Skip to main content

Is there an Indian meltdown in the making?

I had visitors today. Erstwhile neighbours who have now moved to their own house. As we sat discussing real estate prices , I realized that almost everyone I know had either bought a house or was planning to buy one. A good flat in any 'IT' city in India costs well around 5 million rupees.And everyone seems to have access to that kind of money, thanks to housing fiance companies.
What do these companies take to secure these borrowings? They ensure that that the borrower is employed and has the capability to repay. Most people working in the IT sector seem to fulfill the conditions. But the question is, will IT continue to bring in money from the west on ongoing basis? Especially given the economic conditions in America and Europe. Most of the real estate growth (at least the one around me) seems to be fuelled by IT employees. 
These people have migrated to Hyderabad, Bangalore or Pune to join some IT company. Along with a well paying job, many also spend substantial time on 'onsite' assignments. This results in earning in foreign currency and hence more savings. This surplus cash is utilised to partly fund a house.Some who have bought houses early on, have already repaid their debt and are investing in more houses by borrowing more. Today, almost everyone who has spent more than 5 years in an IT company has a housing loan on him. That should be close to a million people!
We are already seeing a trend of rejection of Visas. Onsite opportunities are becoming scarce. Business is trickling in IT and the sector is not seeing the same growth rate it enjoyed a few years ago. If the western economy does not recover soon, many of us will soon be finding it difficult to pay our mortgages. When we thought India survived the 2008 slow down well, it could hit us hard now through a domino effect.
Labels:
Location: Hyderabad, Andhra Pradesh, India

Comments

Post a Comment

Popular posts from this blog

The oscar for dilemmas

As I was travelling from Goa to Pune in a Bus, I overheard some conversation and could see a lot of dilemma on the face of a fellow passenger. As the story evolved, I could connect with him. Thus it went: They were a couple, he was with his fiance/wife/girlfriend (a non-ma/behen relationship). There was another girl (pretty) who wanted to a lady's seat. She could get it only if this gentleman would give up the company of his travel mate as there were no other female passengers on the bus. I have been through similar situation and have said no and felt guilty about it till the society at large did something equally unjust to me. But this incident in the bus the other day, sparked off some more such dilemmas that I have come across quite often. I thought of having a golden globe of dilemmas; put them on the blog and see which is the most common dilemma. First being the one above, the second dilemma that comes to my mind is of cheating in exams. No No. Me cheating is taboo enough! It ...
2 comments
Read more

The business of all that is complex

Very recently I have been following Jason Fried's posts on 37signals.com. I am impressed by his minimalist thoughts and the whole idea of customers 'growing out of' and 'growing into' your product. Per Jason, there are just a certain simple features that customers really want and a product company should strive to be the best at those features. But beyond these features, your customers will always have some desires and will keep asking for more features. One should learn to say no to such demands and crowd the Product with features that only a few of your customers will actually use. These frills not only hamper the performance of the product technically, but also make the Product manufacturer waste a lot of effort in the form of product support and other allied activities. This seems to have been working for folks at 37signals.com and many more such companies (SFDC, Flip Video recorders etc.) I then started thinking of this philosophy in the context of Indian IT co...
2 comments
Read more

RSS - an answer to the caste discrimination

One of my old post on Rashtriya Swayamsewak Sangh drew a comment today. It posed a few question about the stand RSS takes on the issues of caste system in our contry. The reader also asked if RSS could be a possible solution. And this, my dear readers in the fuel for this post. Let me put forth some facts about the organisation called RSS right at the beginning. RSS is a social organisation. There is no formal registration and participation is completely voluntary. It is not a political, religious or profit making orgnisation. There are no posts, there are only responsibilities (in fact that what they are called). These facts make it clear that this is a place where entry and exit is pretty easy. There are no costs involved with either. Which means there is no-one who can tell you that he will get you registered with the RSS and do you a favour. RSS is for everyone. In my opinion it is a perfect place where caste ism cannot exist. There are no reservations for a certain community. T...
9 comments
Read more