India Economy Thread II

[pkalein]

most of them are used to make black money white

[MeMumbaikar]

i know.

but still I mean geez where I live there are now 3-4 big malls within a 2km radius.

It would be fine if all of mumbai was middle class and above.

But its not sustainable.

[pkalein]

haha thats true and the question is will you ever visit all of them at least in a month.

[pkalein]

DELET

[hobbes100]

Despite all that, organized retail floor space in India, even in big cities, remains tiny compared to developed, or even most developing countries. Bangkok alone has more mall floor space that all of Indian metro cities combined.

[gentem]

that will make malls open in tier 2 cities which lack good quality 3D multiplexes more money for bollywood

[MeMumbaikar]

well dont know the issues in rest of India

in mumbai mmr i feel there is a surplus of malls.

Wont be surprised if by 2020 everybody living in mumbai mmr lives within say a 3km radius of a mall.

which works out to be 156 malls.

[Indiadreams]

not exactly surplus, there was no proper research before starting malls. The shopping behaviour of the neighbourhood has to be assessed before setting up the mall.

Infiniti 2 Malad was lapped up immediatley and is 100% full inspite of 2 malls within 1 km radius. Both Inorbit Malad and Infiniti 2 command one of the highest mall rentals in India while observing the lowest vacancy rates.

As hobbes said, orgainised retail space is one of the lowest in India. It may take another revolution with well-researched plans to change the shopping habits of people. It is sorry to see the state of malls built in previous boom without any research especially in Gurgaon and Vashi.
Everybody wondered why pheonix was building such a large upscale (not luxury) mall in Kurla. None expected it to perform well, given the neighbourhood. In fact, it has perfomed better than expected. The mall is atleast 5 years early for that location

[MeMumbaikar]

hahahaha yeah

even i laughed at that. why of all places kurla. maybe they expected people from bkc to shop there. (office workers?)

[Indiadreams]

Probably Phoenix thought it will recreate the Lower Parel success story in Kurla using BKC branding. But the big diffeence is that Lower Parel is being accepted as high end residential area and it is the only mall of decent size and brands, for the whole of island city (apart from that small Atria).

In contrast, Kurla is not considered to be upmarket inspite of proximity to BKC. And the central suburbs have decent malls close to the residential neighbourhoods.

[adam_india]

I've noticed that as most people have no deep interests or hobbies and given the real lack of clean open spaces in most indian cities, means malls become a sort of a weekend getaway for most people (personally it's too boring for me) in a sanitised environment where everything is glittery and squeaky clean. At least in Pune, the malls are chock-a-block on weekends no matter what the prices are and people just hang out in air conditioned spaces for a few hours every weekend isolated in a dream world away from real India. So malls and mindless consumerism is here to stay and thrive. I just hope we don't go the American way of credit card debt in a couple of generations.

[Indiadreams]

Crowd in the malls is not an indication of its success. Except for food courts, none gains from mere footfalls.

Consumerism in right amounts is required for boosting economy. I am not sure whether it has to do anything with the lack of hobbies.

[MeMumbaikar]

I agree with the lack of space and hobby thing.

Mumbai especially there is a big lack of space.


However there are things you can do at the malls to fulfill your hobbies. For eg a lot of malls have bowling alleys.


Even gyms are starting to pop up in malls.


Maybe rather than just being for shopping, malls in India will become a one stop shop solution.

From your everyday goods at big bazzar to fine dining to fast food to cinema to sporting activities and hobbies like swimming pools etc.

[kannan infratech]

Malls were more of a stock market play by RE Developers. They got investments into their companies by showing these malls and now it is investors' problem.

RE Developers have taken their investments out

[pkalein]

In Aurangabad we have Jaguar showroom in a mall.

Who will fulfill that hobby :P

BTW yes I too agree with hobby thing. I hope they open small gardens in malls then so many number of malls will be justified. One stop for everything you need

[bangalore]

Originally Posted by hobbes100

Despite all that, organized retail floor space in India, even in big cities, remains tiny compared to developed, or even most developing countries. Bangkok alone has more mall floor space that all of Indian metro cities combined.

Must have been true a few years back. Hard to believe it is still the case, looking at how many malls with multiplexes Bangalore alone got today, with many more in the pipeline

[Indiadreams]

So westerners and SE Asians dont have any hobby as they have huge malls? The per capita organised retail space in India is just a small fraction of that of SE Asia, Europe, Middle East and the US.

Though I could agree with lack of public spaces to be one of the reasons for crowding in malls, though it doesnt contribute to the business of mall.

Consumerism is way forward for developing economy. It will slowly come up, if India has to develop. Majority of Indians value only the product while shopping. They dont mind the service quality. It has changed in certain pockets of the society especially in metros in the last boom. It will continue to change, if Indian economy develops.

[desiyogi]

Originally Posted by adam_india

I've noticed that as most people have no deep interests or hobbies and given the real lack of clean open spaces in most indian cities, means malls become a sort of a weekend getaway for most people (personally it's too boring for me) in a sanitised environment where everything is glittery and squeaky clean. At least in Pune, the malls are chock-a-block on weekends no matter what the prices are and people just hang out in air conditioned spaces for a few hours every weekend isolated in a dream world away from real India. So malls and mindless consumerism is here to stay and thrive. I just hope we don't go the American way of credit card debt in a couple of generations.

+1

[hobbes100]

On a different topic, the massive grid collapse in India is splashed all over international news sites, often being referred to as "world's largest power outage ever" in terms of size of population affected. Yet another black eye for the country - bad economic news keeps on coming!

Thousands of crores GDP was probably lost due to the outages, and I'm sure many lives were lost as well.

Funny thing is, amid all this power crisis, the do-nothing power minister gets promoted to home ministry!! Go figure!

I guess the whole govt is made up of do-nothings, so doesn't matter.

Here's a sensible article from yesterday's Business Standard. The author is the first chairman of CERC:
http://www.business-standard.com/ind...atised/481920/

Lot of good policy work was started in the power sector about 12-13 years ago, but 2nd generation of reforms have not materialized.

All electricity assets need to be privatised

The whole Northern Grid collapsed yesterday for over six hours. From Rashtrapati Bhavan to small villages in the nine states of North India, there was no power during that time. Restoration has been slow. Hospitals, hotels, schools, colleges or homes, there was a blackout everywhere.

The last time the Northern Grid had collapsed was in early 2001, on a cold day of the season. Then, I was the chairman of the Central Electricity Regulatory Commission (CERC), created in 1998. I called an emergency hearing (being in a quasi judicial position, I held hearings along with my colleagues on the petitions filed before us). This particular occasion was of a suo motu hearing that we had called on our own, without a petition being filed. All important suppliers of power, important consumers, including the state electricity boards, the national inter-state transmission company and state transmission entities had to attend it.

What emerged was that the transmission lines in Uttar Pradesh had been maintained poorly and the initial collapse had taken place there. Since demand in the North was low because of winters, it would have been sensible to reduce the quantity of power sent on to the transmission lines in the Northern Grid. This would have ensured there wasn’t any overload in relation with demand, which caused the frequency to rise to dangerous levels and the grid to fail.
NTPC, as the principal generator supplying the northern states, did not cut generation. PowerGrid, the inter-state transmission utility that controlled the state load dispatch centres and had moment-to-moment information on demand and supply of power, was not alert enough to take corrective action.

The central government, which owned NTPC and had determined its tariffs and incentives, gave it an incentive to produce at more than its plant load factor of 64 per cent. This was because the imperative in those years (as it is now) was to generate as much electricity as possible. But NTPC was already producing at 80 per cent plant load factor (PLF) and was earning incentives without any special effort. Any backing down of generation by NTPC would have meant serious loss of earnings. So, it kept pumping electricity on to the grid, even as demand was low. This led to the frequency soaring and the grid’s collapse.

CERC warned all concerned that since this was the first such incident before it, it would not exercise penal powers. However, it made it clear that any repetition would lead to the severest penalties in its power.

We did two more things. We changed the incentives for more generation by raising the starting point to 80 per cent PLF (to be reviewed periodically). We soon came out with an availability-based tariff order. So, we replaced PLF with availability as a determinant. This meant a plant was to be available to the extent it declared (if it was not, there would be penalties). We called for day-ahead forecasts at 15-minute intervals from all important generators and users/distributors with some flexibility to change forecasts two hours in advance. If anyone using the grid went above or below the forecasts to an extent that affected the frequency (moved away from a target laid down), there would be severe financial penalties.

The proof of the pudding is in the eating. The grid remained stable for over a decade. Frequency on all Grids stabilised at much more reasonable levels than before. Since then, CERC has further raised the penalty for missing forecasts. Power trading is in much vogue now. Additional transmission lines have turned the country into almost a national grid. The new lines for the South, currently under way, will make it fully national in a few months. So, like in any market, power can flow from areas of surplus (even for a limited time) to those that are deficient. The market would determine the price for this exchange.

However, these do not resolve the fundamental problems — government ownership of almost 90 per cent of the country’s electricity assets, free or cheap power to large voter groups, free power for agriculture, non-metering of many who are supplied and theft of electricity that takes place in collusion with electricity board employees and goes unpunished. Overstaffing and indiscipline are all consequences of government ownership. What is worse is that the electricity companies are headed by itinerant Indian Administrative Services (IAS) officers with no career commitment to the power sector. And, these huge companies are run like government departments. We must have professional management and authority delegated to the lowest organisational levels. The best answer is to privatise all electricity assets.

At the same time, we must make state regulatory commissions truly independent. At present, almost all are headed by elderly retired bureaucrats (usually from IAS), and members are retired government servants. We need these commissions to be independent of state governments and headed by people who exercise just the powers the law gives them. The central regulator has fortunately been allowed such a freedom.

Also, the regulator must have much stronger penal powers. When a grid collapses or there are frequent violations of forecasts, the CEO of the company should be made personally liable. If this continues, he might even be jailed. The regulator’s penal powers on Monday are pathetically small and are imposed only on companies, and not on individuals.

Electricity is too serious a business to be left to politicians or procedure-oriented bureaucrats, who are not held individually accountable for anything.

The writer is the first Chairman of the Central Electricity Regulatory Commission

[gentem]

chidambaram back as FM he done a good job as home minister too.. he could have been given both home ministry and finance

and rbi has cut something yesterday