February 14, 2019

Speaking at CREDAI YouthCon 2019, in New Delhi

Ms Renu from HDFC, and all the distinguished delegates, the future of India who is assembled here today. And I say the future of India with great responsibility, because truly, I have found a sea change in the way this country thinks, in the way the youth of India behave, the way the youth looks at the future of this country. And over the last three or four years, you have seen a significant change in the mindset of this country.

We all know how our industry used to work before, and it’s not specific to the real estate sector. The overall thinking in the nation was सब कुछ चलता है’, और हम सबने भी, over a period of time, we all got used to the fact that we are going to be required to – in the government parlance, and I am very tired of hearing it, fortunately, people have stopped saying that anymore – ‘we need your blessings.’ You must have heard this sentence, you must have said it many times also. सब आपके blessings लेने आये हैं, रजनीश जी आपके पास भी blessings लेने बहुत आते होंगे।

We have to put an end to that. We need a nation where everybody has an equal opportunity. We need a nation where you don’t have to run to Delhi for environmental clearances, no taxes on environment clearance. We need a nation where a simple thing like slum redevelopment in Mumbai takes 25-30 years to even take off in Dharavi. We need a nation where approvals are in a transparent manner. We certainly can’t have what we have experienced in Mumbai. Since I come from Mumbai, my experience is limited to what I saw, heard, and if I may also say, suffered, in Mumbai.

Probably, the person because of whom I suffered is not in this audience, so I don’t have to worry. But truly, over a period of time, you suffered and we suffered, the nation suffered. Consumers were unhappy, this sector, probably, a few people got great deal of goodies, but as a whole, this sector got a bad name. And I think that had to change. If we have to really have a robust sector, a sector where Reserve Bank of India does not put a condition, warning our bankers that beware of lending to the real estate sector – a sector where we can as consumers trust the persons from whom we are buying property, and a sector where you can trust the government that there is no hidden taxes when you are dealing with government at all levels, right from the top to local bodies.

And I think that’s the mindset change that this government has focused on. I am sure the Prime Minister must have also talked about it yesterday, because truly, from the day he took office, his effort has been that this government will set the foundation for a New India, an India where everybody has a shelter in his head, an India where every home has a toilet, 24/7 electricity, good quality of life, ease of living. And towards that end, it’s not going to be a one-way traffic. It has to be a two-way traffic. We have to deliver on what is our duty, so that you can do your work better, so that you can really help us fulfil these dreams.

And I think these four years may have had some pain points. Any change is difficult in the beginning, it’s not easy to reorient the way business has run maybe for 40 or 50 years. But I am delighted that all of you have participated in that change with enthusiasm, with vigour, at times with a little bit of pain also. But the industry has stood up to the challenge. And I compliment all of you, each and every-one of you and those who are not present here today also for your participation in this effort, for your active involvement, for your blessings to us to make this happen.

In fact, I have had three occasions, the real estate is actually the third, where I have had to engage with different sections of industry to explain the change and explain why the change. The first some of you may recall, because many real estate people are also in the gem and jewellery business, or it’s the other way round, they start with gem and jewellery and then come into real estate. At least in Mumbai that’s what happens.

When we introduced the excise duty on gem and jewellery or the business of gold and all of that, I remember there was a lot of consternation in this sector. You had people going on strike and you had all sorts of difficulties, the sector was feeling as if we have done some great deal of harm to this sector. Our effort was only to bring them into the formal economy and prepare them for an impending Goods and Services Tax, towards which Prime Minister Modi and Finance Minister Shri Arun Jaitleyji were working.

And at that point of time, I distinctly remember one interaction in Jaipur, where I had gone to actually give the awards for those in the gem and jewellery export business. So it was the Gem and Jewellery Export Promotion Council award function in Jaipur. Before we go to any programme, we get a whole sheet of papers, the ‘dos and don’ts’, the ‘what to say, what not to say.’ And my office kept hammering to me that sir, you stick only to the awards, don’t even talk about the excise duty or the problems of the industry. It will open up a big, बवाल मच जायेगा, that’s what I was told.

I speak very long. मैं hesitate कर रहा था because एक बार भाषण देता हूँ तो लम्बा हो जाता है, वहां भी बड़ा लम्बा भाषण हुआ, सिर्फ एक ही विषय पर, एक्साइज ड्यूटी के ऊपर। Awardees को तो congratulate कर दिया पर उसके बाद the only issue I talked about was the impending excise duty, and why we have introduced it and what the thinking in the government is.

I promise you, ladies and gentlemen that throughout that programme – and I was talking about all the difficulties that businesses have had in the past. I was trying to explain to them how an honest future awaits them, awaits good business, will help them promote more business, will improve their rankings internationally, encourage exports. I saw throughout that programme these older people, like Rajni Bhai, were finding it… no offence to you Rajni Bhai, since I know you, मैं recognize कर रहा हूँ आपका presence… the older people in the audience were not smiling. कभी ताली नहीं मारी पूरे मेरे भाषण में, एक बार भी नहीं। पर जितने युवा-युवती थे, all the youth in the audience in Jaipur that day. This is about 3-4 years ago. Everybody was hands-on, full-on excited about it. I could see the smile on their face, the thrill on their face. They wanted to be a part of this effort to clean up the whole systems.

दो-दो बहीखाते, राजस्थान से भी कुछ लोग आये हैं कि नहीं? दो-दो बहीखाते कोई रखना नहीं चाहता, कम से कम हम लोग तो नहीं रखना चाहते हैं, am I right? कि यह कच्ची किताब है, यह पक्की किताब है, अगले दिन पता नहीं कौन सुबह आएगा तो फिर ढूंढना पड़ेगा कि ड्राइवर के घर पर जाकर रखकर आये हैं। Of course, और innovative भी चीज़ें हमने सुनी हैं कि गाड़ी में डालकर गाडी दिन भर चलाते रहो शहर के अंदर।

Older people take a little longer to understand and appreciate, please no offence meant to anybody here, but the youth there was able to understand that what Prime Minister Modi is trying to do is good for India, it’s good for their business and it is good for, I think the consumers that they have and I think it’s good for the poor of India also. Because I did mention, just like I did in the budget speech that what you are doing is helping us serve the poor of India.

The second time I experienced the same reaction. This time the Prime Minister was addressing a huge programme on 1st July, 2017, when we introduced GST, at one of the stadiums in Delhi. He was addressing all the chartered accountants. So, just like this stadium, and it’s right there before my eyes, we had all the senior chartered accountants seated on the floor area, and all the students who are future chartered accountants sitting all round on the stadium. They were not less than 20-25,000 persons in that room that day. Many of you may have seen that programme. In fact, as many people as were inside were outside the stadium, and my job was to try and fold hands and request them to be calm and peaceful, because we just couldn’t accommodate any more people in the hall.

That day the Prime Minister requested the chartered accountants, and I am a part of that fraternity, to now change the way of working and look at a new India in a different form. It was the same story. Every time the Prime Minister spoke about the future as he sees it of an honest India, all the children around the stands were excited, were cheering, were hooting for him, were really going all out with all just as it happened in the budget.

मोदी-मोदी-मोदी, वह सब हो रहा था वहां पर। नीचे बैठे हुए सब चार्टर्ड एकाउंटेंट्स थोड़ा सा परेशान लग रहे थे। In fact, जो उस समय के अध्यक्ष और ज़्यादा प्रमुख नेता थे वह उठकर पीछे आये, backstage, मैं ज़रा पीछे था। They all came and said, यह प्रधानमंत्री जी क्या बोल रहे हैं?

अब समय लगता है पर मुझे लगता है पूरे देश ने यह स्वीकार किया है कि अब समय बदला है, देश बदल रहा है, और मेरा मानना है कि अब जिस प्रकार से देश की सोच बदली है उसमें ईमानदार आदमी को वास्तव में ईमानदारी का उसको लाभ मिलेगा, छटाई हो जाएगी जो लोग गलत काम करना चाहते हैं वह सिस्टम से बाहर निकलेंगे और आप जैसे लोग जो अगली पीढ़ी में एक अच्छे भारत को देखना चाहते हैं, आपका सुनहरा समय अब शुरू हुआ है।

मैंने तो कई interactions में मेरा मोबाइल नंबर भी शेयर किया है और जो मेरे मित्र यहाँ बैठे हैं वह जानते हैं कि चाहे देर सवेर, कई बार बिजी होने के कारण मैं हर एक फ़ोन immediately नहीं रेस्पॉन्ड कर पाता हूँ पर मेरे पास एक भी कॉल ऐसा नहीं होगा जिसको या तो मैंने या अगर unknown number है तो कोई मेरे ऑफिस से फ़ोन करके रेस्पॉन्ड करे।

I think Getamber, Jagse, everybody can possibly vouch for that that there will not be a chance that you will not get a call back. कई बार लोग कहते हैं कि साहब बहुत रेड राज हो रहा है, बहुत तकलीफ हो रही है, notices बहुत आ रही हैं। मैंने कई occasions पर कहा है भाई मुझे पांच तो भेजो? Just send me five notices so I can start taking action on officers, if they are sending it incorrectly or illegally or just to harass anybody.

I have often appealed कि भाई आप जब तक हमारा सहयोग नहीं करेंगे हम व्यवस्था कैसे सुधार सकते हैं। और वास्तव में मैं देख रहा हूँ कि आज के दिन तो शायद कई जगह रिवर्स प्रॉब्लम हो रही है, आप गलत प्रकार का काम नहीं भी करना चाहें तो अब वह ready reckoner rates इतने ज़्यादा हो गए हैं कि आपके लिए मुसीबत हो गयी यही, माल नहीं बिकता है ready reckoner rates के ऊपर।

तो कभी-कभी व्यवस्था ठीक करने जाओ तो उलटी भी पड़ जाती है। तो I have been requesting states, I think थोड़ा देवेंद्र फडणवीस ने भी मुंबई में थोड़ा बहुत right size करने की कोशिश की थी पीछे। और जहाँ-जहाँ ऐसी समस्या है, CREDAI, आप सब हमें बताएं, आप सब हमारे साथ शेयर करें, अब आखिर जो जीएसटी का सवाल है, मैंने तो आपके कई प्रतिनिधि मंडलों से बात भी की है,  माननीय प्रधानमंत्री जी ने आपके प्रतिनिधियों से, with your representatives he has had extensive discussions. The honourable Prime Minister personally has tried to understand and in the interim budget, while we did not change too much, it’s probably the minutest changes that we have brought in. Our real proposals will come in in July, after we receive your blessings.

But the only area that we focused on was the housing sector, the affordable housing sector, in which we made a few modifications. I hope they will help your business. They will help you in encouraging growth in the sector. And most importantly, the Prime Minister, in fact, guided us that we must relook at the GST structure. We have been having extensive discussions. In fact, probably the last time around we would have been able to finalise it, but for some different viewpoints that came out from different sectors.

और स्वाभाविक है, मुंबई में जो बेचता है माल उसकी लैंड कॉस्ट अलग है, जो जयपुर में बेचता है अलग है, कोई चंडीगढ़ में बेचता है अलग है। तो हर एक की अलग-अलग requirements है but somewhere you have to come at a consensus. पर मुझे लगता है जो final consensus, GST Council ने जो कमिटी बनाई थी उसने से तय किया है मुझे उम्मीद है आप सबको पसंद आएगा। अब जल्द ही मीटिंग, GST Council की मीटिंग भी बुलाई गयी है और मुझे उम्मीद है कि जल्द से जल्द उसका भी सलूशन तय हो जायेगा और आप सबको उसका भी लाभ मिलेगा।

हो सकता है आपमें से कुछ व्यक्तियों को, individual cases को एकाद परसेंट कम ज़्यादा लगे उसमें, मेरा आपसे रिक्वेस्ट है कि आप अब एक बार यह तय हो जाये इसको स्वीकार करें और यह आपके हित में इसलिए भी है – और वास्तव में मंत्री के नाते मुझे बोलना नहीं चाहिए – लेकिन आप लोगों के हित में इसलिए भी है कि आपको समस्या से आपको हल हो जायेगा कि लोग आपको परेशान नहीं करेंगे बाद में, for small-small issues – कोई आकर आपकी किताबें ढूंढकर आपने ITC pass on किया नहीं किया, anti-profiteering में तकलीफ देना, यह सब समस्याओं से आपको हल मिल जायेगा। I think वह सबसे बड़ा लाभ होगा इस नई व्यवस्था का।

तो जितना हम सब इस नए रूप से, नए तरीके से काम करेंगे मैं मानता हूँ यह देशहित में भी है, जनहित में भी है और आपके व्यापार के हित में भी है। तो आप सब प्रधानमंत्री मोदी जी की नियत को और उनके कठोर परिश्रम को appreciate करते हैं उसके लिए मैं पुनः एक बार आप सबका धन्यवाद करना चाहता हूँ और स्वागत करता हूँ आप सबका इस नयी व्यवस्था में, इस नए युग में जिसका सबसे बड़ा लाभ भारत की जनता को होगा और जब जनता को लाभ होगा तो स्वाभाविक है आप सबको होगा।

बहुत-बहुत शुभकामनाएं।


Panel Interaction

Good morning everyone. Firstly, thank you sir for your nice address and I think we also would like to thank you for covering real estate extensively in your budget. I don’t think there’s been any budget where we have got so many sops. Since VP sir is coming, and we don’t have that much of time so we will just do a quick Q&A. The first question that I would like to throw open to all three of you, including sir is that India is looking at growing to become the third largest economy in 2030. And the most important ingredient for any growth is finance and its availability. With capital and with banks always being under-capitalized, how do you see that growth being catalysed by finance in the years to come?

  1. इनकी भी बात, इनको एक्चुअली इनसे सुनना ज़रा चाहिए, तो वीपी साहब के प्रोग्राम के बाद चाय का अगर ब्रेक हो तो आप रुकिए, आप दोनों रुकिए इनकी बात सुनिए, आज तकलीफ है पैसे की, रियलिटी तो यह है।

So let’s not beat around the bush, good projects, this that, everybody had started with a good project. Over a period of time, some of them got into difficulty. I think your delegation should also interact with Reserve Bank, should also interact with all the bankers. आप IBA की कोई मीटिंग में इनकी एक प्रेजेंटेशन करवाइये।

They are associations, they are senior people, please ask them to come to an IBA meeting. Let all the bankers hear them. There is a real problem, and we will have to find innovative ways for – again, as she rightly said or you rightly said, good projects. We will have to differentiate the wheat from chaff, the grain from the chaff, but what we have to do is seriously have some kind of a drive, have some kind of a period where all across the country you assess these projects on a fast track basis. You can’t have six months, eight months taken to assess each project. Half the projects will become sick because of that. If there are genuine reasons that have happened then possibly you will have to look at some innovative ways to address that. And if you find somebody has layered too many projects, doesn’t have enough equity then you take him to the cleaners also, I don’t think anybody here will mind. If somebody has misused the system, has layered or if you get an ILFS-type story where the equity is hardly there and only dead, or diversion funds is, let’s say beyond reasonable. I don’t mean diversion in the sense that taken our money, I mean, suppose एक ज़माने में पहले कोई लोन लेता था, कुछ पार्ट से दूसरा लैंड का पीस ले लिया. You mortgage that land, you take that land, you find ways or asking him to sell that other piece of land and bring back the money into the project.

But somehow, I think in the next fifteen days, you must have a dialogue with them. If possible in the next seven days. आप लोग भी, प्राइवेट सेक्टर भी उसमें इन्वॉल्व हो because you all have more flexibility than us, the PSU banks. तो मिलकर let us find a solution so we can kick-start affordable housing, we can kick-start businesses which are genuine and whoever you find has cheated the system, just separate that, उसकी वजह से सबको बदनाम मत करिये.

  1. Sir, thank you again for this. I think that has been our industry ask for ever. And I am very happy that you have made that statement and I am sure we will all follow up with them and we will have that meeting with the IBA, time-bound. I just have one more question to continue. Sir, 40% of our project cost goes in funding land and approval expenses, which banks technically are not allowed to fund, and equities sir, like you said, is too expensive to make housing affordable. How does one make affordable housing matter in today’s times if these are the kind of structures that we have to work with? And also sir, we need another avenue for equity, which I don’t think just the private players should be there, we should get, like if you see the infrastructure companies …..

Sir, prior to Lehman, when we had written to RBI as CREDAI, we were told that prior to 2008 RBI could allow banks to fund land, but once Lehman happened, they said no for that.

  1. आप लोग भी विचार करके कुछ सोचिये कि इसका क्या तरीका हो सकता है जिसमें मिसयूज भी न हो, as he said, speculation भी न हो लैंड के ऊपर। So, what happened in Noida, for example. Noida, there are some flats, people are suffering, people over leveraged. They got land at 5% down payment from the local authorities. Of course, 5% official down payment, उन दिनों में तो, गीताम्बर किधर है? चला गया? तो हमने उसको तो बदलने की कोशिश की, आज कल वह चीज़ें नहीं हो सकती हैं तो शायद बदले हुए परिप्रेक्ष्य में आप लोग फिर से एक बार इसको पुनर्विचार करिये। और यह बात भी सही है, appreciation of land cannot be considered as collateral. Don’t take appreciation of land as collateral. There should be genuine equity in the project, and particularly, land which is brought on instalments, in effect, it’s a loan only. It’s a funding. The local body when they give it at 5-10-15% down payment, it’s a loan.

So, I think you will have to have a balanced approach. But, again as they both rightly said, आपको दामन साफ़ रखोगे तो बैंक को तकलीफ नहीं होगी, जब आप over-leverage करते हो, एक प्रोजेक्ट से पैसा निकालकर दूसरा लैंड, तीसरा लैंड, बैलेंस शीट बनाना, स्टॉक मार्किट में प्राइस बढ़ाने के चक्कर में रहते हो तो तकलीफ आती है। पर फिर भी चाहिए तो CREDAI के अंदर एक छोटा ग्रुप बनाइये, चार-पांच ex-bankers, या कोई सीवीसी वगैरा के लोगों को बिठाइये उसमें जो अगर किसी के साथ ऐसी महसूस होती है किसी को कि बैंक हमारी सुनवाई नहीं कर रहा है या बैंक हमारे का ठीक से ट्रीट नहीं कर रहा है या हमारा जेन्युइन केस में हमें फंडिंग नहीं मिल रही है, उस ग्रुप के सामने रखें,  that group can meet once in a week or twice in a week in different cities. Local real estate people who have a problem can present before that group, and if that group feels that yes it looks to be a genuine case, after studying their project and the background of the promoter, then maybe they can put it up to the lead bank of that state or of that district and our bankers may be asked to look at it afresh.

  1. We will do that sir, it’s a very viable roadmap that you are showing to us. We will work on that and come back soon. Sir, yesterday, honourable Prime Minister pointed out that our industry is really a mother industry, creates employment and far-reaching things that we have even not thought. He said कि दूध वाला दूध देने आता है, अखबार वाले को रोज़गार मिलता है, you know, he went to that level. So, while we understand that we are a huge employment generator for the sector, to be honest, there is a lot of despondency among lot of our brothers over here कि मार्किट ख़राब रही है, माल नहीं बिका है, and all those kind of things. What would be your advice, and I would want all three of you to give your advice to our fellow brothers in real estate sector, how should they see their sector over next decade or two. What do you think the future holds for real estate sector in India for next two decades?
  2. देखो, सबसे पहले तो यह जो ‘माल नहीं बिका’ और यह सब तकलीफें हैं, इसमें दो पहलू आप लोग भी देखिये ज़रा अपने। …. में देखना पड़ेगा। एक तो लीगली सब कंस्ट्रक्ट हुआ है और ओसी है कि नहीं है यह आज कल जनता बहुत समझदार हो गयी है। अब आप लोग कुछ भी बनाओ, आधा-अधूरा बेच दो, रेरा रजिस्ट्रेशन ठीक से नहीं हो और प्लान्स थोड़े गलत अप्रूव कराकर बना दिए हों जिसमें ओसी में तकलीफ आएगी तो ज़रूर माल नहीं बिकेगा ऐसे भी बहुत केसेस हैं। और एक दूसरा जो पहलू आपको देखना पड़ेगा रेट पकड़कर बैठे हैं कई लोग, अगर रेट कम हैं और मार्किट डाउन है तो उसको पकड़कर बैठना कभी लाभ नहीं देता है, ब्याज का मीटर भी चढ़ रहा है। उलटे एक पीछे मुंबई के डेवलपर ने मुझे बोला मेरा माल ही नहीं बिक रहा है, 2000 करोड़ रुपये का माल है। मैंने कहा तो how do you service your bank? He said, I am debt-free, I am not concerned. I said फिर तो तुम अक्लमंदी का सोचो, 2000 का चाहे 1500 करोड़ में, चाहे 1200 करोड़ में, जो दाम पर बिकता है आज बेचो और आपको इतनी opportunities मिलेंगी जिसके हाथ में आज रोकड़ा, कैश है, मतलब cash in the bank है, जिसके हाथ में बैंक में पैसा है he can buy ten other projects worth 10 other projects worth 3000 crores out of that money, तो please start selling, रेट मत पकड़कर बैठो।
  3. Just one thing Mantriji on this, honestly, आपने बोला है, so I don’t want to repeat it, आपने आलरेडी बोल दिया जीएसटी का, जो भी आप कर रहे हैं जीएसटी पर ज़रा शीघ्र कीजिये, आज कल the normal person is waiting कि अभी it’s going to come down. They don’t want to pay the GST, they are saying that when the apartment is ready तब मैं खरीदूंगा तो मेरे पैसे बचेंगे, जो भी ना कहना है ना कहना है, हाँ कहना है तो हाँ। Just do it fast.
  4. Of course, that’s a good takeaway for me, शीघ्र करेंगे लेकिन एक अच्छा हो गया कि मेरे को एक कैंपेन मैनेजर मिल गया, चुनाव के लिए I will have to take in Renuji into the campaign. But it’s a good point, मेरा आप सबसे एक अनुरोध है आप देश भर के अलग-अलग जगह से आये हैं आप भी अपने स्टेट्स में लोकल गवर्नमेंट को अगले तीन-चार दिन में बात करके उनका भी मन बनाइये नयी व्यवस्था के लिए, ठीक है? You will have to talk to your states.

Ladies and gentlemen, can we have a standing ovation for our speakers. I think it was a highly educative and stimulating session sir. Thank you for your positivity sir.


























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