Friday, 28 July 2017

A Move Towards Sustainability

As per rankings of MoneySuperMarket, India ranks 75th globally in terms of human impact on environment per person. This ranking looks at the impact of human activities on the environment, biodiversity and other resources. More importantly, it also looks at the human use of sustainable and renewable sources of energy. This raises a strong concern as for a country of 1.34 billion people; the renewable energy that India is currently producing is only 15.2 %. Needless to say, producing renewable energy is a major need of the day. Relying on non-renewable sources of energy is not sustainable because these sources will not be replenished in our lifetime. Also, population growth and infrastructure development are only pushing for the increase-in-need of sustainable energy for the near future.

With vast lands and access to natural resources India has a huge potential to switch to sustainable energy. But what is sustainable energy? It is a form of energy that meets the demands of today without creating a danger of its depletion for the future generations.  This form of energy is found to be free of cost and does not harm the environment. Various renewable forms of energy are known to be sustainable forms of energy. Solar, wind, geothermal, hydropower and ocean energy come under this category. In 2016, India signed the Paris Climate Agreement and this move has brought a huge shift in India's attitude towards climate change. Our country has been developing sustainable forms of energy in order to control climate-change and remain self-sufficient.

Here are a few developments that highlight India's initiative to embrace sustainable forms of energy:
  • Cochin Airport became the first fully solar powered airport in the world.
  • The newly-built Kochi Metro will get 25% of its electricity from solar energy very soon.
  • Pune airport will run on fully powered solar energy by next year.
  • India made its 1st solar boat named 'Aditya' and this boat completed 150 days of voyage.
  • Indian railway is installing rooftop solar panels on 250 trains.
  • Indian railways also launched the first solar powered train from Safdarjung railway station in Delhi very recently.

We hope to see many more such developments in the future to ensure sustainability in India's energy generation. 

Monday, 17 July 2017

GST & Real Estate

In the recent past, India has seen extensive developments with respect to the laws and policies that are being implemented. The first was Demonetization, followed by the RERA Act and the most recent being the implementation of Good & Services Tax Act (GST Act). GST Act has been implemented with the intent to remove cascading effect of taxes & to bring in more people under the tax net, however, many have been struggling to understand what it exactly does and how it would affect people.

With respect to real estate, it is unlikely that GST will have any impact on property prices.The current rate of 12 per cent on under-construction projects might marginally bring down prices in the affordable segment owing to input tax credits, but it is unlikely that similar impact will be felt in mid-priced or premium developments. Developers may get some benefits fo projects that are in the nascent stages, but will have to bear the tax burden of ready-to-move in projects, since they are kept out of GST ambit. 

One aspect that needs government’s immediate attention is the stamp duty charges. Since, they continue to remain along with GST and vary from state-to-state. The stamp duty rate averages between 5% - 7%. Abolishment of this would bring down the final costs of apartments.          

Broadly speaking, the act will be a game changer for the industry. Its comprehensive approach and uniform tax structure will not only ensure more transparency in the economy but also would be helpful in boosting the investor confidence.