Archive for the ‘Mumbai’ Category

What do you prefer- malls or homes?

December 24, 2007

Navi Mumbai(earlier known as New Bombay) was built to ease the population pressures in Mumbai. Navi Mumbai took time to pick-up but is now a 1.6 million city. While building Navi Mumbai, an effort was made to do some planning before the construction (I am told it is the second planned town in India after Chandigarh, it is funny  how we built towns in the country without any planning).

Within Navi Mumbai, Vashi has emerged as a major township and most people living in Navi Mumbai flock to Vashi over the weekends. The township was quite pleasant till a while back but it seems planning has been sent for a toss now.

Mumbai has developed around its local train network and as a result maximum crowding is around the stations. Also, you would find the local market, bus stand, residential apartments etc all around the railway station. The local train is the best way to commute in Mumbai and all this means stations are always crowded and messy.

So, in Navi Mumbai an effort was made to have minimal construction around the stations. A lot of open space was preserved around the railway stations in an effort to keep the stations efficient. The concept was pretty revolutionary to begin with and the railway stations became a hit. People came from Mumbai to see the stations and quite a few movies were shot around the area.

It was also planned to make Vashi’s railway station an information technology hub. There are a few companies housed there but I am told the concept did not take-off as expected.

However, the area around the station is seeing huge activity these days. There are a number of shopping malls being set up. At present there are 2 malls around the station (one is not fully functional) and about 4 more are coming up. Inside the township, there are 2 malls and couple of more coming up.

I keep wondering do we need these malls? That too at a time when housing prices in Mumbai and Navi Mumbai are zooming through the roof. (Economist even says don’t buy any property in Mumbai). The analysts often quip that it is a demand-supply issue and as demand is continued to be more in Mumbai, the prices continue to rise. But how would supply problems be eased if already scarce land is given for shopping malls. (Again, I do not say malls are not needed. They are needed as they provide huge benefits to consumers, but there has to be a balance)

Another problem is the nature of housing market in Navi Mumbai (In Mumbai it is slightly better because of some reputed builders). It is just too opaque and information asymmetry is at its highest. The transcation costs are extremely high and one is continuously scared about the quality of the product (the house that is).

There is an urgent need to regulate the housing markets especially in metros. There is a feeling that housing prices are artificially jacked up in these town as no one knows the correct price. Finding a decent place to live in Mumbai is a real nightmare. Most have no options but go through it, pay the brokers through their nose as it seems there is always a shortage of homes.

Mumbai has always been famous for its shortage of space and as a result the homes you find here are much smaller than available elsewhere for a similar price. However, now even finding those small homes is becoming a problem. As migration continues (every aspiring model, actor, finance professional etc wants to come to the city), the problem is only getting bigger.

The house is a basic need and when you add the infrastructure problems, the problem is extremely complex. The day there is a problem in the local trains and if it is a working day, only a miracle can help you reach home (for which you have already paid a fortune) at the right time.  Hats off to the management of local trains who work day in day out trying to minimise the problems, but the problems are quite common.

Lot needs to be done, before attempting to make Mumbai an IFC. It is too far fetched an idea.


Mumbai as an International Finance Centre…you must be joking?

May 7, 2007

It is actually amusing that people of high calibre keep coming out with such fascinating, visionary and fancy reports (pun intended). But this one on Mumbai as an International Finance Centre is the outright winner. Initially the report could only be bought, but now it is available for a free download. Number of articles on the same is maintained by Ajay Shah (a consultant to the report)

MIFC report is clealry a fancy idea. I think Mumbai first needs to be made a better city to live before it can be made into an international (whatever..) centre. It has too many challenges in terms of basic infrastructure. It is one thing to stay in South Mumbai (read Nariman Point, Malabar Hill, Napean Sea Road etc) and travel to work in the same nearby areas and it is a different thing to travel from a suburb in Mumbai (Western, Central, Harbour etc) to work anywhere in Mumbai (except for the suburb they stay in).

Navi Mumbai which used to be a relatively neat and clean place just 2 years back ( the time I came to Mumbai) seems to be becoming a pain to live in. All roads are extremely crowded and the place is full of cars, 2 wheelers etc. (Some people call this development, I really do not think so). I was reading the other day that

Navi Mumbai was suppossed to take the pressure away from Mumbai and it was expected that many people staying in Mumbai and coming to Mumbai would relocate/stay in Navi Mumbai. It currently has a population of something like 14 lakhs and it should have been 20 lakhs some few years ago.

I cant even imagine what will happen if the population was 20 lakhs with the current state of roads and infrastructure.

I would guess for Mumbai to become an IFC, it is important that the best talent (trained in financial markets) comes to Mumbai to work. As long as the advocates of the IFC can provide accomodation to the talent in and around South Mumbai (where most of the fiancial industry is housed), it is fine otherwise it just remains an idea.

I would suggest they should look at basics first. Have most of the committee members experienced what it is like to search for a apartment in Mumbai? Not just the rents are sky-high, but one cannot get anything without a broker’s help. And then you need to pay the broker 2 months of rent as his fee. With just a 11 month agreement you end up doing the same job every year. With local trains the only way one can commute, most need a house near the railway station. So you see, the basic need which is a house is itself so complex. Why can’t we have a better system of renting apartments in Mumbai?

The same concerns are even mentioned in Ajay Shah’s blog to which he answers: “Mumbai becoming unlivable: Could it be that some other city in India could become a financial centre? I am really confused by this approach, You want to make Mumbai an IFC just because no other city in India can become one?

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