IT scouts for realty

Information technology revolution, which started with a roar in Punjab has ended with a whimper owing to shortage of land, notes Chitleen K. Sethi

And here is where the story of Information Technology revolution in Punjab seems to have ended.

IT remained Punjab Government’s buzzword for five years and was projected as the biggest achievement of the Congress in the state.

  • 2002: Quark Media House sets up base in Mohali
  • 2004: Quark City launches industrial park in Mohali
  • 2005: Dell opens customer care centre in Quark City
  • 2006: HCL logs in Mohali

Mohali was put on the world IT map. The requisite hype was generated and everyone was waiting for the inductive effect to set in. It did set in, fortunately for the state, but only to come to a grinding halt. Just when the biggest names in the business began giving Punjab a second look, the state realised that it had no land for these companies to set up base.

Wipro, the IT giant, has, for the past two years, been waiting for the state government to hand over to them a promised piece of land. Wipro had asked for over 100 acres and was given about 40 acres in Mohali.

Similarly, Tata Consultancy Services has been waiting for their proposal to see the light of the day. The government had promised 25 acres.

These two companies might also have been the last to be promised government’s own pre-acquired land. With governments finding it more and more difficult to acquire land for its projects, the future - for the good or the worse - lies in peculiar public-private partnerships with the stakes tilted obviously in favour of whosoever owns the land.

The Punjab government bent backwards to invite Quark to Mohali, justifying the extraordinary exemptions given to the company by saying that these were required to be given for the IT boom to acquire “critical mass”. The company opened Quark Media House, a software development company and in the process also got government land for an Industrial Park- Quark City- on 45 acres in Mohali. This is what happened in the past. Punjab’s message to IT companies is now clear - buy your own land at market price and the government will facilitate the project.

Satyam has asked for 200 acres of land from the state, but unable to give them such a large chunk, the government is now convincing the company to buy its own land. “The government does not have large pockets of land. But there is a lot of private land these companies can buy. And why just in Mohali? We suggest these companies to look at other places. It could be Jalandhar where VSNL has set up an earth station and an IT getaway. Even Amritsar is a good bet because of the international airport,” says RK Sangwan, Executive Director, Punjab Infotech Limited.

Sangwan says there is a space crunch only for those companies, which wanted to set up their campuses, but for IT companies who want built up space there is enough. “As many as 13 IT parks have been approved by the state’s empowered committee. These parks can provide ample space. We are asking the IT companies that approach us to get in touch with private IT parks for their space requirements,” says Sangwan. Other than Satyam, talks with Cognizant and Genpact have reached final stages, he adds.

The government has given seven acres of the 15 acres it owned in Sector 67 Mohali to seven companies. Delhi based KMG Infotech, Sebiz Infotech, HCL, Competent, IDS, Dr IT Planet and Debon Software Solutions will be opening their centres here. Second Foundation and Inde Sigma managed to open units in Mohali shifting into already built-up spaces.

But there have been precious losses too. Not too long ago companies like IBM India, CISCO Systems, Oracle India, Flextronics Software, Motorola India, Tandon Computers and Headstrong were immensely interested in coming to Punjab. Sources pointed out that many of these companies have lost interest and set up bases elsewhere.

“Till Punjab creates a land pool, specifically for IT companies, this is bound to happen. The state has immense scope to become an IT hub and potential is just beginning to be realised. The government should not let the hype die down and give prime importance to the land issue,” says Sanjay Tyagi, Director Software Technology Parks of India, Mohali.

While Punjab surpassed its’ neighbouring states in the rhetoric, its actual performance as compared to Chandigarh has remained low. However, due to the presence of larger companies in Punjab, the quantum of software exports from Punjab was almost five times than that of Chandigarh.

But this figure is also set to change. Infosys, responsible for the largest quantum of software exports from Mohali, has decided to shift its unit to the city’s glossy IT Park.



…elsewhere, Karnataka tries to retain industry with land offers

The Karnataka government is offering land and other incentives to investors to set up IT firms in smaller towns and cities beyond Bangalore in a bid to ensure that the state remains a prime destination in the knowledge sector.

“We are working on a hub-and-spoke model to attract investments in the knowledge sector with a two-pronged strategy. By positioning Bangalore as the hub and tier-two cities across the state as spokes, we want to ensure Karnataka remains the favourite IT destination in India,” state Information Technology secretary M.N. Vidyashankar said.

“The new strategy will also help decongest Bangalore and facilitate the uniform growth of secondary cities like Mysore, Mangalore, Hubli, Belgaum and Gulbarga with infrastructure, connectivity and human resources,” the official said.

With Bangalore remaining the hot destination for IT investors, especially multinational companies, the government has set aside a massive 10,000 acres of land at Bidadi, about 30 km from the hi-tech city, for a planned Knowledge City with world class facilities.

The land has already been acquired and earmarked for IT and IT-enabled services, including outsourcing and call centres.

In all, 32 infrastructure players, including foreign firms, have bid for the global tender floated by the government. The bids will be opened in the next two months, Vidyashankar said.

A second project has developed around the upcoming international airport at Devanahalli, 35 km from here, with the Karnataka Industrial Development Board in the process of building an electronic hardware technology park over 1,400 acres of land near the airport.

The first phase of the park, spread over 450 acres, will be developed in the next 12 months to coincide with the launch of the Bangalore international airport in April 2008.

The state IT department is also helping academic-cum-industry majors set up ‘IT finishing schools’. The idea is to spread employment by training engineering graduates from towns and rural areas, who will then be placed directly in software and hardware firms across the state. — IANS



A house on high seas

Bored of living in palatial bungalows and posh apartments and want something unique? Cheer up as you may soon have the option of ‘buying’ a house on the seas.

A leading hotel chain has announced the sales launch of the residential vessel, offering 112 fully-owned private homes with options of one to four bedrooms.

With price tag starting with a whopping $3.8 million, the 48,600-ton, 719-foot luxury vessel, the Four Seasons Ocean Residence, will feature almost all amenities and luxuries that one can think of.

Promoted by BV International Ocean Holdings Ltd., a joint venture between Bayview Financial and Ocean Development Group, both US-based companies, Four Seasons Ocean Residence claims it will provide owners with an unparalleled home and travel lifestyle.

The ship promises an array of onboard activities and entertainment. The first journey is scheduled to depart in 2010, with the first two years following a fixed itinerary. — PTI



TAX tips
Possession, not registry, decides rental tax issues
by S.C. Vasudeva

Q. I acquired a house property for a sum of Rs 45 lakh. I paid the full consideration in terms of an agreement to sell and have taken the possession of the said property. However, the sale deed is yet to be registered on account of some legal formalities required to be complied. Meanwhile I have let out the property at a rent of Rs 50,000 per month. Am I supposed to pay income tax on the said income? I think I should not be liable as I am not the registered owner of the property as yet.

— Radhey Shyam, Phagwara

A. Section 27 of the Act provides that a person who is allowed to take or retain possession of any building or part thereof in part performance of a contract of the nature referred to in the Section 53A of the Transfer of Property of Act, 1882, shall be deemed to be the owner of any part of the building or part thereof. In view of the above position you would be a deemed owner of the property and liable to be taxed in respect of rental income even though you are not registered owner of the property.

Rural property

Q. I have some landed property situated in Burdar village (Ropar dist), which is outside the municipal corporation/cantonment board, and the land is not cultivable. I am a retired professor of PAU and want to sell this property. The amount I will be receiving through the sale of this property would be around Rs 10.5 lakh. Further, I am getting pension of Rs.2.4 lakh per annum. Kindly advise me on the tax liability on the amount received from the sale of this land.

— C.S. Malhi, Ludhiana

A. An agricultural land is considered to be a capital asset if it is situated in an area within the jurisdiction of the municipality or cantonment board etc; or within such distance not being more than 8 km from the local limits of municipality or cantonment board etc; as may be notified by the Central Government. The areas so notified are considered as urban areas. The notification no. 9447 (F. No. 164/3/87-ITA-1) dated January 6, 1994, issued by the government specifies the following area in case of Ropar which would be considered as an urban area.

“Areas falling within one km on either side of Ropar - Bela Road up to a distance of 2 km from municipal limits on that road.”

Therefore the land falling beyond the aforesaid limit would not be considered a capital asset and the amount of capital gain arising on the sale of such land would not be taxable.

I may add that it is not possible to compute the tax liability arising on the sale of the agricultural land (presuming that the same is a capital asset in accordance with the notification as aforesaid) as you have not indicated the cost of acquisition of the land. You would be liable to pay tax on the pension income of Rs.2.40 lakh. The tax payable on an amount of 2.40 lakh would be Rs11,220, including education cess in case you are 65 years or more. In case you are below the aforesaid age, the tax payable would be Rs 23,460, including education cess.

Partners demise

Q. We are two partners in the firm carrying on a business of manufacture of nuts and bolts. The firm owns a factory building and has a considerable value. My partner died in March 2005 and by virtue of the terms of partnership deed I became the sole proprietor and have been carrying on the business in that capacity since then. The assessing officer has held that on the death of one of the partners there has been dissolution of the firm and in the process levied capital gains tax on the capital assets of the firm. I have taken up the matter in appeal. Please be kind enough to let me know whether the stand of the department is correct?

— K.S. Gill, Dharamsala

A. The Madhya Pradesh High Court in the case of CIT vs. moped and machines (2006) 281 ITR 52 (MP) had the occasion to consider a case of similar nature. The assessee was a firm that consisted of two partners R and P. P expired in April 1990. The assessing officer held that since the firm stood dissolved after the death of one of the partners, the firm was liable to pay tax on capital gains. The lower appellate authorities did not accept the contention of the AO and the assessee were granted due relief. The department took the matter to the High Court and the Hon’ble High Court held that in instant case there was no transfer of assets within the meaning of Section 45(4) of the Act. As per the aforesaid case, you should be able to succeed at the first appellate authority itself.

Compromise sum taxable

Q. I have inherited some property from one of my distant relations who had no other legal heir. However, one of the persons claiming to the legal heir filed a claim for title to the said property. I made compromise with him and paid some money so as to buy peace, though I know that he had no case and his petition would have been rejected in the long run. I intend selling the said property. Will the amount paid for compromising a suit be allowed as deduction against the sale consideration?

— Manoranjan Singh, Hoshiarpur

A. The Madras High Court in the case of CIT vs. Indra (119 ITR 837) had the occasion to decide an issue of the similar nature. The court held that where the assesses had paid an amount to improve his title by compromising a suite filed by disputant claiming title to the property, it could not be considered a cost of improvement of an asset, and therefore, would not be deductible for the computation of capital gains. In my view therefore the amount paid by you would not be deductible against the sale consideration.

The writer can be contacted at [email protected]



Look beyond the glass facade

Architects and realtors argue on eco-friendly aspect of glass buildings, says Snehesh Alex Philip

As the country faces acute power shortage and global warming debate hots up, energy conservationists caution against growing number of buildings with glass façades dotting the landscapes of cities as being responsible for energy consumption much in excess a normal structure would do.

Real estate developers, however refute this.

“If you see the structures that have come up recently, they are all mostly made of glass. Right from top to below, you can see huge shining glass. Though these buildings look contemporary and stylish, they are the biggest culprit when it comes to energy consumption,” says Harsh Narang, Director, Modern India Architects.

“Glass building are very European concept because they don’t get much sunlight. Hence, their main aim is to get maximum sunlight. But, in our country where temperatures at times go as high as 50 °C, these glasses take in more of sunlight.

Hence the offices use more air-conditioners directly resulting in higher consumption of electricity and also in the form of carbon-dioxide emission and also CFCs that air-conditioners generate causing damage to the ozone layer,” he adds.

According to a study conducted by the Chartered Institution of Building Services Engineers, London, a complete glass building consumes four times more electricity than a normal building.

“The logic being that since the glass is transparent, higher amount of infra-red radiation comes in. They are short-wave radiation when they enter but the moment it enters the room it becomes long-range radiation. Hence, higher capacity air-conditioner is required to keep the indoors cool. India is a tropical climate and these glass building are just not suitable,” Meenakshi Dhote, Assistant Professor, Department of Environment Planning, School of Planning and Architecture, Delhi, says

However, real estate developers refute all such charges. “Such arguments are totally baseless. If the glass is provided with ‘U’ factor, then it can stop a major portion of radiation from coming in. Moreover, there are also various kinds of glasses that can be used, like double glass which are also very helpful,” says K.K. Bhatacharya, Executive Director, DLF, a major real estate developer using glass as a key component in construction.

“The glass saves lot of energy too because the offices would be less dependent on lighting and hence save on electricity. If the architecture is done in such a way that not much of sunlight falls on these glasses during the peak time, it can also cut down on the radiation effect. Moreover, ACs are used only for few months,” he adds.

According to sources in The Energy Research Institute, (TERI) which has done extensive study on glass building and energy consumption, the proper or optimal use of glass can cut down on energy demands by at least 10 to 15 per cent of a normal building.

“Glass allows in direct radiation and direct radiation is 80 per cent of the total heat generated. Hence, the usage of AC increases meaning which more power is used leading to more shortage,” says a senior official of TERI.

“Glass structures are just not viable in a tropical country like India,” he adds.

Other architects point out that since the focus is now on large glass building, there is very little chance of designing a glass building facing no direct sunlight.

The government has also understood the role played by such glass structures in guzzling higher energy and also contribution to global warming. According to the recent, Energy Conservation Building Code, future projects can have not more than 40 per cent of gross wall area as glass, the official says.

Other countries are also taking initiative in this regard.

Even the main issue for discussion at G8 Summit held recently in Berlin was global warming.

The Chinese state council has recently ruled that air conditioning must be 26°C max in China’s public buildings, a move to cut down on power consumption.

Experts point that the main reason why developers still use glass for many of their projects are because of the cost as well as time factor. “There is no doubt that glass structures take less time to construct unlike a normal structure,” says Bhatacharya.

“Though, these glass structures come up very quickly and are also cost effective other than looking good, such building are a major cause for higher consumption of electricity. With cities facing electricity shortage and rising temperatures, such structures add to the woes of everyone,” says Narang. — PTI



Estate talk
Ride not smooth for infrastructure sector players
Peeyush Agnihotri

Indian infrastructure sector presents contradiction of sorts. Though the government projects a total fund flow of $456 billion in the 11th Plan (2007-12) to boost the country’s infrastructure, yet the sector faces some inherent hassles.

This is the gist of the views expressed by Rafi Qadar Khan, General Manager, DS Constructions.

“Currently the industry faces numerous issues that are hampering growth of the sector. There is a wide gap between awarded/proposed projects and bankable projects. Additionally, high resource requirements of the construction industry are not matched by the availability of finance. The high cost of raising finance eventually translates into higher costs. Appropriate measures and instruments should be formulated and implemented to reduce financing costs and ease the flow of funds to the industry,” Khan says.

“One of the most pressing issue affecting the timely development and execution of roads and highways projects is the delay in land acquisition and obtaining statutory clearances from numerous bodies. This results in delays in the execution of the project and increases the cost of building a road network in India. The project developers’ resources lie idle resulting in huge losses and more often than not, give a bad name to the developers even though land acquisition or obtaining statutory clearances is not their forte/responsibility,” he adds.

DS Constructions is currently executing the country’s longest (135.6 km) Western Peripheral Expressway, also known as the Kundli-Manesar Palwal Expressway, worth Rs. 1,915 crore.

Disclosing north India plans, Khan says Punjab is an important state for them. “We are keenly following the developments in the infrastructure sector in the state. We are bidding for two 1,200 MW thermal power plants in Punjab,” he says.

Advocating single-window clearance for projects, he says obtaining clearances on model and design of certain roads and highways from multiple authorities often results in delays in implementation of projects.

“Project-awarding bodies should stick to the original design and not alter the design of projects once it has begun. This leads to delays and cost escalations,” he says.

Khan says the issue affecting most developers at the company level is the lack of skilled technical manpower.



Steel deal

Jagvir Goyal provides tips on how to lend strength to buildings

Photo: Malkiat Singh
Photo by Malkiat Singh

The activity of cutting steel bars to required lengths, bending them in required shapes and then laying them in a correct manner always weighs heavily on the minds of a house builder. Here is a 10-point guide to take control of this important activity and finish it in a perfect manner:

Bending schedule

Make a schedule of various lengths of steel required for RCC work in slabs, beams, columns and lintels. Some lengths are straight, others cranked and some are in shape of stirrups. Find straight length required for each type of bar. Assign a code number and find the required numbers for each diameter and each code. Thus a bar cutting and bending schedule is ready. Make calculations to work out required steel lengths for each diameter. Bars available in the market vary from 9 to 12 metres. Choose the lengths required by you. This exercise will minimise the wastage of steel and you will not be left with many cut pieces. Ask bar binder to first cut the bars to required lengths and then to give required shape to each kind of bars.

Laps provision

Many times, steel bars of required length are not available and two bars are to be laid to cover full length or breadth of a room. Sometimes, in order to utilise bars of smaller lengths and avoid wastage of steel, we lay two or three bars along a length. In both cases, overlap of the two steel bars is a must. Suppose you need to lay bars of 15 feet length and only 10 feet long bars are available. Thus two bars will be required to cover the entire length of 15 feet. For this, you can’t lay a bar of 10 feet length and another of 5 feet length ahead of it but the two bars will require certain overlap for transfer of stress from one length to the second. These overlaps are called laps in steel. The length of these laps varies for bars in compression and tension. However a lap of 50 times the diameter of bar can be safely provided in all cases. For example, for 10 mm diameter steel, give a lap of 500 mm length.

Distribution steel

It is often asked why the steel binders, called distribution steel, are put in the slabs when these are not designed to carry any load. Distribution or secondary steel or binders help in resisting cracks due to temperature and shrinkage stresses. Therefore, never avoid this steel. See that distribution steel is at least 25 per cent of main steel.


Take special care of position of reinforcement in cantilever slabs. In cantilever slabs, steel must be at the top face and not at the bottom as in normal slab. Bottom steel coming from main slab to the cantilevers must be cranked up to remain at top and steel chairs made of small cut pieces should be provided below it to support it. Take care that labour movement does not settle the steel from top to middle or bottom. If it happens, cantilever slab or chajja will fail and fall down either on removal of shuttering or sometimes later. Make proper arrangement for movement of labour. Get made a few steel or wooden counters of height just more than the slab thickness. Further see that these are so made that these can be rested well in the slab steel grid without pressing the steel. Put GI sheets or bamboo challis over them. Labour force will then be able to move freely without disturbing steel reinforcement.

Cut pieces

Whatever cut pieces get generated during cutting of steel, convert them into supporting chairs and spacers. Do not insert these cut pieces here and there in the slab. Most of the masons do so by saying that it will further strengthen the slab. Such cut pieces provide no additional strength. Make Z type chairs and spacers of them and tie them at regular intervals below the top steel to avoid its sagging under the weight of concrete being laid.

Upside down

There are many cranked bars in beams and slabs, which are bent as per drawing by the blacksmith and stacked aside. While placing these bars in position, it has been seen that sometimes the bars gets placed in upside down position. This is a dangerous situation and such beams or slabs may collapse any time. A simple check for correctly placed steel is that the cranked portion of bars of slab should be above the walls while straight lengths should be at the centres. Similarly, cranked length of bars in beams should be at ends and straight lengths at the centre of beams. It shall be better if you ask a qualified engineer to have a look at the laid steel before pouring concrete in position.

Cutting activity

While the steel bars, up to 16 mm diameter, can be cut to size by a chisel, bars of 20 mm diameter or more may need gas cutting. Ask bar binder to bring it one day and finish all gas cutting work that day. Take care that bars are bent cold to shape and avoid their heating up to ease bending. Bars of exceptionally high diameter, say above 32 mm, may however, be heated up for bending them to required shape, if unavoidable.

Binding wire

Use soft iron binding wire for binding of steel in position. Soft iron wire does not break up during bending around the bars. Choose 16 or 18 gauge wire. Ensure that it is rust free. Mostly it is available in bundles of small pieces each having sufficient length to tie two bars. While binding the steel, ensure that the loose ends of binding wire are turned down into the slab and do not protrude above the bars. If this is not done, these small wires will come out of slab surface and pave way for rusting of steel. This small precaution pays dividends in the long run. About 4.5 kg of wire is generally required for one tonne of steel.

Provide hooks

End hooks of steel bars play an important part in increasing grip as these provide anchorage to steel in concrete and help in creating a stronger bond between the two materials. Therefore, always provide end hooks to steel bars. Semi-circular hooks are provided in round steel bars but it is not possible to provide such hooks in TMT or HYSD bars of large diameters. Therefore, L type bent ends should be provided for such bars. The length of the L bent should be 4 times the diameter of bar.

Stagger laps

Whenever laps are needed to be provided in steel, these should be located at such locations where tensile stress in the bar is the lowest. Ask your engineer about it as only he can identify these locations as per site conditions. Further, the laps should always be staggered.

By this, we mean that laps in all bars should not be at same distance from one end but at different distances in different bars. Further, the two lapping bars in a length should be bound well with binding wire in the overlapped portion. Though length of lap can be reduced by welding the two bars instead of binding them with wire, generally it is difficult to arrange a welding set and electric connection for it. Moreover, bar binders are not expert in welding and damage the steel during welding.

As the laps result in the increase in quantity of steel required, their number should be kept minimum. To achieve this, steel bars of required lengths only should be purchased so that much necessity of overlapping two bars of smaller lengths does not arise.

Happy building!!

The writer is SE (civil), PSEB. He can be reached through



A channel dedicated to realty

Illustration by Sandeep JoshiReal Estate TV, the country’s first 24-hour premium TV Channel dedicated completely to the real estate, will be launched in July

Announcing this in Bangalore, channel promoter Manoj Namburu, CMD, Alliance Group, a Rs 4,400-crore enterprise, said though the channel was promoted by the Alliance Group, it was “of and for the real estate sector” at large.

The pan-India English-language channel, he said, was being put together under the advice and guidance of well-known media personality, Sashi Kumar, by a team of seasoned media professionals led by COO T.K Vibhaker.                        Illustration by Sandeep Joshi

As the channel involving an investment outlay of Rs 100 crore would exclusively offer real estate related programmes, its launch would mark yet another first by the IT Capital of India.

The channel would provide comprehensive, latest and authentic updates on all aspects of real estate, including infrastructure to viewers all over the country, south and south-east Asian regions and the Gulf where there is a strong NRI presence, Namburu said.

With news centres and state-of-the-art studios in Mumbai, Delhi-NCR, Chennai, Bangalore, Hyderabad and Kolkata, a wide information-gathering network across India and a dedicated research and analysis facility in New Delhi, Real Estate TV would be the one-stop shop for everything connected with this industry and the large number of other industries connected to it, Sashi Kumar said. — UNI



Buzz on Bourses
Indiabulls deal with Zublin

Mumbai: In order to tap the booming construction sector, Europe's leading infrastructure group, Strabag SE, has joined hands with Indiabulls Real Estate Ltd for working on large development projects in the country. The real estate arm of the Indiabulls group has entered into a Memorandum of Understanding with Zublin International GmbH, a subsidiary of Strabag SE for consolidating their resources, experience and jointly work on large infrastructure development projects, Indiabulls Real Estate said in a communiqué to the Bombay Stock Exchange.— PTI

Ascendas fund for India projects

Singapore: Singapore’s Ascendas, which manages offices and industrial parks, has launched a Sing $500 million ($325 million) property fund, which will focus on office projects in India. Ascendas, which is part of Singapore state-owned industrial landlord JTC Corp, said the India Development Trust has a target asset size of Sing $1 billion. Bahrain-based asset manager Arcapita and the private banking arm of ING are co-investors in the fund, Ascendas said. The fund, which has an eight-year term, will focus on integrated property projects, Ascendas said. Ascendas controls Ascendas Real Estate Investment Trust, which is Singapore’s second-biggest REIT. — Reuters

Omaxe public offer in July

Hong Kong: Indian developer Omaxe Ltd. plans to raise up to $400 million through a domestic IPO in July, according to a term-sheet distributed on Wednesday, testing investor demand for Indian property companies. Omaxe’s sale of nearly 18 million shares will come on the heels of rival developer DLF Ltd., which is raising $2.4 billion, India’s largest IPO ever. Omaxe Chief Executive Arvind Parakh, speaking to Reuters earlier, said the company would grow faster than the 30-per cent annual rate expected for India’s $15 billion property development industry. — Reuters