bailout! woooo yeah!

Euro 700 billion is the new bailout package announced by European Union to save the Euro area from financial collapse. This is after more then 300 billion had already been pumped into the sinking economies of member states. After the US, its Europe. Japan's already been suffering for decades, so whats next?

Just yesterday I had written a note for our company's annual report that the developed economies, or rather, "developed" economies are still doing the clean up after the 2008 financial crisis brought on by the most powerful economy in the world, and it seems that this circle is destined to go round and round for the foreseeable future, because as I have mentioned many times before, there are many things that are structurally wrong with the economic system they live in, and the lifestyles they maintain.

I have mentioned on my blog quite a few times earlier about the economic report that I had contributed to during my internship, and it focused on the same issue. That was 2009, and now two years later, all these developed economies, read the Americans and the West Europeans, including the Irish, the Greeks, the Portuguese and a few others, are still feeling the heat. That report was written by an investment bank that was actually British and an integral part of this very economic system that I write so acerbically about sometimes, and yet that report really enthused me because of its truthfulness. After all the technical analysis and opinions on where the economies are headed, my MD, the lead author of the report, still finished off on a very fundamental note - that these economies must bring about a fundamental change in their lifestyle of high consumption. Of course, when one is used to living in luxury, and at the cost of the environment and cheap production of the third world, any change in the status quo must come slowly, and hopefully surely.

Coming back to the bailout, the big daddies of the European economy are France and Germany, and I think they reached an agreement on the bailout as recently as last week. Googling for their views on the Greek bailout throws out a lot of mixed views, but even they mostly swing towards the pessimistic side, including this American view of why their (Merkel-Sarkozy) plan for the debt crisis will fail...."miserably".

I Think the one word that was missing for the past many years in the way business was done in say New York, London or Paris or even Tokyo, actually especially Tokyo before they went down, was "fiscal prudence." In fact, countries like India which had a greater control, or rather, financial oversight over their economy were ridiculed regularly for not being "open" enough, something which countries like India still get to hear today. The global watch dog still views India as a market that needs to be opened more for its firms. I wonder when this mindset will change, or rather, I wonder when the scales of the global economies will truly start turning in the third world's direction?

But this is not a third world rant, rather, its a first world rant, so coming back to the impending European debt crisis, the writer that I referenced to in the Forbes link says that Merkel in a way was (I use the word "was" because her agreeing to the bailout goes against her public view of opposing such a bailout) a leader who was financially prudent, and was in favor of banks and institutions who lent indiscriminately or took on too much risks to bear the consequences, or in other words, fold.

“Angela Merkel has consistently opposed the terms of the Greek bailout because she is well aware of the domino effect which could begin after they fully agree to the terms — this making them the guarantor of several irresponsible countries with no ability to pay them back.”

On Friday, Angela Merkel “caved” on her tough stance which involved mandatory participation of the private sector, (banks, financial institutions etc.) and said she would back a “voluntary” participation of banks and financial institutions in the bailout of Greece. This due to the pressure of the threat that it was mandatory that they strengthen the European banking system and support the weaker economies of other European countries to avoid a complete meltdown.

The domino effect that is being talked about in Europe is of course all too real, and will definitely impact the entire world, and take many years to resolve. There are somethings that I am unable to process completely in this chain of thought though. When people talk of situations where the US economy collapses, or defaults, then some say that since the US prints the global currency, its dollar, all it has to do is print more. I am not taking into account the domino effect that it will create on its own, but that's a scenario I have definitely heard from a lot of places. So can the Euro print more Euros to get out of trouble? I don't know, and all the smart bankers and policy makers out there will surely discuss these issues. I am sure in financial economics there will be a margin up to which they will be comfortable with the Euro sliding in such a scenario.

Then at the same time, since the global economy is centered around the US economy more or less, even if they default, so what? I mean does China stop doing business with it? Do they stop selling arms to the rest of the world? So the same should be true for the European Union then. I think the fact that they are not one big economy like the US but a mix of all these economies, big and small, that creates bigger problems and lesser space to bully their way out.

I came across this article by a European politician written before this bailout package was announced, but it seems that even now these nations are not able to come around to accepting the fact that there needs to be a fundamental change in the way they run their economies. He talks of, first, getting Greece out of the mess. Then he talks of strengthening their own financial institutions and policies so this doesn't happen again, and then to encourage savings by strengthening their bond market, and yes, creating a climate of investment and growth.

In my opinion, all these good words that we hear from American and European politicians today are nothing new, but in their hubris and overconfidence, they totally overlooked them because when the going's good, why question the process? Now we have all these people preaching to the rest of the world about good policies and institutions as if its the third world's that been living prodigally, but then, charity begins at home. It'll be interesting to see how Europe gets out of this mess, and I hope they do, but long tough years seem to be ahead for them, and I wish them the best of luck.

yellow Indian journalists

I had read an article on yellow journalism some time ago and read about what kind of reporting constitutes yellow journalism. In fact, I had made a note of it in my blog as well, and realized that all those characteristics, if not all, are employed by the tabloid media of today. When I say tabloid media, I am clubbing all the Indian media together, especially the English media because in their eyes, objectivity means nothing and their only concern is to sound as sensationalist as possible and look as western as possible.

So I was reading some news headlines online today and it just struck me that a lot of online articles today begin with questions. And not just generic questions or harmless questions but mostly negative questions that will already create a bias in the mind of the reader that whatever the subject of the "news" article is, is a bad person, thing or phenomenon.

On Google news, the news is presented in sections, and under the Sci/Tech section this morning, there is a substantial coverage of the Mumbai metro. The Bhaskar Group's English daily, Daily News & Analysis has a coverage as well, titled "Metro ride in Mumbai could prove 'shocking'". Now there are two or three thoughts I have about this headline.

First, it is sensationalist without doubt. I personally have a huge dislike for reporting that looks more like an opinion piece but is reported as objective and factual. a metro ride could prove shocking because the wires running overhead have the potential to hurt the commuters inside the trains and the commuters and drivers on the street below. Using the same theme, lighting can start striking the Mumbai streets and could prove "shocking" to many, including taking many lives. So perhaps the dumb media needs to come out with a headline that citizens beware of this rainy season because it has the potential to kill. Anybody who follows the national media diligently, and unfortunately there are many who take everything the likes of Times of India, Hindustan Times and NDTV peddle very seriously, should then drastically reduce the time they spend outside, because if their luck runs out, the next lightening victim could be them.

Here is the point I am trying to make is there is threat, no doubt, and unsafe construction, wiring could pose problems, but here is when objectivity takes a back seat. To catch the eye of the reader, you put a vague headline on top, such as this - that a Mumbai metro ride could prove shocking. First, the Mumbai metro is a prestigious and much awaited project. Much, much delayed and with a myriad of issues, but prestigious none the less. So after thousands of crores being invested, if a metro rider is going to get "shocked", then obviously you will prick your ears and try to find out why.

Then the second part is that Mumbai Metro is not just one kilometer long, so is the wiring faulty or dangerous throughout the constructed line, or just one stretch or one specific location? If I can understand the situation correctly, here is what is happening. Now any metro runs on electricity, and there are a number of ways of providing this to the coaches. First, you can do as they do in the railways, the overhanging cables which is connected to the coach. This is what the first line of Mumbai Metro has. Now another way of providing this source is through the third rail, which is what the Kolkata metro and the London metro have and under-construction Bangalore metro proposes to have. The Delhi metro, which can be called the seed for all the new metro projects in the country, has overhead cables, and so do the lifelines of Mumbai, the locals.  Delhi metro has had incidents in the past and even deaths, but as far as I recall, I have not heard of any mishaps due to the overhead cables.

When a metro system is being laid, there are a lot of discussions done on what technology to use, what design to use, and what not to use, and the engineers and designers and other professionals must have sat down and discussed whether the line should have a third rail or overhead cables to provide power. Just to soothe all the self-flagellating Indians out there, these professionals not just include Indian professionals, but all the global companies that are part of the EPC contract, such as Siemens of Germany or Veolia of France. So surely they must have had very good reasons for using the overhead cables.

Now an issue with the overhead cables in the Mumbai metro's first line could be that they are not constructed well. But I am glancing through the article and I do not see any issue of bad construction. And yes, there are hundreds of safety scenario analyses done, "what if" analyses done so that metro systems all over the world are prepared for most eventualities.

So this is the Indian media. I am googling this news and I realize that actual media reports say that the MMRDA wants the Mumbai metro authorities to "explore" the third rail option to provide traction to the metro system. These media reports say that the reason why overhead cables could be dangerous in Mumbai is because its path is surrounded by many tall buildings, something which most of Delhi metro avoids. This is however completely lacking in the Indian coverage.

The fact about technology is that no matter how efficiently it is run, one can't rule out a mishap or error - by the machine or the person running the machine. Even Kolkata metro is facing problems this rainy season as water has seeped into the tunnels and is affecting the functioning of the third rail.

So finally, my peeve is that all these Indian media houses have adapted this form of yellow journalism where they try to be opinion leaders instead of being professional journalists. The television media does it all the time, seeping in their biases into their words and the way they present issues. Perhaps soon all the pages of a newspaper will be the ed-op pages because there won't be objective news, but what the journalist, his/her editor, and their paymasters want the situation to be presented as.

Women in India need no enemies

I have on more than one occasion maintained that a society that cannot protect its children and care for its women has no right to survive. I categorically place the Indian society, including all the smaller societies that make it, into this category.

The fact that India is one of the world's unfriendliest and disrespectful place for women and children need not be repeated again and again to prove that its true. It is true but time and again, there will be reports published in the national and international media which will tell us just how backward we are as a society.

So when a poll by Thomson Reuters Foundation says that India is one of the world's most unsafe places for women given its track record of female infanticide, female foeticide and human trafficking, I think we as a shitty, tabloidical, shallow society that we have become, should pause, think nothing of it and move on, because that is just how important this issue seems to be for us. Better yet, let us watch television where we will be able to see half naked women gyrating to crass music and lip-syncing to absolutely crass lyrics. Yes, I think that would be an apt tribute to this report. Then we can tell the rest of the world that look, our women are so free, how can you say such a thing?!

In this poll, carried out by TrustLaw, the legal news service arm of the trust asked 213 gender experts from all over the world to rank countries based on their perception of danger and the risks posed to women on these six criteria - health threats, sexual violence, non-sexual violence, cultural and religious factors, lack of access to resources and trafficking.

If I look at this list, women fall behind on each and every one, including the cultural and religious factors. In a country where when a monkey of a human being misbehaves with a girl in public, its the girl who is reprimanded for maybe wearing revealing clothing, or for taking that path, or even giving hints to the animal, and the animal just goes on with his daily life of being a nobody.

So this is the society that we live in, this is the society that turns a blind eye to injustice, or this is a society that just doesn't say maybe there is something wrong if we allow our women and children to be exploited and suppressed habitually and systematically.

India's record in human trafficking as always been atrocious, and I am simply unable to comprehend how it is so lucrative that all the politicians and policemen look the other way (while making money on the side). In other words, this is a country ruled and administered by pimps.

According to the TrustLaw website:

India ranked fourth primarily due to female foeticide, infanticide and human trafficking.

In 2009, India's then-Home Secretary Madhukar Gupta estimated that 100 million people, mostly women and girls, were involved in trafficking in India that year.

"The practice is common but lucrative so it goes untouched by government and police," said Cristi Hegranes, founder of the Global Press institute, which trains women in developing countries to be journalists.

India's Central Bureau of Investigation estimated that in 2009 about 90 percent of trafficking took place within the country and that there were some 3 million prostitutes, of which about 40 percent were children.

In addition to sex slavery, other forms of trafficking include forced labour and forced marriage, according to a U.S. State Department report on trafficking in 2010. The report also found slow progress in criminal prosecutions of traffickers.

Up to 50 million girls are thought to be "missing" over the past century due to female infanticide and foeticide, the U.N. Population Fund says.

Some experts said the world's largest democracy was relatively forthcoming about describing its problems, possibly casting it in a darker light than if other countries were equally transparent about trafficking.

Is it possible to protect all of a billion people? If we take crime statistics, is it acceptable to hide behind the mask of numbers, saying that the number of rapes is very small when compared to the total percentage of the population, or some other ridiculous comment like that? Is it acceptable to blame women for wearing provocative clothing or going out of their homes and thus inviting the attention of the animals roaming outside? These all exist in a society because the society itself is slow in accepting, or living, the modern elements that one would think any modern society is based in - the freedom of the individual, respect and equality for all races and genders and creeds, or respect for life itself. Many people blame our backwardness on most of these modern parameters, including one as simple as basic etiquette, on our past, saying we are such an old society that we will take time to change. Till we can make our social development a priority at the societal and governmental level, no amount of economic development will be able to bring genuine happiness and growth to our country.

Thanks big drug!

The big news concerning the health of the millions of poor and sick across the third world, and obviously very briefly reported in the ever-sensational tabloidical Indian media, was that the major drug companies of the world have reduced the prices of major life-saving drugs such as those for diarrhoea and malaria, which kill millions of men, women and children in the poor nations across the world.

This is good news, definitely, and before I start talking about whats in it for them, let me try to dig out more details of this development. So according to the BBC News, GlaxoSmithKline, Merck, Johnson & Johnson and Sanofi-Aventis have agreed to cut prices through the international vaccine alliance called GAVI (Global Alliance for Vaccines and Immunization).

According to the news, the medicines will be subsidized by the higher prices being charged in the richer nations. According to the CEO of GSK, Andrew Witty,

"What we need is a return to invest in the next generation of new vaccines and drugs and that has to come from the profits of the medicines or the vaccines," Andrew Witty, chief executive of GSK told the BBC.

"But it's obvious that if you're in Kenya or a slum in Malawi or somewhere like that there is no capacity for those people to contribute to it, so they have to be helped out by the contribution from the middle and the richer (countries)."

There's something that I have been really curious to get some concrete data on - how much of the R&D investments of the big drug companies is going into life saving drugs and how much of it is going towards the lifestyle diseases, which mainly afflict the richer nations.

Some examples of the price cuts are:

GSK said it would cut the price of its vaccine for rotavirus by 67% to $2.50 (£1.50, Rs. 112.5) a dose in poor countries.

Merck has said it will provide its own rotavirus vaccine for $5 a dose, coming down to $3.50 (Rs. 157.5) once more than 30 million doses have been sold.

The good thing is that Indian pharma companies too are working towards these price cuts.

The price Gavi pays for pentavalent vaccines, which protect against diphtheria, tetanus, pertussis, hepatitis B and Haemophilus influenzae type B will be cut by two Indian firms, Serum Institute and Panacea Biotec.

According to the coverage in the Times of India, which focuses on the Indian companies that are part of this pledge, the alliance is short by USD 4 billion in its commitments towards vaccinating populations in many poor countries.

Bharat Biotech, Serum Institute and Shantha Biotechnics are developing rotavirus vaccines for GAVI-eligible countries. Vaccines from these firms, however, are not expected to be ready for purchase through Unicef until approximately 2015.

I think its my own ignorance in this case that I have not heard of GAVI before. The BBC article talks about them a lot, and in glowing terms, and I did read recently that Bill Gates found it.

Its not that its without its critics. One of the reader comments in the Times of India article that I just referenced is that GAVI is a "notorious NGO with an aim on depopulation!" However, that reader makes a very valid point - whether the price of a vaccine is low or high, for a healthy nation, the main aim should be reducing the number of vaccines given to the children. I think what the reader has in his mind is a thought similar to what I had regarding aid to the third world. Don't make them dependent on aid, rather, work towards creating avenues of growth so they won't need aid.

This article in the British newspaper, The Guardian, discusses why GAVI is so short on funds, but it also tells me how this seems like a big tragicomedy with huge hints of the white man's burden. The countries funding it are European, the NGO is western, and the companies winning their contracts are western, when it has been reported again and again that Indian companies can make the same vaccine at a much much lower cost.

Gavi agreed to pay $3.50 (£2) a dose, or $10.50 per child, since each child needs three shots. But to tempt companies in, it offered double that price in the first years, subsidised from the $1.5bn pot of money in the AMC. Two of the biggest pharmaceutical companies in the world - GSK and Pfizer - won contracts to supply 30m doses a year for 10 years. They were guaranteed $225m each from the AMC, in addition to the $3.50 Gavi pays, which works out at a total price of $7 a dose for the first two years.

Gavi has also committed itself to funding a range of other vaccines. The demands are so great that it may even struggle to afford the full rollout of a new vaccine to stop the annual death toll from meningitis across a central belt of Africa, even though the vaccine developed by an Indian company costs less than 50 cents a dose.

MSF and Oxfam say the money could have been better invested in helping developing world companies in India, China or Brazil to produce vaccines at a cheaper cost. The cheap African meningitis vaccine was made by the Serum Institute of India. The company is now working on a pneumococcal vaccine and will have a version available by 2015 that is expected to cost $2 a dose, or $6 (Rs.  a child.

I think its the power of big drug companies at work here. Since most of the funding comes from the western nations, I am assuming the pressure would be to engage companies that are based in the west. Its quite similar to the way the rich nations and now the Chinese do business - we will fund you, but you use our equipment.

Coming back to the question whether developing vaccines is really a priority for the big drug companies of the west, the article only briefly mentions that pharma companies (I am assuming it only means the western pharma companies) have left the field because of no profits. But if they are going to fund these vaccines from their profits from the medicines they sell in the rich nations, then that is in direct conflict with the raison d'etre of any public company - profit!

I can't seem to understand, but what would make more sense is if these companies would stop making it so difficult for the numerous pharma companies in India, Brazil and elsewhere to fill in the vacuum. Thats where the nations of the world need to come together and work out a proper agenda that will encompass all the poor nations in the world instead of leaving it to individual NGO's or institutions to try to make a change.

Huff and puff and blow the house down

At any point in time, there are so many stories at play behind the scenes in politics in India that whenever I say or write something about anything that is going on, my immediate feeling is that I am probably wrong because I might not even be knowing whats actually going on.

With what is going on between the forces facing the government, at present the face of which is Baba Ramdev, and the mighty Government of India, who had to use physical force against the modern Yoga guru, I really can't say who is right and who is wrong, but what I do wonder is how can this man fluster this government so much? Especially this government who's hallmark in office has been secrecy and obscurity in its words and actions.

This time, I feel the CON'gress led government is very conveniently again using the bogey of "Hindu nationalism" or this obscure phrase called "Saffron terror" to again hide from its responsibility towards the people of the country who have been braying for them to be tough against corruption in the country. The irony is this - how can the most corrupt entity that rules this country take action against its own?

Corruption again, is a very broad word, but I think what is shocking in today's India is the relative ease with which so many big politicians and businesspersons have been able to get away from the long arm of the law, and all we are left with is scapegoats like Raja and Kalmadi. It is not that people's anger has not been able to manifest itself into action. Congress has been losing allies and elections in a lot of places, with the first to go many years ago in Lalu Yadav. The DMK relationship is the latest to sour, and it looks like this one is probably going to sour for good. In politics, nobody wants to partner with a has been, and with the way JJ routed Karunanidhi and his party, it basically paved the way for a lot of things to happen, such as Karunanidhi's daughter going to jail and now the Marans under the spotlight for corruption. JJ had already set her sights on the financial might of the DMK and the Marans, and is already on the offensive by planning to nationalize cable tv distribution in Tamil Nadu, which till now was effectively controlled by a Maran company.

When everything seems lost, the best thing to do for a good politician is to change the subject. Thus when some people, who may happen to be saffron wearing yoga teaching public figures or khadi wearing social workers or whoever, say that the government must do something on corruption, and give the country some details on the bank accounts of India's politicians and business people, the good politician will basically give it a communal flair and say that they are driven by their Hindu fanaticism.

So as seasoned politicians, the Gandhi minions in the Congress were told that they have crap on them, and they first, refused that they have any crap on them, accused the accuser of having a hidden agenda in telling them that they got crap on them, and then successfully turned around and accused the accuser of having crap on them as well.

Without going into whether Baba Ramdev is right or wrong, or what his or the government's intentions are, I just want to talk about these examples of propaganda that the Indian English media is so good at. Of course, since Baba Ramdev wears saffron, he is quickly painted a rabid Hindu nationalist, and the the Congress mouthpiece NDTV led national media goes all out on showing the communal angle. However, very few television crews actually covered the meeting of Baba Ramdev with Father Dominic and Imam Bukhari when they visited his rally and one of them even hugged him. For all the countless hours that the television crews were buzzing around like flies, apparently just during that meeting they found a pile of dung more smelly to crowd around.

But to any innocent mind who is trying to make sense of the whole situation, the issue gets muddled. Is it merely about calling for action against corruption? No doubt it has taken a much more political, and unfortunately religious turn, but like I said, obfuscating the real issue in question is what seasoned politicians do.

I've come across many people who say that they don't like the Congress, but that they hate the RSS, Modi, etc etc and go into this rant that at least the Congress is not that! So yeah, they want the Congress to pay, but they are not in favor of such "Hindutva forces" coming into power. I am such a rookie that I don't even know what Hindutva forces mean! If a Muslim leader had led the protests, then what kind of political wranglings and media reportings would we be seeing? I actually wish that somebody would be involved who the media and the government couldn't spin into being "communal".

Theres a lot going on in India these days, and it'll be interesting to see what happens. Not just interesting to see, but perhaps even to be a part of! There is one assumption i've been noticing in every political discourse or analysis of events - "public memory is short and they will forget everything." I wonder if this assumption will also go the real estate way. Let us hope it does.

unreal estate

My mind's been so unsettled in the past few days that I have been unable to figure out what I want to write about on this blog. There are a number of issues always going on around me that I would like to comment on, but as it has happened so many times, I begin to collect my thoughts and form the words in my mind on a certain issue but soon descend into thinking of the pointlessness of it all.

There's actually a huge interest in me to write about the real estate market in the country, and the apparent lack of any norms or rules in governing it. It's a good story to write, but I am afraid there are so may angles to it that my utter lack of depth in the subject will be painfully visible. When I talk of the lack of norms or rules, I think what I really mean is the opacity that this market represents, right from how the land prices work to how projects are planned/constructed to how they are sold to the public.

It is this opacity which I feel works in the favor of everybody but the common man for whom a home is still a once in a lifetime investment, and it is of paramount importance to them that they get it right the first time. Unfortunately, real estate has this big dark underbelly where the real estate construction company owners, contractors, local politicians, national politicians, bureaucrats and such control the land and use the laws of the land, or the lack of them, to make a quick buck for themselves.

The Japanese economy tanked because it worked on the presumption that real estate prices just can't fall. Banks lent heavily and big money was spent on construction and real estate, and then the bubble burst, thus leading Japan into a soup which they are still trying to get out of, even after so many years!

The one thing today's free-economy driven world perfectly demonstrates is the axiom that the one thing we learn from history is that we do not learn from history. The US economy then took up the challenge to test the hypothesis that the only way the land prices in their country will go is up. We all know how well it worked out for them and the rest of the world.

Now a lot of stories are doing round today that the real estate market in India is either in the middle of a bubble, or heading towards one, but all seem to agree on one point that some near to medium term correction in real estate prices is definitely on the cards.

There is one very strong feature of the Indian real estate market, in my opinion, that may not be as prevalent in the more developed markets, is that a large number of high end buyers in the country are either speculative buyers or they buy their property as an investment. I believe that a big reason for this is that being such an opaque market, there may be a lot of avenues for high earners to either stash their dirty money, or money that they otherwise would have paid as tax, into apartments and villas and then put it in the name of their wife or son or mother or uncle or whoever.

Now what speculative/investment buying of property does is that in places such as Mumbai or posh parts of the other cities where the land is already scarce and heavily, heavily protected and bargained for, it reduces the already small market of homes available for the genuine buyer who wants to settle down with his/her family. Politicians are big users of this policy actually, and have benefited a great deal from the opacity of the market. An adarsh scam here and there really does nothing to slow down these reckless renegades from seeking out the riches of the real estate market which is into crores and crores of rupees. Add to that the politics and economics of urban slums, and we have this situation where there seems to be absolutely no way forward without one section of the stakeholders not opposing it vehemently.

Nothing is substantiated by proof but there are many stories out there that say that Sharad Pawar, Praful Patel and other politicians purchased huge tracts of land for cheap in the Panvel region of Navi Mumbai in the anticipation that land prices will skyrocket once the new international airport is sanctioned to be built in that area. Then the new airport was sanctioned and the prices did go up by a few times. Its quite true actually, that real estate is a great refuge for a politician's hard earned money.

Coming back to the question of India's real estate sector being a bubble - I believe that whether its a bubble or not a bubble, dirty money will always continue to flow into the sector as long as the laws are not clear and the markets not under scrutiny. But again, it would be wrong for me to say that this side of the sector drives it. I think its still the common man/woman, or the business house that drives the market with their demand for homes and office space. In my opinion, I've been waiting for such a bubble to form, or burst, and see this 15-20% correction in prices for myself. I am not quite sure that happened even during the American shenanigans of 2008, so I am actually a skeptic when it comes to believing in such a bubble.

However, at the same time, its quite possible that the economy and the stakeholders were probably woken up from their "real prices can only go up" dream by the global economic downturn. With rising inflation and prices, and absolutely no fiscal policy so to speak of the government of India to contain it, once again the nation relies on the good old monetary policy by tinkering with the rates. So the interest rates are high, thus taking the cost of a home loan higher and effectively reducing the purchasing power of many a hopeful home owners.

Real estate companies across the country were scaling up on construction by taking a huge amount of debt to build new projects, buy new land and pouring all of it into high-end housing. Then comes all the economic upheavals and at least in my eyes, a lot of demand just shrunk simply on weak global cues. Then came the recovery and the high inflation with it, thus taking the home loans out of reach of many people, and so, a lot of the real estate companies are saddled with a huge amount of debt and a lot of high-end property that apparently not a lot of people are buying. So now a host of companies, including one of the biggest ones in the country - DLF, are selling assets and land to shed this debt. At the same time, they are reaching out to PE firms, which I think may again make them more prudent in their decisions, considering PE firms may be firmer in their terms and conditions and stricter on meeting milestones.

However, this does not really answer the basic question whether such sales will actually bring prices of developed properties down. The interest rates are high, so ideally the prices should come down to stimulate demand. Its so ironic that when I write this, there is a shortage of 24 million low income and lower middle income homes in this country! No real estate company wants to touch this sector in a big way, and only come up with a few projects here and there and tom tom it as their contribution to the society. The UPeeA Govern"mint", well, wants to get rid of slums in the Indian cities so they do what they do best - announce a big scheme named after a member of the Gandhi family. I am still to see how the government proposes to take over the land in such cases. If India manages to provide all families in this country with a home, that'll be a true step forward in our development, but unfortunately, our priorities seem to lie everywhere other than the most basic development indicators such as primary education, housing and healthcare.