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The major challenge the Government o f India is facing today is the inflation. Though the growing economy of the country has withstood higher rates of inflation in the past and anything like 7.5% is not a great trouble if it did not precipitate even a higher rate of inflation tomorrow.  Most importantly, there is no time for pulling each other’s leg as to who is responsible for this situation and who must accept the blame as is the situation in the political arena of the country.

The economic growth of the country and the welfare of common man have to suffer heavily if the situation remains the same. This crisis may turn uncontrollable if appropriate measures are not taken that too in timely fashion. RBI other than the measures like controlling liquidity and suppressing demand should look how to raise the confidence of the investor and reverse the expectations about continuing inflation.

The first cause which is constrained supply, which actually is controlling liquidity and managing the demand side, would definitely bring the prices down. This may also result in growth of output and employment. The RBI’s attempt to squeeze liquidity is a step in right direction. Rise in the CRR RATIO (cash reserve ratio) may affect the profitability of the banks where cash would have no returns. If your aim is to reduce expenditure, preferred option would be increase in the rate of interest; however, there should be policies to neutralize its effect on the increased inflow of foreign capital. The appreciation of rupee would cut down exports which in turn would result into downsizing and rising interest rates if RBI would not interfere to buy up dollars.

There is another policy which is often preferred over others- to control inflow of foreign funds. This can be done by either imposing a Tobin-type tax where taxes should be raised on short term capital gains. In financial management it is an art to fine tune the reducing of liquidity with no or minimal possible cost of output and employment. 

In a country like India where economy is globalised, there should be a mechanism in existence which could protect against the sudden increase in the cost of essential goods and it should be regarded as indispensible component of public policy.

How would like to own a hotel? Can’t afford it? No problem- what about owing a room in a hotel?

If this prospect sounds interesting, here’s the low down on the concept of a Condotel. A relatively new phenomenon that is fast ‘catching fire’ in realty circles, as a safe and secure ‘investment’, Condotel are as good as any commercial hotels, but are jointly owned by a group of people whose stake is usually limited from 1-2 rooms in that hotel. So, a 300-room Condotel could have as many as 300 unit owners.

It works like this. A company normally decides to come up with a Condotel and launches the project to the public. It then invites investors to won a stake by purchasing rooms in the hotel. Condotel units are generally sold during the pre-construction phase of development. They are often built on prime locations, such as facing a beach or in the heart of a city and often in places where the flow of tourists is really high. The difference between a hotel and a Condotel is that hotel typically has one owner, either individual or corporate but Condotel hotels are sold off unit by unit.

So what is in it for the investor?  Well, for starters, who wouldn’t like to be known as the ‘owner’, ever of a part, of a project, which has great positioning and demand? As the owner of a condo hotel unit, you may place your unit into the hotel’s rental programme where it will be maintained and rented out for you, just like any other room in the hotel. As owner, you receive as share of the revenue that the rental of your room generates. Also, depending upon the terms and conditions, many Condotels these days offer attractive proposals such as a free one week stay for the owner of the room anytime during the year.

This is a popular and successful concept in the United States. Apart from providing sufficient funds to the company, which is launching the project, a room owner of a Condotel can enjoy benefits such as hassle free ownership, no landlord issues, rental revenue to offset some or may be all of his ownership expenses.