Want a Home Loan? Take It Now!

A dream new home is everybody wants or invest to make money, but perception these days that with high interest rates home loans are unaffordable. Well because of increased home loan rates there will be less number of takers of home loans now. But I think if we look at the whole picture then there should be more home loan takers than before. It is absurd to think like that in current situation but removing the curtain of subjectivity will sove this.

Now what is happening, prices of steel, cement, aluminium, iron and almost every commodity are increasing. Due to this the housing sector bears the brunt of increased input costs in developing in houses and townships. Subsequently house developers increased the prices of properties, while the demand from consumers has not subsided yet. But soon people will shy away from buying new homes as when the interst rates on home loan increases. That’s exactly what happened and there is low number of home loan takers, as now people will have to pay more through EMIs.

The boom in the real estate market in last 3 years has seen lakhs of houses being built, development of new townships ans still they are in developing phase, but people are not going for new homes now waiting for interest rates to dip a bit. So, few takers of new houses built by developers has compelled them to reduce some prices to keep selling and attracting people to buy in homes. So now when the demand is reduced, the housing market is seeing a downward trend especially in metros. Bangalore seems to be in the midst of low demand & high supply. This can be attributed to the facts that due to the sudden growth of Bangalore, in the last few years. When demand is low & supply is high prices will come down. In Mumbai developers such as Hiranandani and Kalpataru offered a discount of more than 10% on the quoted price. There is a substancial pressure on Indian residential sector because of abundance of reality projects coupled with high intrest rates and inflation. It has come to the notice of The India Street that there has been a correction of around 15% on an average in the capital market values of land across Delhi and NCR.

There is no rocket science in understanding of above stated concept based on principles of demand and supply. But how it can be god option to take home loan right now? how to eliminate the effect of increased EMIs? Well earlier people took home loans at floating rate thinking that the rate would dip but instead they increased. That was there ill luck. But now it ill be best advised to tale a floating rate of interest because interest rates are at all time high and there in slow down in the growth of economy which the country’s central bank, RBI, sees. RBI increased the CRR (Cash Reserve Ratio) and Repo rates in order to reduce the supply of money in the system through banks so that inflation can be contained which is also at all time high. But then inflation is not directly proportional not growth of the economy and RBI has to keep a fine balance so that economy grows at affordable inflation rate.

As I write this the crude oil, which is main culprit of pushing inflation up, is at 128 $/ barrel down from 145 $/barrel and it reduce soon below 120 $ mark as Saudis are increasing the output, fearing more reduction consumption because of the prices they are charging. Tension between US and Iran which was at its hit few days ago seem to be allayed down as US ageering to start a diplomatic approach instead of going for war over Iran alleged nuclear enrichment program to make nuclear weapons. And also Brazil’s major oil company Petrobras workers have decided to end their strike. All these can be seen as positive global cues and can make crude oil prices to reduce further.

Now with lower prices of crude oil comparatively will lead to the reduction petrol and diesal prices in India too, and steel prices reduce too as Government is planning to ban exports, hence inflation will relax. When inflation will manageable low, RBI at an oppurtune moment will reduce CRR. Banks will then have to park less fund with RBI and inject more funds in the circulation by reducing loan rates.

Therefore bottom line is that the home loan rates will decrease in future and this attributed other kinds of loan rates as well like car, personal etc. Hence people will have to pay low EMIs in future. But property rates are seeing a downward trend only now when demand is less. When interest rates are reduced the prices of property will jump again. So it an opputunity at this moment in time then adversary. Also from an investment point of view. Whatever the condition of the economy, one thing we should not forget is in the long term property (land) is a great investment as it is the only asset class which cannot be produced. Though there might be a 18-20% correction across in the short term ( say 6-8 months) due to the factors mentioned above ,a wait, watch and a definite buy make sense for the long term.

ICICI Bank provides not just the most competitive interest rates & best level of service, but also products designed to cater to the specific needs of consumer. ICICI bank has different interest rate scheme

1. Fixed Rate Home Loan

2. Adjustable Rate Home Loan

or combination of above two types of rates

a. Step Up Repayment Facility (SURF) for young professionals.

b. Flexible Installment Plan (FLIP) for varying tenure of income source.

c. Part Fixed, Part Floating to minimize the impact of changing in the interest rate regimes.

d. SmartFix Home Loans for 3 years lock in period to see the rates movement and then decide.

e. Money Saver Home Loan

All this with free personal accident insurance and of course tax benefits.

Interested people regarding this or for any other banking solution can contact by sending an e-mail at Spetznag5@yahoo.com

“Uncertainty is not a pleasant state of mind but certainty is absurd” – Voltaire

US role on oil prices.

Well the current crude oil prices are at burgeoning level, like never before, though it seems to stabalise a bit hovering between 137-146 $/barrel for a month now. But the drastic effect that high oil prices have left on the economies around the world has taken its toll on the common people. High prices have led to dangerous inflation leading to a slump in economies and putting them in jeopardy. Inflation has breached all time highs in many countries like India where it is inching towards 12% and Russian inflation was 11.9% in 2007. Inflation in Latin America ranged from 3.3% to the high teens in 2007. The Chinese agree to let their currency rise faster than in 2007 to combat inflation. In Singapore, the consumer price index rose by 0.6 per cent in February on rising prices of housing, clothing and food items. In Hong Kong, the composite Consumer Price Index rose at a slower annual pace of 0.8 per cent in February, compared to the 2.0 per cent increase in the prior month. Oil prices have shot up, some say because of hugh demand in emerging countries others say it is due to speculation. Well perhaps both of these.Speculation, surely taken the prices to a new high. Unlike past oil crises, where the spot price of oil (that is, today's price) rose more than forward prices, the oil price for delivery in 2012 is trading at $138 per barrel. The market is sending a clear price signal that our problem is in the future.

Another speculation is about the US’s aggression over Iran, and a possible conflict in the middle east giving the signal that prises could reach 200 $/barrel. And US has given amber signals to Isreal to start preparing for war after Iran test fired 9 long and medium range missiles. The day next to those tests see prices shooting up 6 $/barrel, which clearly shows how, if a war happens, then prices will reach the sky. Iran which is the second largest producer of oil, has clearly stated that if attacked by anyone, it will spill the oil in Strait of Hormuz from where half of the imported oil towards Asia, Africa and Australia come from. In 1973 oil crisis which began on October 17, 1973, when the members of Organization of Arab Petroleum Exporting Countries (OAPEC, consisting of the Arab members of OPEC plus Egypt and Syria) announced, as a result of the ongoing Yom Kippur War, that they would no longer ship oil to nations that had supported Israel in its conflict with Syria and Egypt (the United States, its allies in Western Europe, and Japan). Now it will be US who will be responsible if war starts and oil price reaching unaffordable prices that economies of India, China, which already facing all time high inflation, to see a slump. Infact in India high oil prices have already showing its effects on development and growth.

US has already commited a blunder going for Iraq invasion, and Iran , it will cause hugh effect , and a lot of new emerging countries would perhaps become absolutely stagnated. The decision by president bush to start offshore drilling of oil was welcomed as it would send a signal to monopolised OPEC that more oil is coming. But that decision is overturned recently.

Although Iran president President Mahmoud Ahmadinejad has said that he would have talks to follow rather than war. Weapons of Mass Destruction was the reason for Bush’s earlier adventure into Iraq, and now Iran nuclear enrichment and possible threat to the world in long term. Well long problems are solved slowly it is and with vision and consultation but what about the short problems that the whole world is facing. If he is really desperate to launch a rocket or a fire a bullet, then why not in North-West Frontier Province (NWFP), and Waziristan,  the area near Afganistan-Pakistan border, which houses cream of Taliban. They are the guys more dangerous and definitely posing a problem and that too in short term. Regarding nuclear enrichment program which Iran states it is for peaceful energy production and US says for building nuclear weapon, US doesn’t really have that concreat evidence to say that, but surely it it can’t be ruled out that nuclear weapons are not in making.US can gather more support for pushing more economic sanction. It has got the success in diluting North Korea's nuclear enrichment or atleast Iran can be persuaded to have IAEA inspect its enrichment program. But I think if economies around the world slows down especially in Asia, which houses half of world population then 1 billion will crawl into poverty, unemployment and many other problems. It will be worse than exploding a nuclear bomb at one place.

US is itself so careless in taking care of its nuclear material that in recent news says that US is taking too long to secure the radioactive material that it could get into the hands of terrorist’s.

I support US in a lot of things but i would be really happy for world if it take caution in whatever it tries to do. So all onus on US what it will do, will it be the saviour or the destructor. The whole world depends on IT.

Naxalism: Socio-Economic Dimensions

“Naxalism is the single biggest internal security challenge ever faced by our country. The movement has gained in strength and has now spread to over 160 districts all over the country...the extremists are trying to establish ‘liberation zones’ in core areas where they are dispensing basic state functions of administration, policing and justice,”. These are the words of our Prime Minister Dr. Manmohan Singh in 2006
The roots of naxalism, later termed as Maoism or left Wing Extremism(LWE) has now been labelled as pre date independence. Naxalism is pre-dominantly rural but has also witnessed urban menifestations such as in calcutta during the period 1967 to 1970. The LWE has extended across nearly half of indiacovering the hill-forest belt through middle and peninsular india.
The problem, as seen the socio-ecomic today, arose through zamidari system.In this system a Zamidar was told to cover thousands of acres of land, for which he had to pay so many lakhs to the company or to the state. The Zamidar did not cultivate the land. he had various people as subordinates, farmed them out, and they inturn farmed them out to others, and they in turn to others till to the actual cultivators. this way the actual tiller was sucked to get the money or produce from them to pay the rent to the state or to the company. Zamidar remained a rentier and not a cultivator and several layers of sub-infeudation existed and each one extracted his pound of flesh.
In case of forests, the process of reservation of forests and protected forests for conservation, reduced the tribal inhabitants to intruders and encroachers. these people lived in forest which was their home, their livelihood for generations. The state took away their rights. The symbiotic relationship between the tribals and the forest was scorned, in the name of creation of sanctuaries, tiger protection, nature and biosphere reserves and land acquisition for a hundred different reasons- dams, roads, refugee settlements, expansion of urban areas, expansion of agricultural land, mines, industries and so on. All of these at the cost of forest and tribals.
So they are removed from forest and aquired land with the promise of their resettlement and rehabilitation and payment of compensation. Well promises never materelised. Today when the state or a corporate body promises compensation, people laugh and scorn and say we have heard it before. For example people in orissa displaced due to construction of Hirakund dam are not compensated nor resettled.
Such actions by the state make people believe that the state really can’t think better of them and even suck out their lives as they are the easy to be removed, have no means, have no voice. There are also problem with the administration of remote and isolated areas which are defined underdeveloped and had poor connectivity. The Abujhmarh area in Chhattisgarh is bigger than Manipur state. The area is totally un-surveyed. It doesn’t have roads, schools, hospitals, no basic amenities. With nobody want to go their, the affluent indian doesn’t think of going to that place so why build roads.
Basically there has been a lack political will because the feudal class with vested interest is sitting at the top. Bihar was the worst case perhaps, there were issues like bonded labour and non payment of even basic minimum wages. The feudal class is well entrenched in the government jobs, media, judges, professors and so on. The freight equalisation policy introduced by govt. in 1950s, eliminated the adavantage the the rich mineral states could have. The state paid subsidy to ensure that the price of coal or iron was same be it Kerela or Nathula pass as in area where it is mined. Thus all triggering meachanism for development- connectivity, generation of employment and incomes disappered. And even where the oppputunities were, the tribals not educated and devoid of training.
Cumulative wrongs, deprivation and despair have given rise to naxalism which has grown in the interior. Naxalism came as protectors and Robinhoods. They set up Jan Adalats and dispenced. They were the protectors of common people against exploitation. They beacme bolder. After taking good control they said that every family would contribute on male or female to their squadrons. People came under an iron control. This in turn led to another kind pressure. The govt now is keen to develop the area by constructing roads, railways and so on. The naxalites do not want area development because this will give access to the state administration and threaten them and their power.
Law and order is neccessary to deal with criminal activites of people including extortionists of various kind. Well, one whole concept of law and order stand for the defence of feudalistic and oppressive system. So we need social and economic reform to ensure human dignity, fraternity, social justice, education and equal democratic rights to exercise. The current agitation is about displacement for various acquisations for mining and development projects. Over 50,000 people have been displaced to the Salwa Judum campaign in Chhattisgarh. So what we need is a new paradigm of development in which we have public, private and people’s participation.Development of backward areas is indeed a long-term solution to prevent expansion of naxalism. Naxalite problem requires putting the interest of the Adivasis and Dalits on the highest priority. It cannot be addressed by more displacement,Socio-economic development of the Naxalite affected areas requires a seperate ministry for undertaking development programmes, coordination with various state governments and involvement of the civil society groups for ensuring the right to entitlement of the of tribals.
Prime Minister Dr Manmohan Singh stated that “exploitation, artificially depressed wages, iniquitous socio-political circumstances, inadequate employment opportunities, lack of access to resources,under developed agriculture,geographical isolation, lack of land reforms, all contribute significantly to the growth of the Naxalite movement.”
As the agenda that the Naxals mouth is typically pro-poor and because the ‘development’ in India is not reaching all of the population, the Naxals are having a field day. The government seems to be waking up to the seriousness of the situation however and well, better late than ever.

In conclusion I want to say that the government has proposed a two-pronged strategy to combat Naxalism:
1.Gain confidence of local people by taking up more welfare related activities.
2.Build up infrastructure in naxal-affected areas and generate employment.

We need the deal

The Indo-US nuclear deal is being called the biggest breakthrough in years. Tough negotiations between Indian and American diplomats that took place, and lobbying by NRIs led to draft this deal, even as the deal battled its way through Parliament in Delhi and the US Congress.Many have consistently raised concerns that this make-or-break deal might be bad for India but here is a look at more of the fine prints of the deal that has a life span of 40 years.The 123 agreement is a civil nuclear deal, therefore, it will have no bearing on India's strategic and military programme and India can make a bomb. It is completely out of the ambit of the deal.In the text of the deal there is a clause that says that the agreement will in no way be a hindrance to India's strategic programme. Therefore,India can continue to make a bomb with its own fuel.What is clear from the draft of the 123 agreement is that there is no legal binding commitment on India to never test again. India, if it wants to, can choose to conduct a nuclear test.If India does conduct a nuclear test, it will not be violating any international treaty or agreement because there is no mention of testing or detonation in this bilateral agreement.Essentially, what the controversy has been over is whether if India conducts a test the Americans under their own laws would have the right to take back all the fuel that they give us.

Right of return

The deal interestingly says that the right of return that the Americans have does not automatically comes into effect. It is something the US administration chooses to do. They would have to stop cooperation with India. But whether or not they take back fuel is something they would have to choose to do.Even after the US chooses to do that, there are about seven to eight barriers before the right of return actually comers into play.What the agreement says that that it will take into account the circumstances in which India conducts a nuclear test.These include a ''changed security environment'' or action, which could impact national security.Essentially what it boils down to is that the right of return may not be invoked if Pakistan or China conduct nuclear tests and India responds to that by conducting a test of its own.In a way, this is the first international agreement, which would justify the circumstances in which a nuclear test is conducted. So India is not giving up its right to test and right of return of nuclear fuel does not automatically comes into play. Under Secretary of State Nicholas Burns has told earlier before he retired that India retains the “sovereign right” to explode a nuclear device but hopes that such a situation will not arise. “India retains its sovereign rights, but the U.S. retains its legal rights as well.

These assurances that the US would ensure that there is a lifetime supply of fuel for India's nuclear reactors and that they help India build its strategic fuel reserve.If the US is unable to fulfill this commitment, it will convene a group of countries like Russia, France and the UK to ensure supply.Even if, for some reason, they were to take back nuclear fuel, India retains the right to seek alternate sources of fuel for itself. India will have to build strategic reserve so that it does not go out nuclear fuel.

Highlights of the Deal

* The agreement not to hinder or interfere with India's nuclear programme for military purposes.

* US will help India negotiate with the IAEA for an India-specific fuel supply agreement.

* Washington will support New Delhi develop strategic reserves of nuclear fuel to guard against future disruption of supply.

* In case of disruption, US and India will jointly convene a group of friendly supplier countries to include nations like Russia, France and the UK to pursue such measures to restore fuel supply.

* Both the countries agree to facilitate nuclear trade between themselves in the interest of respective industries and consumers.

* India and the US agree to transfer nuclear material, non-nuclear material, equipment and components.

* Any special fissionable material transferred under the agreement shall be low enriched uranium.

* Low enriched uranium can be transfered for use as fuel in reactor experiments and in reactors for conversion or fabrication.

* The ambit of the deal include research, development, design, construction, operation, maintenance and use of nuclear reactors, reactor experiments and decommissioning.

* The US will have the right to seek return of nuclear fuel and technology but it will compensate for the costs incurred as a consequence of such removal.

* India can develop strategic reserve of nuclear fuel to guard against any disruption of supply over the lifetime of its reactors.

* Agreement provides for consultations on the circumstances, including changed security environment, before termination of the nuclear cooperation.

* Provision for one-year notice period before termination of the agreement.

* The US to engage Nuclear Suppliers Group to help India obtain full access to the international fuel market, including reliable, uninterrupted and continual access to fuel supplies from firms in several nations.

* The US will have the right to seek return of nuclear fuel and technology.

* In case of return, Washington will compensate New Delhi promptly for the "fair market value thereof" and the costs incurred as a consequence of such removal.

* Both the countries to set up a Joint Committee for implementation of the civil nuclear agreement and development of further cooperation in this field.

* The agreement grants prior consent to reprocess spent fuel.

* Sensitive nuclear technology, nuclear facilities and major critical components can be transferred after amendment to the agreement.

* India will establish a new national facility dedicated to reprocessing safeguarded nuclear material under IAEA safeguards.

* Nuclear material and equipment transferred to India by the US would be subject to safeguards in perpetuity.