Banks directed to set up Entrepreneurship Development Institutes

The State government is focusing on the self employment of the youth and has asked the banks that are having more than 15 branches in the state should set up the Entrepreneurship Development Institutes (EDIS) in line with the Rural Development and Self Employment Training Institute (RUDSET Institute). The official sources said that the banks that have not opened their EDIs should speed up the process of setting up a similar institute in the state.

The State Bank of India (SBI), UCO Bank, Andhra Bank, Canara Bank and Syndicate Bank have set up such institutes; Union Bank of India has started the process of setting up a similar institute in the state.

The banks that have not yet opened their EDI have been instructed to set up such institutes in the rented premises without further delay. They can also look for land/shed/building in the districts where they propose to set up these institutes.

In the recent meeting of the State Level Bankers’ Committee (SLBC) held in October it was discussed that the interested banks will have to apply to the collector of the concerned district through the District Industries Centre (DICs).They can take support or assistance from the National Bank for Agriculture and Rural Development (Nabard) and involve it in the process while opening such institutes.

Further, in the situation of insufficient finance with the micro, small and medium enterprises (MSMEs) in the state, the banks have been instructed to improve credit flow to the sector. The pending applications for loans under MSME category will be cleared off at the earliest.

In addition banks have been directed to take maximum advantage of the Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE) as it helps the entrepreneur to get collateral free loans up to Rs 50lakh. It is being expected to boost the finance under SME sector.

The SLBC has formulated a plan of action to improve the credit-deposit ratio in the state and also to increase the quantum of differential rate of interest (DRI) loans to 1 percent of the total advances.

According to the plan of action, the cent percent financial inclusion of Kendarapada, Koraput, Kandhamal, Kalahandi, Nuapara, Baragarh, Jharsuguda, Jagatsinghpur, Bhadrakh, Balasore, Dhenkanal, Mayurbhanj and Gajapati would be completed at the earliest and for the entire state the process must be completed by 2009.

Whereas the banks who have accepted the handloom clusters must extend necessary finance to those clusters, and the banks who have not yet adopted the clusters must which adopt the clusters which have been identified by the textile and the handloom department of the Orissa government.

Further more, to boost crop production in the state, banks have been asked to finance the schemes related to farm mechanization, Jalanidhi program and other subsidy linked scheme sponsored by the agriculture department of the Orissa government.

Home prices to cut by 25% this Diwali

There is good news for people who still have plans to buy home that most realtors are advertising cash discounts of 5-10 per cent on upfront payment and buyers can get up to 25 per cent discount if they book properties and can wait for two to three years until possession. Consultants are of view that developers might even give 15-20 per cent discount on the price as they are eager to clear inventories.

Generally, the October-December is the period when the sale accounts to around 60 per cent. But this year the developers are under tension due to sharp decline in property sales. Since the beginning of the year, home sales have halved due to high interest rates and a sharp rise in the monthly loan payouts of borrowers.

Recently a national poll was conducted among top property brokers by Mumbai-based brokerage Edelweiss Securities, in which nearly 90 per cent said they have seen a drop in transactions in the last one month and almost 80 per cent have witnessed a reduction in enquiries during the same period.

Oberoi Constructions had planned to launch a 300-apartment complex called Oberoi Island in the Goregaon suburb of Mumbai during Diwali. The realtor was considering offering apartments under construction, which were expected to be completed in two years, at Rs 9,000 per sq ft from the current price of Rs 12,000 per sq ft.

Some of the developers such as Mumbai-based Sunil Mantri Realty are more honest about the price cuts, as there company has already advertised a 6 per cent discount for its 206-apartment complex Mantri Royale in Bangalore, was launched last Thursday. The company will be selling flats at Rs 2,590 per sq ft, instead of the normal Rs 2,750 a sq ft, for the next 15 days and is planning to extend it further, depending on the buyers’ response.

Mantri Realty is also planning to give similar offers at its upcoming projects at Gwalior in Madhya Pradesh and Solapur in Maharashtra, slated for launch in the second and fourth week of October respectively.

“It makes much more sense to give discounts and waive off stamp duty to persuade customers to buy apartments when the market is facing a slowdown. Every buyer demands a little more for his money and we are doing that,” said Sunil Mantri, promoter of Sunil Mantri Realty.

In view of sharp decline in property sales, the Maharashtra Chamber of Housing and Industry (MCHI), a trade body of realtors, has already directed its members to bear the stamp duty charges and pay a part of the interest cost on loans in order to improve the declining sales.

In the National Capital Region (NCR) of Delhi too, where price alteration was deeper than Mumbai, developers are giving out discounts to attract customers. Delhi-based Pearls Infrastructure is also giving 6 per cent discount on down payments in its Nirmal Chaaya Tower at Zirakpur and has announced 8 per cent discount in the Pearl City project at Mohali in Punjab.

However big developers such as DLF, Ansal API, Parsvnath Developers and Raheja Developers have not yet advertised discounts, they are launching their new projects, for the mid-income segment during Diwali to attract buyers in the mid-income segment.

"We want to launch our projects during Diwali because properties launched at this time get better response. At a time when sales are down, Diwali comes as a major sentiment booster for developers as well as customers," said Dimple Bhardwaj, spokesperson, Raheja Developers, which is launching a 412-apartment project at Gurgaon.

Whereas some realtors and consultants are of view that the discounts and offers will not help improve property sales since home loan rates are high and property prices are out of reach of ordinary buyers.

“This Diwali will not be like that of previous years. The current market sentiment is down and the developers are feeling the heat. I do not think that the discount offer of Rs 1-2 lakh will make a customer buy an apartment that costs more than his pocket,” said Anshuman Magazine, managing director, property consultancy CB Richard Ellis.

Akshaya Kumar, MD of Park Lane Property Advisors, added, "This Diwali will be a damp squib for the property market. Only in 2010, developers can do some good business. Developers may offer 5-10 per cent discount this time depending on their strength,'' Kumar says.

Prakash Gurbaxani, founder and chief executive of Bangalore-based QVC Realty, points out competitive pricing is the key to sell property than discounts. QVC is launching its 100-villa project QVC Hills, with each villa costing Rs 2-4 crore, in Bangalore during Diwali. "Nobody will wait for a Rs 5 lakh discount to buy a Rs 2 crore house. You have to price the property right and product should be good,'' he said.