Future facts

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Future facts

2006 having faded into history, all eyes are now fixed on the year that has begun to roll. How will the trends of previous years impact reforms, real estate, telecom and investment in India? A factual look-in into indicative fragments of the 2007 jigsaw.

CJ: Team merinews

Tue, Jan 09, 2007 00:00:00 IST

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Economic Reforms

With governance now having become the norm under coalition governments, the pace of economic reforms is unlikely to pick up in 2007 from the slow and steady pace it has settled to.
With many states in for Assembly elections, political priorities are likely to override the reforms agenda. With more elections to come in the next couple of years, political parties would be more vote-obsessed than growth-oriented. The Assembly elections falling in 2007 is likely to set the ball rolling for populist announcements and schemes.
The battle over conversion of farm land into industrial land is likely to intensity in 2007, further hurting reforms and ambitious projects like SEZs.

Real Estate

The 30-50 per cent per annum increase in property values of previous years are unlikely to be repeated in 2007.
In 2007, investments is likely to be greater in the area of finance than land.
Indian real estate firms are looking to raise nearly Rs 22,500 crore through IPOs in 2007.
Increased flow of FDI is likely to cross the present $1 billion to reach $4.5 billion.
Oversupply could force a property price correction in 2007 in the escalating price zones of Gurgaon, Bangalore and Chennai. Residential property prices in these cities are estimated to fall between 10 and 30 per cent.
Property developers could be adversely affected in 2007 owing to rising debt cost and hike in interest rates. This may force developers to seek foreign equity, leading ultimately to better quality.

Telecommunications

Telecommunications services and socio-economic growth are inter-linked. According to studies, a 2 per cent growth in teledensity reflects a 3 per cent growth in economic development like eHealth, eGovernance and eEducation.
Telecom penetration in rural India remains a meagre 2 per cent. Data connectivity is yet to make inroads in the Indian hinterlands.
India has about 7 million Internet users and 1.3 million have access to broadband services. The government had set a target 20 million for 2010. The present figures are way off the target.
Private telecom operators serve more 100 million consumers.
Failing in the onerous task of hardwiring the country’s 3.2 million square kilometers, India has now the option of using next-generation broadband wireless technologies like WiMAX. WiMax. These technologies will allow the country to make a quick and cost-effective switch from voice (2.5G) to voice/data/video/TV (4G). WiMax, a global standard technology, can help provide wireless broadband access in both urban and rural areas.
There are more than 130 million mobile phones in India against less than 20 million PCs, which are restricted to educated elites.
For WiMax to function effectively, the government would have to make 2.5 GHz band spectrum available to service providers.

Investment

BTS Investment Advisors, a Swiss private equity company, foresees profitable investment opportunities in 2007 in Indian in pharmaceutical, engineering, entertainment and technology companies, plant genetics and telecom support infrastructure.
BTS calculates 30 per cent annual returns from its new investments in India.
BTS has so far invested $1 billion in India.
The Swiss firm has invested in 19 Indian companies and has an average return of 22 per cent in dollar terms.
Private equity investment in India, Asia’s fourth-largest economy, stood at $7.46 billion in 2006, up from $2.26 billion in the previous year.

[The above compilation is based on published media reports]

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Posted comments (2)

	The statement udner the heading "Economic Reforms" about various political parties being more vote obsessed rather than growth oriented in 2007 due to Assembly elections falling in 2007 suggests that our country has suffered progressive reforms in the past because of this single factor -the current phase of reforms could get a jolt due to elections is to be taken seriously. Our Hon'ble President has repeatedly suggested that Parliamentarians should devote 70% of their time to developmental politics and only 30% to political politics (jursi bachao. Many of us would be happy if the parliamentarians devote 90% of their time and efforts in developmental politics and only 10% in political politics (kursi bachao). Once development gets a jolt, it becomes that much difficult to again give it a momentum / push and in the process too much time, energy and ..gets wasted.
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