… in Dubai, the visitor realizes in nanoseconds that this is a city dedicated, enthusiastically, if not slavishly, to the car, the bigger the better. People just aren’t meant to be pedestrians here, but drivers.
As for those skyscrapers that crowd Sheikh Zayed Rd., each more outrageous than the next, they have the strange effect of cancelling each other out. Each becomes unexpectedly meaningless, rendering any discussion of architecture irrelevant.
As a result of this frantic race to outdo the guy next door, architecture has been turned into a sideshow attraction. Starchitecture is the least of this city’s problems. Dubai resembles nothing so much as a cross between Mississauga and Las Vegas, but on a massive scale.
The Ministry of Corporate Affairs (MCA) has started registering firms under the newly-enacted Limited Liability Partnership (LLP) Act. However, a flow of applications is unlikely till tax laws are changed, say experts. At present, the Income Tax Act does not recognise LLP firms.
Under the LLP structure, the liability of a partner is limited to his stake and no partner is liable on account of independent or unauthorised acts of other partners. Individual partners are shielded from the joint liability created by another partner’s wrongful acts or misconduct.
A New Delhi-based legal consulting firm, Handoo and Handoo, is the first firm to register under the new Act.
I think a lot of private equity firms who should not have existed in the first place will not exist. May be it’s five times too large and this means that 70-80% of the funds that exist today will not exist five years from now.
If you look at the cycle around 2001-02 (bottom of the cycle) profits after tax as a percentage of revenue of the Indian corporate sector was around 1.7%. Last year (at the peak of the cycle) it was 6.7%. So if you assume that the cyclicity will get repeated, you would assume that the profitability of the private sector can get hammered.
The growth (of GDP) used to be 9-9.5% in real terms,15-16% in nominal terms, 22% in currency appreciated terms (the currency was also appreciating in 2007) and, if you picked the sectors right, you could get 5-10%. Finally, if you picked the companies right, you could get another 5-10% on that, which theoretically brought you to almost 40% returns. Assuming that we made some mistakes, still it was possible to get 30% return.