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MAY 7, 2006
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Insurance: The Challenge
India is poised to experience major changes in its insurance markets as insurers operate in an increasingly liberalised environment. It means new products, better packaging and improved customer service. Also, public sector companies are expected to maintain their dominant positions in the foreseeable future. A look at the changing scenario.


Trading With
Uncle Sam

The United States is India's largest trading partner. India accounts for just one per cent of us trade. It is believed that India and the United States will double bilateral trade in three years by reducing trade and investment barriers and expand cooperation in agriculture. An analysis of the trading pattern and what lies ahead.
More Net Specials
Business Today,  April 23, 2006
 
 
In The Zone
City planners, clearly, aren't. Delhi, today; the rest of the country, soon.
Locked out: But where is the space to set up shop?

It has three layers of government and two municipalities looking after it, but Delhi remains a showpiece of how not to approach urban planning. If the last controversy concerned lal dora (red boundary line) land, which once belonged to villages, but was now being used for non-agricultural purposes, then the current one has to do with rampant commercial activity in residential areas. That's a malaise every Indian city suffers from. The power, water, sewerage, and parking infrastructure of residential neighbourhoods aren't equipped to support commercial activity, other than a few shops.

That could explain why Resident Welfare Associations (RWAs) rejoiced when the Supreme Court ordered on February 16 that commercial establishments in residential areas be shut down. The Supreme Court's order came at a time when the Municipal Corporation of Delhi (MCD) was complying with a Delhi High Court order asking it to demolish buildings that had violated building laws.

Since then, MCD has sealed over 5,000 commercial establishments, including those in tony boroughs such as Defence Colony, South Extension and Greater Kailash. Over 21,000 owners have filed affidavits, promising to shut down their businesses in residential areas by June 30, the deadline fixed by the Supreme Court. And politicians, and the state and the central government are trying to find a way around the court's order.

"The MCD action will affect business worth Rs 30,000-35,000 crore annually," claims Pravin Khandelwal of the Confederation of All India Traders' Associations (CAIT). He also claims that the Delhi government lost Rs 1,500 crore in vat revenue in the fortnight since March 29, the day mcd started sealing shops. "That is not to mention the 5 lakh traders whose businesses have been endangered and their 25 lakh workers whose livelihoods are at risk," he adds.

The main grouse of the traders is that there is no commercial space to be had in the city. "We are prepared to move, but where?" asks Murali Mani, a restaurateur who runs an outlet in the crowded Karol Bagh area. The central government has admitted to the Supreme Court that the development of commercial space in Delhi has not kept pace with demand. "The government will eventually have to regularise unauthorised commercial buildings in residential areas to make up for the crunch in commercial space," says Anshuman Magazine, Managing Director, CB Richard Ellis, a real estate firm.

With commercial property prices in Delhi appreciating by over 40 per cent ("The ongoing crackdown has been a factor behind that," admits Sanjay Verma, Joint Managing Director, Cushman Wakefield, another real estate firm), the central government, which owns and distributes all land in Delhi through the Delhi Development Authority, is inclined towards a liberal mixed land use policy.

"Mixed land use is actually good planning. It integrates all the elements of urban planning and efficiently brings together the services needed by residents of a neighbourhood-shops, parks, community centres and entertainment," says Swati Ramanathan, a Bangalore-based urban planning expert and founder of Janaagraha, a citizen's organisation. She believes that the rub lies in the fact that municipalities and other bodies managing the cities are totally unaccountable to the citizens; ergo, plans do not get enforced and corruption is rampant. "The fact is that illegal constructions and land use conversions are rampant in all Indian cities, including Bangalore. The fault lines are there; it's only a matter of time before they cause the 'earthquake' that Delhi is going through," she adds.

That, though, doesn't mean the government is thinking long-term and nationwide. "Urban development of cities is a state subject," says Union Minister for Urban Development S. Jaipal Reddy. "No changes are expected in the nationwide rules as long as there are no objections to the mixed land use in the states."

 

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