Rental tax in Bombay

While countries like Hong Kong are lowering taxes and attracting MORE business the locals in Bombay feel the opposite works. In yet another attempt to drive people out of the city the Bombay Muncipal Authority (BMC) is debating whether to tax rental rates at 41.5%.  The way they are planning to tax people is the following:

Rs 100,000 – Residential rent
Rs 41,500 – The additional amount someone has to cough up and pay as the BMC Tax
Rs 33,000 –  Income tax paid by the lessor on the Rs 100,000

The gross rent would be Rs 141,500 and after taxes the net amount to the landlord would be Rs 67,000, a staggering 53% tax rate.  You can be the judge on how many people will actually end up paying this amount.

In HK you actually get something in return, but in Bombay that ain’t the case, below are some of the services offered by the BMC:

  • Building and maintenance of streets and flyovers – Been to Bombay? Then you know there is more turbulence on the roads then the airspace
  • Public municipal schools – scary, NO ONE I know sends their kids to these schools
  • Water purification and supply – EVERY house has their own water purifier
  • Hospitals – if by hospital you mean a place to get urgent care, then don’t visit a BMC hospital
  • Street lighting – drive from Bandra to Mahim at midnight on the main road
  • Maintenance of parks and open spaces – What parks are they talking about?
  • Sewage treatment and disposal – right into the ocean
  • Garbage disposal and street cleanliness – HAHA

Anyways, you get the point. 

I keep referring to the BMC but in reality the name was changed several years back to MCGM (Municipal Corporation of Greater Mumbai) but 99% of the population still refer to it as the BMC.  Either way the acronyms have their own meaning:

BMC – Badly Maintained City
MCGM – Maharashtrians Can’t Govern Mumbai

And where does the head honcho of this organization stay – Carmichael Road (aka M.L. Dahanukar Marg).

To Buy or Not To Buy in Bombay

People use the newspaper as a source of information but if you were looking to buy property in Bombay the papers were of no use. Below are two recent front page headlines:

Friday, May 2nd (Times of India) – Flat prices frozen till Diwali
Saturday, May 3rd (DNA) – Property prices head south, fall of 15-20%

The Times of India article indicates that an informal agreement was in place between the local builders to keep rates at current levels.  The undertone of the article is “buy now, why wait till October because the rates will be the same” if people really believe that they have no clue what is happening in the global property market.  Rates will fall in Bombay, the question is how much and how quickly.

Pujit Agarwal of Orbit Corporation the company behind the Arya building shown was quoted 24 hours later in the DNA newspaper. He said rates have fallen 15-20% in certain parts of Bombay such as Lower Parel and Santa Cruz and as much as 30% in places beyond Kandivli and Borivli. 

Amazing how quickly things turn in the Indian property market…or more appropriately how useless the local newspapers are for anything.

Ambani's 2 Billion Dollar Home

I wrote about Mukesh Ambani’s monster home called Antilla back in June 2007.  At that time I mentioned the house was “estimated at USD 1 billion dollars – that figure is definitely way off.” I was right, in the latest Forbes magazine there is talk the house (if you can call it that) will be closer to USD 2 Billion (Rs. 8,000 CR) not the paltry billion dollars.

The renderings in the Forbes article of Antilla are pretty cool looking, based on some pictures I took over the past week the structure is ONLY 50% complete as compared to the renderings. 

Click for pictures of the current status of Antilla as it’s being constructed. 

Food Fight

This ain’t no amateur style food fight but on a global scale.  Rice, wheat and corn are at near record highs.  Oil this week touched USD 120 a barrel and is currently around USD 112.  Riot’s have broken out in some parts of the world for food, i’m a bit surprised nothing like that has happened here in India.  With 80% of the Indian population earning less then USD 1 dollar a day, food ends up costing more as a percentage of daily spend as prices rise for those 80%.

In 2008, 24% of all corn harvested in the United States will be used for biofuel.  And that number will hit 32% by 2009.  People are starving and to take something that could keep people alive and instead turn it into fuel for Ferrari’s and Ford’s seems a bit short sighted.

The above thumbnail (when clicked) shows the oil production for the past 40 years and you can see not much has really changed in light of increased population, cars, data centers, industrial complexes, etc…stuff that needs oil.

Apparently, oil companies are REALLY bad at predicting demand and producing enough supply.  Funny how Toyota, Sony and other manufactures can predict customer demand and scale their operations to meet targets. I guess something to do with lack of competition.

Reverend Wrong

Tough week for Obama when you have friends like Reverend Wright slamming the people you want to be your friends – the voting public.  The controversy is overdone and has given Hillary another life-line to save her sinking campaign. The argument is “oh my god look at Obama’s friends” but look at Hillary she’s married to a guy that has slept with more trash then the Teamsters pickup. 

Controversy aside I think Reverend Wright should release a comedy album because I still can’t stop laughing at him making fun of white people who have no rhythm. Check it out on YouTube…funny as hell y’all.