Soaring Corona Crisis - Towering ‘Daro Na’ Opportunities
In any crisis, communication plays a major role. In fact, we always say communicate, we must during crisis; and always. This is important in a democracy likes ours. (The brand of democracy that the US practises is different and it is topic for another column). Communication is an all important aspect of democracy particularly when we talk of adhering to transparency, maximum governance (minimum government?). The on-going corona and the lockdown crisis is no different.
As students of mass communication, we have been told that crisis comes uninvited. This is what I have been stressing in media training sessions to corporates. But if you look at today’s scenario, I tend to disbelieve that theory and dare say we are inviting crisis. I am not talking of corona crisis alone about which much has been said including the criticism that we have ignored the viral attacks from the days of Saars (2003) and Eblola (2010). Did someone say, Contagion?
This is not the time to dig into the past. We must look into the future with a sense of urgency. There is no room for any complacency. There are many issues that today’s communication needs to address. The migrant worker, for instance. The issue has suddenly exploded like an atom bomb. First, in Delhi and recently in Mumbai and Surat. As Midday headline screamed on Mumbai migrant workers outpour at Bandra: CAN’T EAT, CAN’T WORK, CAN’T EARN. Enough to stress that the issue does not merely deserve, but demand, an immediate attention as it involves a whole gamut of issues such as food, water and shelter. The order may change, but the topics remain intact. Clothing is not such a major cause of concern. We do not any more come across even beggars without proper clothing.
As a society, we have failed to gauge the impact of rural migration to urban areas. Of late, we were busy planning smart cities without smart socio-economic network while spending those of crores of rupees. It was a spend, not definitely an investment. The small-time jobbers – as we dismissed them as – like the welders and tyre-tube workers form Kerala, the electricians from UP, the masons from Rajasthan, the plumbers from Bihar, the newspaper delivery boys from Tamil Nadu, restaurant staff from Mangalore and Udupi and the labour from Odisha formed part of our urbanisation that we rarely realised their importance. Some estimates say there are 4.4 crore unorganised labour in construction sector alone. We did not bother to think about the way they lived and ate. Short-sighted politicians did to raise the issue of other state people, not to do any favour to them but showcase them as a threat to local job-seekers.
As a communicator, while working on the IPO of Lavasa City as long as a decade ago, we planned some headline stories such as:
* Unaffordable Housing: 38 million people cannot afford houses at market prices
* Millions will need trillions: Urbanisation will need $1.2 trillion capital expenditure in 20 yrs
* Manpower explosion: India to have 180 million new job seekers in 20 yrs
* Wanted: Thriving Cities
* Big becomes large: 5 big states to have 50% people living in cities
* India needs to add 2 Mumbais a year!
I did not invent these headlines. I dug them up from the industry scenario that Lavasa researched. Lavasa IPO never took off as the company got entangled into a whole lot of crisis. But the issues discussed in the Draft red Herring Prospectus ought to have made any sensible urban planner go tizzy.
From a small builder to the smallest buyer, the media, the urban planners, the governments and the bankers - all knew that the affordable housing is nothing but an unrealisable dream. How many could afford a decent house at the price points that the builders offered? In fact, some builders began complaining that housing had become unaffordable for them. The sub-Rs 20 lakh house in a city’s outskirts thus remained only on paper. And the communication was limited to empty political promises and a multitude of committees and expert committees.
While handling MCHI-CREDAI’s communication, we informed our media friends that the affordable housing plan by the Maharashtra Government was gathering dust in Mantralaya’s shelves. Midday picked it up and blew it on the front page. The Government noticed it and the CM was kind enough to invite the builders to a meeting at the government Sahyadri guest house. Guess what happened! They appointed another committee to take the issue further. That was the last that one heard about the government’s affordable housing.
The definition of affordable housing itself took and upward turn. Realty consultants such as ANAROCK define it as sub-Rs 40 lakh segment! Today, over 6.1 lakh affordable units are under construction across the top 7 cities, of which NCR and MMR alone account for nearly 59%. These units were launched between 2013-2019, says Anarock.
There is another aspect to this cost of ‘affordable’ housing. On a housing loan of Rs 40 lakh, a buyer would have to pay an EMI of Rs 40,000 a month. The unwritten EMI to monthly income stipulates 20% to make a buyer safe. This translates into the fact that the buyer must have a monthly income of Rs two lakh. How many of the urban employees enjoy this kind of comfortable salary?
This long story’s equally long, unending affect is that most of those who couldn’t afford a house landed up in slums or unofficial gaothan expansions with unplanned, fragile concrete structures that could come down crashing. Mumbra and Thane buildings collapses are too fresh in our minds to be forgotten easily and one need not remind the planners, the governments that nearly a third of Navi Mumbai lives on such tinder boxes.
Greed did enter real estate business. Many builders smelt easy money pouring in as investors looked at the upcoming urban boom (as indicated the Lavasa media pegs). Investors looked at a minimum 30% CAGR and flocked builders. That’s where we saw many projects suddenly coming up. All these crashed like packs of cards as the end prices became unaffordable. Everybody talks about the crash. This is the real reason for the crash.
A hundred plus industries hinge onto real estate – from building materials to electric, tiling, steel and nuts and bolts apart from the hinges. The sky is not the limit for the economic development as the skyscrapers come up. The halt of the industry naturally leads to towering crisis.
Can we say let bygone be bygones? At least now, can we begin to take a realistic approach and revive the construction industry so that the migrant labour, wherever they are, will begin to find some source of income?
SBI has already told builders to clear their inventory. Easier said than done! Here, I see the builder community in a Catch-22 situation. They can neither lower the prices nor can they hold on to the unsold stock too long.
But someone, somewhere has to make a beginning. Let the government open its purse. At the risk of sounding like a typical newspaper editorial, let the government make the whole atmosphere conducive to honest growth by facilitating a proper policy and communication framework. For instance, the RBI’s repo-rate cut benefit is not easily passed onto the consumer.
Can the realty take two steps for each step by the government? Real estate reforms has been a favourite subject for many housing ministers across, including Vice President Venkaiah Naidu, whom I heard addressing a NAREDCO summit where he eulogised the developer community’s role in the nation building activity. Now, let us see some action on that front.
For a long time, we have been hearing the slogans of an inclusive growth. I will not get into catchy sloganeering that politicians indulge in (Gareebi Hatao, Sab Ka Vikaas…and so on), bu
Let the government pay for the migrant labour with direct money into their accounts on the lines of MGNREGA and help them resume work. Let’s help the construction industry revive. Modi government package for the real industry must include all stake holders – bankers, builders and of course the buyers. Each one needs to be incentivised. The reverse repo-rate benefit must be extended to the end users. The industry bodies must crack the whip. The government and the nation as a whole will benefit from the chain impact of revival of the real estate industry. There is an urgent need to bring about transparency, credibility and above all commitment into the system.
Let us work towards a decent living for all. Let real estate do the kickstart.