Not one person filed an online tax return in Lucknow

By Vipin Agnihotri

In an age of Internet, it’s quite surprising that not even a single individual return has been filed online in Lucknow. When The India Street contacted the Income Tax (I-T) department of Lucknow, this fact came into light. It is worth mentioning in this regard that there is a separate assessing officer in the department to look after the individual returns that have been filed online. The 'systems' division of the Lucknow Income Tax department that has a responsibility of handling the data on the same said it has not received any online return so far.

"At this moment of time, we have not come across any instance where an individual has filed the return through online facility”, pointed out one senior official on condition of anonymity.

In terms of statistic, there are around three lakh individual assesses in Lucknow. Generally speaking, this category of tax assesses consists of those who get income from salary, proprietorship and interest.

Interestingly, the version of the Income Tax department negates the claim of lawyers and chartered accountants. Plenty of people filed their returns with the assistance of these professionals this time. “At least five percent of individual returns have been filed electronically this time around,” pointed out Rahul Singhania, chartered accountant in Lucknow.

When asked to comment on official version, Rahul maintained that it is quite tough to give exact figures for individual returns. Whatever be the figures, one thing is for sure it does not portend well for the department, which has ambitious 'online' plans for the future.

According to government officials, people of Lucknow have limited knowledge about computers and they are not too familiar with the technology as well.
Online filing can be defined as the facility where returns can be submitted electronically from home, cybercafe or workplace. But, for that to happen one require a digital signature to authenticate the return form. The pivotal factor here is that large chunk of the assesses in Lucknow do not have digital signatures.

On the other hand, corporates and partnership firms (having income exceeding Rs 40 lakh) that 100 percent returns came online. This is because of the simple reason that online filing is mandatory for both the category.

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Business community of Lucknow reeling under acute shortage of coins

By Vipin Agnihotri

What is going on in Lucknow? Humorous as it sounds, Lucknow is reeling under acute shortage of coins because the Reserve Bank of India (RBI) is yet to ensure a proper supply of coins.

It is worth pointing out that the RBI claims of ensuring proper coin supply in the market has set up only one coin dispensing machine for hundreds of people, especially the petty traders who visit the RBI Gomtinagar daily to get coins.

“We have to stand in queues for hours to get coins. It is time consuming and affects our business too,” pointed out Kshitiz Joshi a grocery shop owner. The business community, especially big business, are not happy as the machine dispenses only a small amount of money at one go. It sounds comical, but unfortunately it’s true.

It has come into the notice of The India Street that the Reserve Bank of India has also made poly-packs of Rs 2 and Rs 5 coins available at its counters. Although, their distribution too is limited. Furthermore, the RBI has also set windows in a number of branches of nationalized banks to ensure proper flow of coins in the market.

Though, this too has failed to check the crisis as most of these banks have confined the facility to account holders only. “Apart from bonafide customers, we are distributing coins to non-account holder as well, “pointed out a bank official.

Meanwhile, the coin crisis has turned into a money minting exercise for a select few. These people are doing brisk business. Traders and shop owners have no other choice, but to turn to these grey market people to meet their daily demand of coins. If experts are to be believed, these grey marketers of coins have developed a network of coin collection executives in nearby districts. It’s the job of these executives to collect coins and parcel it to their head for a commission.

Vishal (name changed), a regular coin supplier in Lucknow said: “We manage coins from different districts. We even have sub-agents in towns and villages. They collect coins and send them to Lucknow for a commission”. Vishal claimed, “Coins are being smuggled to North Eastern States and Bangladesh where they are used to manufacture razor blades, ear rings and statues from nickel and copper in coins.” Sounds like the metal is worth more than the coin.

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Closing New Retail Stores is not good for India

I came across this article posted by the Indiaretailbiz.com site and had to comment on the seriousness of the situation.

Big blow to modern retail in Uttar Pradesh; Mayawati orders closure of Reliance Fresh and Spencer’s stores

The article states; “The Uttar Pradesh Chief Minister Mayawati on Thursday has ordered closure of 10 new Reliance ‘Fresh’ stores in the state. Besides Reliance, ‘fresh’ stores, other retail chains like RPG’s Spencer’s have also been served closure orders by the government. Shops operating inside Malls even if selling green products have, however, been kept outside the purview of the government’s order.”

I can’t help but wonder how foreign retail investors view matters such as these. I understand there were protests and vandalism, but by caving into these tactics only encourages the use of them. If I were a foreign retailer, I would be hesitant to move into India until a firm policy is in place to handle these matters better.

“I have constituted a high-level committee to review the whole affair and until the committee gives a green signal, Reliance ‘Fresh’ stores will remain shut,” said Chief Minister Mayawati.

It reminds me of an occasion when a high profile foreign bar and restaurant grand opening was closed in Mumbai because a small bar in the area violated the do not serve alcohol after 11pm rule in effect at the time. The New high profile bar and restaurant had flown in important dignitaries and Hollywood stars to the opening, but were completely shut down because a small local bar violated a rule. Anyway, I digress.

Mayawati should immediately reopen the stores and stop playing games in order to appease one local group.

Addressing a Press conference in Lucknow on Thursday, Kanchal a member of Rajya Sabha, said that his organisation was opposed to all large retail chains, not just those of any particular group. “Our agitation against the big retail companies would continue till they wound up their business from the state,” Kanchal added.

Their isolationist remarks sound like the Taliban or some other fringe isolationist group albeit not calling for heads but calling for a ridiculous policy of hiding one’s head in one’s sand. It harms the country and does not help India’s image as the world’s largest democracy.

I leave you with a sensible man who said; “The decision seems to have been taken in haste and therefore should be reviewed,” said Venugopal Dhoot, President, Assocham.

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Lucknow Poised for High Rate of Real Estate Growth

By Vipin Agnihotri

Riding high on the surging economic growth, increasing disposable income and growing aspiration for modern living, Lucknow is all set for a big time real estate growth.

In my opinion, the real estate in Lucknow has undergone a tremendous change in the last few years. From group housing to bungalow, villas, condominium, penthouses, high-end luxury apartments and townships, Lucknow is enjoying the real estate boom. The boom is evident from the number of projects dotting the skyline of Lucknow.

It has come into the notice of The India Street that number of residential projects is in various stages of construction in Lucknow and many more are in the pipeline. What Lucknow is witnessing is a very good housing market combined with the nations top developer establishing their base in Lucknow.

Along with local developers such as Eldeco, Sahara, Rohtas, SAS Properties, national players in the real estate market such as Ansals, Parsvnath, Omaxe, Unitech and many Dubai based developers such as GC Constructions, EMAAR MGF are coming up with their residential and commercial venture.

If experts are to be believed, the real estate market of Lucknow will continue to enjoy this boom. Unlike other metros, Lucknow has the scope of horizontal expansion that will ensure better township planning.

There is no doubt that rising income levels of people are helping them aspire for better quality apartments and homes. Lucknowites are moving beyond flats to luxury apartments. It is worthwhile pointing that Omaxe Group is developing Omaxe Heights, a multi-storied luxury apartment complex, while Parsvnath Group is coming up with Parsvnath Planet, an air-conditioned opulent condominium.

And if private players are catering to upper crest, Government agencies like LDA and UPHDB is looking after the interest of common people. Besides apartments, the integrated township concept has also ushered in a big way in Lucknow, with many big players busy developing mega townships.

According to sources, Ansal API is coming up with a very ambitious project with Sushant Golf and Hi tech city over 5000 acres at the cost of Rs 22500 crores. This integrated township boasts of luxury residences with features such as golf course, tennis academy, a university and IT park.

Developers foresee big potential for the Lucknow real estate as the growing commercial and manpower requirements has led to influx of people from satellite towns of Lucknow, which would translate into ever growing demand for housing and infrastructure.

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Commercial activity moving to the Tier-III cities in India

By Vipin Agnihotri

Increasing realty costs in the metropolitan cities of India has seen commercial activity move to the Tier-III cities. It has come into the notice of The India Street that property prices in cities like Agra, Jaipur and Lucknow corrected sharply by around 20 to 25 percent following increase in the interest rates in the last six months. All this has happened due to gap in demand and supply in these cities.

The pivotal factor here is that although supply increased in the last two or three years, no fresh demand generated as hardly any new commercial establishments came up in the Tier-III cities. In my opinion, at the first place due to boom in real estate market, investors invested in these products, as the cost of the fund was low. But with the rise in interest rate, investors are finding it real tough to invest in the realty assets. This in turn means that the developers are also finding it tough to sell their project in the Tier-III cities.

According to experts, those investors who had invested in real estate sector earlier want to exit. This is because of the simple reason that there not many end users in the Tier-III cities. But signs are that the hard days would soon be over in these cities. “With the increase in rentals and cost of labor in Tier-I and Tier-II cities, Tier-III cities have emerged as alternative commercial centres where off-shoring facilities could be shifted,” pointed out Rahul Mahajan of Rahul associates.

The recent survey has come to the conclusion that whilst all the Tier-III cities provide for prospective cost arbitrage opportunities for off-shoring facilities, the development and demographic profiles vary substantially across the locations, giving different business risks.

The only downfall with these cities being the non-availability of top-notch telecommunication infrastructure and big pool of suitable professionals. There is no doubt that infrastructure support, governance, cost of living, quality of life, operating cost, would determine the attractiveness of a location to emerge as an alternative commercial center. Plenty of small towns and cities builders are guaranteeing returns through rentals on the investment after completion of the projects. However, in my opinion if Indian economy continues to grow at 8 to 9 percent per annum, the commercial activities in the Tier-III cities are bound to pick up.

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Commercial activities moving to Tier-III cities in India as realty costs increase in metros

By Dr Suvrokamal dutta

Increasing realty costs in the metropolitan cities has seen commercial activities move to the Tier-III cities in India. It is worth mentioning in this regard that property prices in the Tier-III cities such as Agra, Jaipur, Lucknow and Chandigarh corrected sharply by around 20 to 25 percent following rise in the interest rates in the last few months.

In my opinion, this is mainly because of gap in demand and supply in these cities. No doubt, supply has increased in the last couple of years but no fresh demand is generated as hardly any new commercial establishments came up in the Tier-III cities.

If experts are to be believed, at the starting stage due to boom in the real estate market, investors invested in these products, as the cost of the fund was low. But with the passage of time as interest rate almost doubled from 6 percent to around 12 percent in the last few years, investors are finding it real tough to invest in the realty assets, which implies that the developer are finding it hard to sell their project in the Tier-III cities.

Furthermore, it has come into the notice of The India Street that those investors who had invested in real estate sector, want to exit. Point to be noted here is that as there are not many end users in Tier-III cities, prices have started dipping. But, looks like, the hard days would soon be over in these cities.

With the increase in rentals and labour cost in Tier-I and Tier-II cities such as Delhi, Mumbai, Bangalore and Pune, the Tier-III cities such as Chandigarh, Jaipur and Lucknow have emerged as alternative commercial centres where off-shoring facilities could be shifted.

Few of the prominent players that have moved to Tier-III cities are Dell and Infosys to Chandigarh, Wipro and US Software to Kochi, Genpact to Jaipur and TCS and Tata Technologies to Lucknow.

“If Indian economy continues to grow at 8 to 9 percent per annum, the commercial activities in the Tier-III cities are bound to pick up,” pointed out Anirudh Yadav, business journalist based at Lucknow. In theory, the Tier-I and Tier-II cities are already overcrowded. What’s more, rentals in these areas have increased around four times in the last four years. Taking this into consideration, in medium to long term, growth in the country would come from Tier-III cities. That’s why, the investors, who enter the market early, are likely to reap benefit the most.

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Retail: Next big thing in India

By Vipin Agnihotri

Lucknow, India: There is no doubt that retail is the next big thing in India as retail shops are doing a brilliant business at present. Lots of Indians believe that the retail shops are a good idea as they provide goods at a discount. After all, why pay more when you get it for less at the retail shops?

Now the Mega Corporation Reliance too has come into the fray of retail market. A chain of convenience stores with the name of ‘Reliance Fresh’ is now spread across the NCR area with an estimated investment of Rs 8,000 crore ahead of Bharati- Wal Mart. It is worth mentioning in this regard that this tie up has thrown up a big and one of the world’s most attractive retail markets with a population of over one billion.

Apart from groceries, fresh fruits and vegetables along with medicines are also available in the shops with a discount that attracts lots of people to these stores. Interestingly, the entry of the big players in the retail business has also brought in its wake considerable controversy.

But despite that, advocates of chain stores are adamant that their entry will not only change the economy and lifestyle of the Indian consumers but also that of the farmers. For example, the stagnation in the earnings of the Punjab farmers would be a matter of the past. Reliance ‘farm to fork’ project will handsomely contribute to the increased incomes, as the farmers will be getting fair share of the price.

“Indian consumers are smart and they are all price conscious and they want to finish the work as fast as they can. They do not go to a provision store for fun. The retail shops are helping the consumers save more and in some way it is capable of supporting the middle class of India,” pointed out Dr Suvrokamal Dutta, renowned financial expert.

Statistic wise: India’s retail sector is wearing new clothes and with a three year compounded annual growth rate of 46.46 per cent, one can safely say that Retail is the fastest growing sector in the Indian economy. Experts believe that traditional Indian markets are making way for new formats such as departmental stores, hypermarkets, supermarkets and specialty stores. What’s more, western style malls have started making their presence felt in metros and second rung cities alike, giving Indian consumer an unparalleled shopping experience.

According to Prashant Jha, correspondent of local business daily, India’s big middle class and its almost untapped retail industry are pivotal attractions for global retail giants interested in entering newer markets. While organized retail in India is only two per cent of the total US $215 billion retail industry, there are some reports, which are depicting that it will grow at the rate of 25 per cent annually, driven by changing lifestyles, strong income growth and most importantly favourable demographic patterns.

By 2010, organized retailing in India will cross the US $21.5 billion mark from the current size of US $7.5 billion. This is quite different to the situation ten year ago when there was not one shopping mall in India. At the present juncture, in Delhi, Mumbai and their suburbs, there are about 700 malls. Organized retailing in small towns in India is growing at an impressive 50-60 per cent annually compared to 35-40 per cent in the bigger cities.

Sahara City Homes township launched in Lucknow

By Vipin Agnihotri

Lucknow, India: Sahara Infrastructure and Housing (SIH), one of the country’s leading real estate companies launched its ambitious Sahara City Homes Township Project in Lucknow.

The high quality township, to be developed on 200 acres of land near the Indian Institute of Management (IIM), was formally launched by managing worker and chairman of Sahara India Parivar Subrata Roy Sahara by laying a gold brick.

Speaking exclusively to The Indian Street, Sahara’s chairman said that the launch of the township was a pioneer effort in the country. “Such township has never been developed in the country,” he said, adding that SIH would develop 217 such projects across the country.

Roy pointed out that SIH had already launched the project at a number of places. “It will be a landmark in the housing sector as Sahara City Homes will be a different type of township where all facilities will be provided at one place,” he said.

SIH head Susanto Roy said Sahara Homes would be a self sufficient township with infrastructural facilities including power, water, roads, security and health. He said that dwellings to suit the needs of all sections of society, specially the middle class families, would be developed in the township.

“This project will set new standards in luxury and style and will give an opportunity to many to experience world class living and the best amenities that the township will offer,” he added.

In Lucknow, the possession of the township property will start in the year 2009. In the first phase, 30 blocks are being constricted. They will have 1620 residential units. The construction of other blocks will commence by the end of this quarter.

Spread on an area of 200 acre, the Sahara City Homes, Lucknow, will be one of the biggest real estate project with 5,255 residential units including 1 to 5 bedrooms high-rise and mid-rise apartments, independent row houses, independent semi-detached houses, penthouses and independent bungalows.

As planned, the residential township will have a range of world-class facilities offering global living standards that have never been seen in the country. The self-sufficient township will complement residential units with complete support functions for security, health, education, transport, communication and entertainment.

Designed by famous architect Hafeez Contractor, the first fully air conditioned township will provide best community living and will change the living standard of people. The estimated worth of the Lucknow township is estimated to be Rs 2000 crore.

Strategically located on the Hardoi by-pass road, Sahara City Homes will provide its residents a lush green environment, well-lit wide metalled roads, water bodies, integrated landscaping and special light effects in the township. The township will have modern amenities like multilevel security system with centralized control station, CCTV and quick response teams.

Sahara City Homes will also provide uninterrupted power supply with 100 per cent back up, 24-hour satellite connectivity for television, video conferencing and wireless connectivity for broadband Internet access inside and outside the houses. Every house will be provided with a computer free of cost to enable usage of broadband connectivity.