driver of growth of our economy. It is the 2nd largest employer; it provides employment to the real masses and unskilled workers besides skilled workers, with a vast majority of them below poverty line. The sector supports multiple industries, ranging from steel, cement, paint, sanitary ware, light fixtures, glass, aluminum etc. The sector also contributes towards urban development by undertaking public private partnerships including slum rehabs and is a significant contributor to government revenue.

The present situation of the Indian real estate sector reminds the challenging times that the sector faced in the mid nineties. Much of the demand in the early nineties was created by speculative property investors expecting their assets to appreciate in value – an ‘irrational exuberance’ over the short term, without there being a sufficiently wide and deep class of actual buyers of property.

But this time around, the demand was driven by the booming economy. In the last five years, India has grown at a compound annual rate of 8.9%. The high rate of growth dramatically improved the income level of urban Indians and the middle class today has significantly greater buying power than a decade ago. The overall economic development in India has stimulated demand for more and better housing, increase in office space, development of modern retail formats, and demand for more hotel rooms and the need for improved forms of entertainment.

Kalpana Morparia, JP Morgan India’s chief executive officer, recently revealed that the company has invested nearly 500 mn dollar from the fund in 4 sectors of the Indian economy – real estate, infrastructure, manufacturing and financial – and that it is exploring other investment opportunities in the South Asian nation.

“We have a fund of 1 bn dollars to invest in Indian companies,” Morparia said. “We have committed nearly half the money in real estate, infrastructure, manufacturing and financial sectors.”

Morparia did not identify the companies or projects that JP Morgan India has invested in, but she described funding commitments as “opportunistic,” and said that the company was in no hurry to complete the 1 billion dollar plan because it is investing its own money.

“The moderation in exports, small business output, and real estate related activity could crimp urban consumer spending as employment and household income growth slackens,” JPMorgan said in the Nov. 17 research note.

In September 2008, JP Morgan India said it would double its private-equity investments in the country up to 1 bn dollar, in addition to investing approximately 500 million dollar in its corporate finance and advisory units. Total private-equity investments across India increased 3.2% in the first half of 2008, to about 6.8 bn dollar.

JP Morgan Chase has invested in a variety of private Indian entities since last year, including L&T Infrastructure Development Projects Ltd., Apollo Hospitals & Enterprises Ltd. and Cafe Coffee Day, a Chikkamagaluru, India-based division of Amalgamated Bean Coffee Trading Co. Ltd. Café Coffee Day has more than six hundred cafes in 110 cities across India, making it the country’s largest coffee café.

JPMorgan India has also acquired separate, 50 mn dollar equity stakes in a pair of fast-growing, New Delhi-based real estate developers: Emaar MGF Land Ltd., which focuses mainly on residential, commercial, retail and hospitality projects, and BPTP Ltd., which is currently developing numerous projects, including residential and commercial complexes, retail spaces, IT parks and special economic zones and hospitality ventures.

JP Morgan India’s continued funding for Indian real-estate ventures stands out in a country where developers are struggling to complete ambitious projects. As the global economic crisis has worsened in recent months, local banks have clamped down on lending to the construction industry and a stock market slump has closed off equity raising through initial public offerings

JPMorgan Chase, which launched its India operations in 2001, has approached India’s central bank for licenses to set up four more branches in the country. The branches would be in Delhi, Chennai, Bangalore and one more destination in the south, according to the company.

In addition to its Mumbai banking branch, JP Morgan India currently has back-office operations in Mumbai and Bangalore. It employs more than 11,500 people in the country and plans to increase its headcount there, in spite of the slowing Indian economy.

The country’s growth was 7.9 percent during the first quarter of the fiscal (April-June) and 9.2% during the second quarter of 2007-08 (July-September), as per data on gross domestic product (GDP) released by the Central Statistical Organisation (CSO).

Prime Minister Manmohan Singh, Finance Minister P. Chidambaram and Reserve Bank of India (RBI) Governor D. Subbarao have projected the Indian economy to expand by 7-8% during the current fiscal year ending March 31, 2009.

The main reason for the fall in the overall economic expansion during the period under review (July-September, 2008) was a low, 5-percent growth in the manufacturing sector, as opposed to 9.2 percent in the like period of last fiscal.

Similarly, agriculture also logged a significantly lower growth of 2.7%, as opposed to 4.7%, while hospitality, transport and communications expanded the best 10.8 percent against 11 percent during the second quarter of fiscal 2007-08.

What has, however, come as a surprise was the 9.7% growth ion construction, as opposed to 11.8% in the corresponding period of the previous year.

Financial services, realty and business services also registered a notable growth of 9.2%, against 12.4%, given the circumstances where real estate companies have been complaining about a major slowdown.

“Economic slowdown in India has been on since June. The real impact of global economic slowdown on the Indian economy will be actually felt in third and fourth quarters,” said Sri Ram Khanna, professor and head of department in Delhi School of Economics.

Dalip Kumar, head of projects at the National Council for Applied Economics Research (NCAER), an economic think-tank, said economic depression in US had begun showing its impact on the overall industrial growth in India.

“Our industrial growth has been hit and would continue to deteriorate further next year. This has largely contributed to the downfall of India’s economic growth,” Kumar told IANS.

The Associated Chambers of Commerce and Industry (Assocham) said that the 7.6% growth was satisfactory given the circumstances and expressed confidence that the same would be maintained in the remaining months of the current fiscal.

“Slowly and gradually, interest rates, inflation and input costs are falling down whose collective reflection will fall on the overall growth of GDP,” the chamber’s president Sajjan Jindal said in a statement.

Another industry lobby, PHD Chamber of Commerce and Industry, presented a somewhat different picture. “The slowdown in is shows that our economic indicators have started weakening with some segments being affected more than others,” the chamber said.

“Investment in infrastructure should be increased and an early completion of ongoing projects be effected on a war footing. Attention should be paid on building rural infrastructure to rejuvenate demand in the countryside.”

Every week, leading mortgage lenders and estate agents publish figures of declining prices, higher number of houses on the market, fewer buyers and smaller numbers of new mortgages being advanced.

Except in several areas of London, property prices all over Britain have recorded at least a 2% drop in the last year due to the credit crunch.

The slowing of Britain’s property market has led to several individual and institutional investors looking to India and other international hotspots.

India is also seen as an attractive destination due to the Indian government’s recent decision to relax rules for foreign investment in the housing sector.

Several India-specific investment funds have been set up, while British citizens of Indian-origin are increasingly investing in places such as Gujarat, Gurgaon, Bangalore, Chandigarh, Pune and Jaipur.

The investors here are also courted by Indian builders and property agents who organize exhibitions in London, Manchester, Birmingham and Leicester.

In Birmingham, a seminar was organized yesterday by Navyroof.com, a company that highlights investment opportunities in the most up-and-coming areas of India to the UK.

It offers potential investors advice on how they could benefit from investing in India’s thriving housing sector.

At the seminar, information was provided on the Indian economy and the sustainable factors driving its rapid growth. Also highlighted were the areas likely to give the greatest capital appreciation on investment.

The Real Estate Regulatory Authority should be on lines of TRAI, SEBI and IRDA. Senior BJP leader Murli Manohar Joshi will lead the delegation of BJP investors cell that has collected 10 lakh signatures on the memorandum to be submitted to Prime Minister Manmohan Singh on Monday, on issues affecting small investors.

The BJP wants its demands to be reflected in the Union Budget to be presented on February 29. Murli Manohar Joshi said, “We appeal to the Government to protect the small investor, who is the backbone of the Indian economy.” Joshi said that the money of the small investors is not secure and they are not immune to the ups and downs of the market.

Among the other demands of the BJP restoring 80 (L) in the Income-Tax Act, in order to make savings more attractive to the people. Joshi said farmers, students, housewives and senior citizens, who are not income-tax assessees, should be exempted from the requirement of producing PAN Card for starting the Demat account.

National Security Adviser M K Narayanan had said at the 43rd Conference on Security Policy at Munich, “Isolated instances of terrorist outfits manipulating the stock markets to raise funds for their operations have been reported.

Besides, he wanted housing projects to spread to small towns and cities, in order to reduce pressure on land in metros. With metros spreading, there is mounting pressure on the agricultural land, which could hot food security. The bank loans for housing, also was on the higher side, which is hidden even by the banks.

Md Ali Alabbar, Chairman, Emmar Properties, told the reporters “The Indian economy is growing and there is a shortage of housing units here. I guess it gives enough opportunity for all of us”. It is well-known that Emaar MGF is a joint venture between Emaar Properties PJSC of Dubai and MGF Development Limited of India. . The Dubai-based realty major has 41.9 per cent stake in the joint venture, while MGF Development Ltd of India has 53.3 per cent stake in the company. Emmar MGF has recently diluted some stake to IFCI at the upper band of the issue price.

Mr. Shravan Gupta, Executive Vice Chairman and Managing Director, said “Out of the total land, we have already paid for 89 per cent of the land. As much as 47 per cent of the land belongs to the state capital region, 34.5 per cent in the National Capital Region and the remaining in other places”. Further he added that the company has now presence in 26 Indian cities, which is set to be spread out to 40 cities once work on the projects starts.

On December 31, 2007, Emaar MGF had land reserves across India. It has 13024 acres of land out of which it has development plans for approximately 12,028 acres, which can provide it a saleable area of approximately 566 million square feet.

The company estimates that on December 31,2007 its land reserves will provide it with a proposed saleable area of approximately 136.5 million square feet of plotted residential development; 318.8 million square feet of built up residential properties; 88.9 million square feet of commercial properties; 18.0 million square feet of retail properties; and 4,960 keys in hospitality properties.