How to protect yourself from Cyber Crime?

By Fiona Mehta

 

Cybercrime in the financial sector has increased significantly. People who fall into the trap set by the scammers have lost their hard-earned money to the scammers through a variety of schemes. Scammers are increasingly utilizing phishing, smishing, and vishing. To deceive people, they are using new tactics. Unknown numbers may phone you in an explicit video call or they may pretend to be a distant relative who is in need of money. They can phone you pretending to be a bank executive and tell you that your debit or credit card requires an upgrade.

However, experts advise against ever giving out private information to anyone, including OTPs, credit/debit card numbers, CVVs, and Aadhaar numbers. Additionally, avoid sending money to unfamiliar numbers without first validating them.

As long as you stay alert and aware of threats, you can be confident that your possessions and money will be secure. Putting your finances online offers accessibility and convenience, but it also carries a danger from things like malware/ransomware, malicious bots, and phishing.

Some advise by expects to protect ourselves would be:

  1. Use only trusted apps.
  2. Enable Multi-Factor Authentication to hide password hints, if you want to protect your digital finances.
  3. A security assessment is particularly crucial if you’re a businessperson because you can create a baseline and plug any gaps.
  4. Ensure that the data on your computer is shielded from malware, viruses, and cyberattacks by sophisticated endpoint security measures. Try to maintain a monthly offline backup of your data.
  5. Avoid phishing emails, and consider your actions before clicking. A phishing email is the origin of more than 90% of successful cyberattacks.
  6. Create secure passwords. To create strong, one-of-a-kind passwords, one can use a password manager.
  7. Software should also continue to receive regular updates. Updating the software on your device, whether it’s a phone or a personal computer, is very vital and necessary to keep threat actors at bay.
  8. Use an anti-virus protector on your devices to protect from any vulnerabilities.

Experts also advised that precaution is better than cure as there is no better way than awareness to safeguard one’s self from cyber threats

The 1930 helpline, which was introduced across the nation, started operating in the city on May 17, 2022. Since then, people who have been the victims of various cyberfrauds have called the hotline, and authorities have fed the information onto the cybercrime.gov platform, which helps to freeze the bank accounts into which the proceeds of the fraud are moved. In the last four months, they have found more than Rs 32 lakh that victims of cybercrime lost.

Editorial: Is Indian Real Estate Following the Trend of China Real Estate’s Downfall?

By Dr. Sanjay Chaturvedi, Editor

Housing Finance borrowers have started refusing to pay EMI on home loan taken in China. Reason is a major default by the builders and developers to complete the projects and completion nowhere. Besides this, a huge recessionary trend in the national economy is seen after COVID period which is still running.

In China, real estate prices will see a nose dive in August 2022.  Month-on-month price falls spread to more cities in August 2022, with unfinished projects across China increasingly a longer-term drag on sentiment. Out of the 70 cities surveyed, 50 reported price falls in August, up from 40 cities in July 2022. Home prices dropped 0.2% and 0.4% in tier-two and tier-three cities respectively, official data showed.

Empty unsold buildings were made to be demolished as builders could not sell and property tax was mounting. Videos of demolishing big towers in China were circulated in social media and in authorised media of China.

What was the problem? It was nothing less than the Sub Prime crisis in the USA, where the investors of Mortgaged Backed Securities started liquidating the investment on the pretext of bad loans. The victim was Lehman Brothers and many non banking financial institutions including some famous REITs. Similarly in China too, the loans were refused to be served by the home loan borrowers as the builders could not complete the projects in time and had manipulated the funds from the operations and sales.

“Short term borrowings and long term investments” is the perpetual bad habit of the real estate players. A new trend has emerged as “the profits are withdrawn first” at the starting point of the project.

Will RERA in India help? To the extent yes. Because of two reasons. First: no project can be sold without first registration with RERA, this will take away the joy of selling the projects before launch, “pre launch”. It discourages the investors to reduce speculations. Secondly: A prescribed rule in the RER Act 2016 is for 70% of the receivable must be deployed in the construction of the said project.

The customer behavior in India is extremely different then of China or European countries. Here, “Home” is just not an asset but it has sentimental values. The home borrower, unless in distress, will keep the payment of EMI on its highest priority. The default rates and industry standard NPA has been below 2% since 2003. It may vary lender to lender as per their credit policies and exposure to risk while distributing loans.

China’s home loan market is different from that of India. The state owned agencies decide the credit policies and MCLR. Whereas the open economy of India has deregulated the MCLR long back. RBI puts a suggestive lending and REPO rate. Every bank and financial institution has its own minimum lending rate structure and add-on as per the risk and credit score of the borrower.

But a big lesson must be learnt from China is when things go into litigation, the borrower wants to stop the EMI, which he does instantly and make the bank a party specifically when there is a subvention scheme.

It will be a difficult proposition for the banker to recover the major part of the loan from builder and borrower when builder defaults and does not pay pre EMI as promised in tripartite agreement, and borrower limits himself to the amount paid in subvention scheme.

The Subsidy scheme is nothing but the borrower gives guarantee to construction loan taken by the builder. In this, when the builder fails, the borrower is solely responsible even though the builder has taken the entire money as construction loan.

 

 

Editorial: Paying Maintenance equal to Rent?

By Dr. Sanjay Chaturvedi, Editor

In many part of the mega cities like Mumbai, Bangalore, Chennai and many parts of Gurgram, people buy properties in up market residential projects for as cheap as Rs2 cr for 2 BHK. They are carried away by the amenities provided. Residential projects offer 20+ amenities and they advertise like this, and buyer do get such amenities like swimming pools, club house, gym, outdoor games etc.

To up keep the such amenities, builder often keep property management companies who provide facility management besides maintaining the amenities so provided. Usually, promoter wants its project to be well kept and maintained till the time of handover or last unit is sold. Unless such up tight maintained property is kept it is hard for them to sell.

Hence Property Managers charge whoopingly high charges from the buyers who usually pay two years advance maintenance. A usual charge to keep a 2 BHK in a high profiled project comes to Rs50,000/- per month if not more. Same is the case south Mumbai, and many posh residential project in Bengaluru, Chennai and in Gurugram.

It is pinching to pay such whoopingly high maintenance where as the property tax would be much lesser than what is been charged. At the time of handover, promoters usually utilise almost every single rupees in maintaining the property, the then the society is left with no option but to reduce the size and quality of amenities.

Situation is worst in redevelopment project. While the old society occupants and members do not have to pay any thing as the corpus fund is negotiated, they do not agree with new members who wants to up keep the amenities offered to them. New buyers are inducted into old society and the old society member do not want to spend such whoopingly high price for maintenance.

Not only old society members but now new buyers are also under the impression that although they own the flat in such posh societies, paying maintenance is just like paying monthly rentals.

Editorial: Enhance exemption limit for Home loan repayment

By Dr Sanjay Chaturvedi, LLB, PhD

Home loan borrower have exemption limit of Rs1,50,000/- per year to be deducted from their income if they repay home loan on their first home. This exemption was introduced 20 year back and having revised year on year but never given a serious thought. Budget after budget every government ignored the rational behind Rs1,50,000/- and interest thereon with maximum Rs2,00,000 per annum.

Assuming a normal home cost Rs one crore in any urban center and home loan to value is 85%, hence 85 lakhs is availed. An EMI of 85000/- per month is what a home borrower pay. It comes to approximately Rs10 lakhs per annum average a home borrower pay against a small exemption of Rs1,50,000/- .

The exemption limit must be enhanced to RS10 Lakh if not more to give some breathing space to home buyers. Jajia of taxation on ome buying is imposed by state governments and centre government. Every government, local self governments impose heavy tax on home buying. GST to start with is whoopingly high at 12%. Affordable housing too cannot afford to pay even 5% of the capital expenditure on home. When a loan to value margin is 15 % on home buyer, how can he pay 22% taxes? Stamp Duty is 7% in all most all states, GST is 12% Local Body Taxes are imposed and then surcharges comes to 22%.

This union budget must give a releif from taxation on home buying. Tax exemptions must be increased to 10 lakhs.

Editorial: Stock Market Bubble in offing

By Dr. Sanjay Chaturvedi, LLB, PhD.

Bombay Stock Exchange touched a new height of 51000 mark recently. Economist usually look at Stock Exchanges as Economic Indicators and quantification of growth of the economy. Is the Economy really surging so upwards that the stock indices and index going historic high? Is the fundamentals are so strong and a bonafied upward rally is justified?

Let us take few economic figures for instances. Index of Consumer Economy which is represented in Passenger Vehicle Sale is down 100% on year on basis. It was -30% in May 2019 went up to -100% and in April 2021 it again have -4.3% growth. Similarly in Tractor Sales it went -60% during the fiscal year and now recorded 5.2% growth, YoY, Broadband Subscriber base seen down 17.9% since May 2019, Domestic Air Passenger down by -22.7 % YoU since May 2019 as recorded in April 2021.

In Producer Economy: Core Growth is -1.2% in March 2021, PMI Composite is up by 55.4%, Bank’s Non-food credit down by -5.8%, Rail Fright Traffic up by 5.1%, YoY in April 2021.

In External Sector: Import Cover (Forex Cover in months) grew 13.3, Rupees to dollar lost -2.3%, Labour intensive Sector exports grew 3.9%, Reade Balances -19.8.

Ease of living: CPI -5.7%, Core CPI -5%, Real Wage growth -0.3% and labor forces participation rate -40%.

All core indicators are showing negative growth trend and besides this, inflation is rising, and there is cash crunch / liquidity crunch in the market. Small savings percentage is reduced and because of lock down, middle class have lost all savings and now in reserve to run their homes. Because of this, all fixed deposits and savings were liquidated by people.

Banks will soon come in negative earnings as savings and small investments, fixed deposits and recurring deposits are liquidated by customers. Corporate are hiding behind lock down and not paying because of moratorium period of lock down. Bankers will soon enhance the rate of interest to lure deposits. This will be additional burden on borrowers. corporate and industries have slow down and not running 100% capacity and because of that demand for credit money is almost lowest in last three decades.

Then why Bombay Stock Exchange touched 51000 mark? Is there a big IPO coming? Is speculations by FII in offing and all of a sudden a big bump expected? Or is it that the banks are offering less interest on FDs and hence investors have moved to stock market trading? Is mutual funds are capitalizing on their presence? Or is it book building on non core industrial stock run?

Whatever is the answer, but one thing is certain, this 51000 mark is not an indicator of fundamental of economy. Speculations and Profitmongers are in offing, for sure.

 

Editorial: India needs 25 more new mega cities to accommodate its urban population

By Dr. Sanjay Chaturvedi, LLB, PhD.

Population out burst and migratory trend in India is demanding at least 25 new brand mega metropolitan cities with international standard infrastructure, look and feel. The burden on existing cities and its infrastructure cannot be sustained for long. India badly needs 25 more big mega cities to house its millions of over flowing urban population. City out skirts have seen big townships, filling up within no times, and this is the reason when we know that rural population is migrating to urban agglomerations, need for new smart and mega cities like Mumbai, Delhi, Ahmedabad, Chennai and Kolkatta is need of the hour.

According to the census data and various research papers, India shall house its 66% of the population in Urban Centers. What is required is to convert three tier cities into mega urban centers with commerce and industry in place with full town planning to accommodate future populations.

Old cities like Mumbai, Delhi have no scope to improve to international standards. Any international city has roads at least of 25% of the total city area. There no roads in these mega cities. No scope for improving infra to over flowing population. Shall India deprive itself to have such international cities, with ultra modern amenities, well planned roads, zones, CBD areas, service centers, room for Art, Culture and life style. We at Mumbai, Delhi, Chennai and Kolkata do not have lifestyle and enjoy the nature, entertainment, night life and on. Why we cannot create our own international cities with the line of Dubai, New York, London and compare to any international city?

We have already cities, towns, muflis areas to develop. What we need is comprehensive policy frame work and incentives for people to move to new cities. We had Navi Mumbai, Nava Kanpur, New Aurangabad and so on. Planners like CIDCO have done commendable job in establishing new future ready cities. Why can’t we have more CIDCO in the country with more role model like Navi Mumbai and Chandigarh?

Need of the hour is that we gift new brand international cities to our generation next who are looking for life style in foreign land. Attraction and incentive must be offered to young generation to come and built new brand India.

 

Editorial: Scrap Stamp Duty in India

By Dr. Sanjay Chaturvedi, LLB, PhD.

World over, wherever GST is imposed, there is no Stamp Duty. This is nothing but double taxation. India has many states and UT and every state has its own stamp duty rate. Cost of acquisition must be rationalized. Mere registration charges of the documents should be taken and stamp duty must be scraped and repealed. When GST is already in place, the governments already take their share of the revenue. All five taxes like Sales Tax, VAT etc have already subsumes in the GST, why not stamp duty also merged with GST.

The Stamp Duty is a big percentage of the purchase price when the purchasers have already finding it difficult to cope up with even 15% margin money and take 85% as home loan.

The exchequers must think of double taxation on the same transaction with different name is a burden on the person who is taking home loan and paying the taxes through his nose. The relevance of the stamp duty is negligible when GST is already in place.  The National Housing Policy 1998 and 2005 had advocated the rationalization of Stamp Duty across the nation and one single percentage of ad volarum tax be introduced to rationalize transactions in the country. The federal system in our country have restrained rationalization of the Stamp Duty.

Although it is State’s prerogatives to impose Stamp Duty but it was  introduced in 1984 in Maharashtra and during that time in other part of the country. But in the era of GST, double taxation must be stopped immediately. Following is the table of Stamp Duty in different states in India.

Sl. No. State Rate of Stamp Duty
1. Andhra Pradesh 8%
2. Bihar 8%-urban & 6%-rural
3. Gujarat 4.9%
4. Haryana Urban: 8%-male & 6%- female;Rural: 6%-male &4%- female
5. Himachal Pradesh 5%
6. Karnataka 8.4%
7. Kerala 13.5 %- urban, 10% -rural
8. Madhya Pradesh 10%- male, 8 %- female, 9%- joint regis tration
9. Maharashtra 5%-male & 6%-frmale
10. Orissa 11%-urban & 8%-rural
11. Punjab Urban: 8%-male & 7%- female;Rural: 5%-male & 4% -female
12. Rajasthan 6.5%-male & 5%- female
13. Tamil Nadu 8%
14. Uttar Pradesh 10 %- Male, 8 %- female
15. Uttaranchal 10%-male, 8%- female
16. West Bengal 6% if value of property is <=25 lakh, 7% for properties valued > 25 lakh; duty is also lower by 1% for panchayat

areas.

 

 

Stamp Duty on Conveyance:

States Minimum Maximum
Andhra Pradesh 11.5 13.5
Gujarat 0.75 6
Kerala 12 15.5
Maharashtra 4 5
Karnataka 8 10
Punjab 0.5 9
Rajasthan 7 11
Tamil Nadu 6 8
Haryana 6

*As applicable on February 19, 2007.

Source: National Institute of Public Finance and Policy (2007), Primary survey Data on Stamp Duty, New Delhi.

Editorial: Realty Sector Rushes for Carbon Credits

By Dr. Sanjay Chaturvedi, LLB, PhD.

The carbon credits are like price money for real estate sector. Carbon Credits are given for the points earned by any venture for saving energy and less carbondioxide in the air. World over, after Kyoto Protocol signed by most of the United Nation members, carbon credit concept is gaining momentum for awards in monetary terms. They are a key component of national and international emissions trading schemes that have been implemented to mitigate global warming.

Real Estate developers in India are game for cashing on the carbon credits generated by their projects. The credits can be generated for completed projects as well as planned for energy savings. Credits can be exchanged between business or bought and sold in international markets at the prevailing market price.

The protocol agreed to put a cap or quotas on the maximum amount of greenhouse gases for developed and developing countries. In turn these countries set quotas on the emission of local business processes. A credit can be an emission allowance which was originally allocated or auctioned by the national administrators of a cap-and-trade program, or it can be an offset of emissions.

For trading purposes, one allowance or Certified Emission Reductions (CER) is considered equivalent to one metric tone of CO2 emission. These CER can be sold privately or in the international market at the prevailing market price. Each international transfer is validated by the UNFCCC.

Carbon credits create a market for reducing greenhouse emissions by giving monetary value to the cost of polluting the air. It is important for any project to prove “Additionality”, a term used by Kyoto’s Clean Development Mechanism. To prove Addionality, a Carbon Credit reduction project would not have occurred had it not been for concern for the mitigation of climate change.

US presidential candidate Obama and rock star Meradona were compelled by authorities to purchase Carbon Credits for their campaign and shows. In India, ITC Sonar Bangla, Kolkata, is world’s first hotel to obtain CER besides Hotel Orchid in Mumbai which has created and generated Carbon credits.

Real Estate projects, those completed are getting audited their process, and those which are under planning stage are going in for energy saving complexes to reduce the carbon emission while constructing, precuring local building materials and providing water harvesting and Solar systems for alternate to electricity.

As of November 2007, 175 parties have ratified the Protocol. Of these, 36 developed countries plus the European Union are required to reduce greenhouse gas emissions. These represent 61.6 % of emissions from Annex I countries.

As of September 2008 and running through 2012, Annex I countries have to reduce their greenhouse gas emissions by a collective average of 5% below their 1990 levels. Hence Carbon Credits are going for a great demand. Just like TDR concept, Carbon Credit are also gaining momentum in India.

Editorial: More, not merrier for traffic congestions

By Dr. Sanjay Chaturvedi, LLB, PhD.

Between 1951 and 2000, while the total urban population in India increased just 4.6 times, the number of vehicles bounded up 158 times. According to Planning Commission, Transport demand in the country has grown at 1.2 times the gross domestic product growth rate. And metropolitan Cities with just about 11 per cent of the total population have 32 percent of the country’s vehicles.

An efficient and most adequate public Transport system is a dire need. But when available rail and bus mass Transport facilities provide only 37 million trips against a demand of 80 million trips per day, by no means can such a system be called adequate or efficient. In fact, there has been a decline in the percentage share of buses from 11.1 percent in 1951 to 1.3 percent in 1997for the whole country.

The speed limit in peak hours has decreased to 7km/hr in Kolkata, 13-15 Km/hr in Bangalore and 9-11 km/hr in Mumbai. Congestion on Indian roads leads to Rs.3000 to 4000 crore every year.

After tall claims by city fathers to construct tall buildings will certainly increase more vehicles on the over crowed roads of Mumbai. Parking may be provided for in the tall building but cars owned by them will certainly create havoc.

When we look at Singapore and cities of developed nation to plan our city’s Skyline, we are inviting the anatomy of congestion.

In 1998, a consultation paper by the UK government on fighting Traffic congestion and pollution through road user and parking charges estimated that 1.6 billion hours were lost by drivers and passengers on Great Britain’s roads due to congestion in 1996. London, in fact has been forced to ask motorists entering the city center to pay a congestion tax of £8 from February 2003.

In Los Angeles, USA, a study by the Taxes Transportation Institute says that hours lost by a peak-time Traveler form 47 in 1982 to 136 in 2000. The city also US$14,635 million per year due to Traffic congestion. The speed is reportedly average 9km/hr, or less Seoul and Shanghai, 10 km/hr. or less in Bangkok and Manila, and 17 km/hr or less in Kuala Lumpur and Sao Paolo. The economic costs are formidable. Bangkok loses up to 6 percent its economic production (in terms of money) to congestion. In Brazil, congestion increase public Transport operating costs by 10 percent in Rio de Jenejro and by 16 percent in Sao Paolo.

A direct consequence of the lack of city planning for urban Transport has been an acute shortage of road space in most Indian cities. The RITES report says the space occupied by roads, railways and other Transportation facilities in Indian cities is how at 3-20 per cent of the total area, as against a standard 30 percent in developed countries. The total road area in Mumbai is 12 per cent of the city compared to 23 percent in London and 25 percent in Paris.

People advocating for more parking space by constructing  high-rise building forget that these vehicles will be on roads at least for once in a day time. Each flat in such posh and costly accommodation will have 3 to 4 vehicles to ply.

We certainly do not want to impose congestion tax, as applied in London; The more is not merrier any way on the Mumbai road.

Editorial: Land issues and farmer’s unrests cancelling SEZ

By Dr. Sanjay Chaturvedi, LLB, PhD.

Chief Minister of Maharashtra, Ashok Chavan scraped the SEZ in Pune just before the assembly elections. The main reason being farmers were opposing the the SEZ. The SEZ was to be developed by Videocon Group in association with Maharashtra Industrial Development Corporation (MIDC). On August 25, 2009 Chavan said that the title to the land, identified for acquisition, would be returned to farmer.

The move was to please the farmers who were angry with the Congress-NCP government for taking away their land to develop industries. Farmers of four villages in Pune district voted the NCP Member of Parliament Vilas Lande from their constituency (Shirur) in the Parliamentary elections earlier this year. Videocon have been given alternative land in Saswad Taluka in Pune district.

The state government had proposed Videocon Sez in early 2007 on 1821 hectares in villages Wagholi, Kesnand, Bakori and Lonikhan. Farmers opposed the SEZ from the outset. They agitated at the collector’s office and attacked employees of Videocon. The protest forced the government to stay the proposed SEZ in November 2007.

Over 200 SEZs have been proposed in the state of which 44 are in Pune districts. The cancellation of Wagholi SEZ had set in motion demand to scrap SEZs in other areas too. Farmers of 45 villages in Raigad have demanded scrapping of Reliance SEZ in their area. Only 13 lakhs was offered for an acre of land by Relaince were as the going rate was 100 times more, sources said.

MIHAN Sez in Nagpur also seen social unrest while government of Maharashtra tried to save skins by offering developed land that is 12.5 per cent of the land acquired. It also offered them cash compensation and TDR can be sold without stamp duty.

The government amended the Project Affected Persons Rehabilitation Act, 1999, through an ordinance to make cash compensation and TDR possible. There is a sense of victory among families affected by the Mihan SEZ which was earlier known as the Nagpur Cargo Hub. The families are unhappy though; the government order does not provide land within the SEZ. The affected families have declared their will settle for nothing less than 12.5 per cent developed land within the SEZ and will not vacate their villages till this demand is granted by the government.

Like Videocon, Reliance and MIHAN, private SEZ declared by state government elsewhere in the country, land issues are killing the concept of SEZ. Or Hidden agenda of SEZ to grab prime land for residential purposes or for real estate development is known to farmers and they want their shares in the development.

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