The level of macro-economic growth that is occurring in India compared to other parts of the world is a positive factor for the rating - Standard and Poor’s as reported in the newspaper Hindu Business Line on 27 May 2010. The report further says, the increasing foreign direct investment into the country speaks of the faith that investors have in the Indian story. Although the economic growth looks fragile in other countries and regions of the world, India is not likely to suffer any major contagion .
India is the largest Democracy in the world, politically stable, a country on the high growth path looking at an annual growth rate in excess of 8% presently. The Government has committed in excess of USD 1 trillion to focus on rapid development of infrastructure to sustain the GDP growth and take it beyond 10% p.a. It is blessed with natural resources and a population of 1.2 billion of which more than 60% of its citizens are in the productive age of 15 to 40. This demographic statistic makes it a powerhouse of talented work force which can drive and sustain growth.
To add to it this huge population has one of the highest saving rates in the world and is a consuming population which has insulated the country from Global recession or economic disturbances in other countries. The economic progress made by the country has created one of the biggest Middle Class societies in the world which is driving demand for products and sustaining the growth.
A huge English speaking population, tight labour laws, a decent legal system, implementation of corporate governance and well established financial system and mature capital , money and forex markets have attracted the attention of the giants of the world who are looking forward to participate and benefit from India’s growth story. Foreign direct investment (FDI) flows have been quite robust in the last two years despite the general decline in global capital flows. India received FDI equity inflows of $25.8 billion in 2009-10, said Pranab Mukherjee, Finance Minister at the seventh annual India Investment Forum
With this background, I would like to comment on why Indian Real Estate is the best investment option today. It is apparent that India has become a hot destination for investment in its capital markets, business investments and investment in real estate by Non Resident Indians and Persons of Indian Origin who too want a piece of the action. Having said this there are some quarters where there is fear that the markets in India are heating up and valuations of capital markets and real estate may be stretched. Contrary to these beliefs is the fact that there is still a huge demand and supply gap in the Indian Real Estate whereby the immediate demand for housing in the country is around 30 million units and supply is led than half a million housing units. This demand will ensure a buoyant market and sustainable increase in prices of real estate in the times to come. Secondly the infrastructure development around the country has seen industrial development and services industry spread across the country which has seen the emergence of the so called Tier I and Tier II cities across the country which hold the promise for growth of investments in real estate. If one can look beyond the popular metro cities of India, you will find great value in Real Estate from the investment point of view in emerging cities and future metros. This does not mean that the metro cities of India like Mumbai, Delhi, Bangalore etc. are overvalued. These will continue to remain popular real estate investment destinations, its just that the emergence of options beyond the metros increases the variety on offer.
We can conclude that given the macro economic indicators and Government initiative which are in the right direction, the growth story of India is sustainable in the long run and Indian Real Estate could be an ideal investment option to balance ones portfolio
Disha Direct Marketing Services Pvt. Ltd
6th Floor, Aspi Mansion, Ramwadi,Off Gokhale Road, Naupada, Thane (W) 400 602.
Tel:+91-22-2539 3837
(M): +91-9987782022
Fax: +91-22-2541 3975
.
