'Realty' or Mirage?!

A food for thought: A 30x40 plot in my native place (for that reason,  take it any taluk / district town or tier-3 city) will cost 8-10 Lac. But same sized plot in Bangalore costs 50-80 Lac!!!

Why?

I am sure you will call me crazy for asking that. 

You will say "economic worth" of two are not comparable!

OK, then why the same doesn't hold good internationally? A third-world country's property prices are relatively costlier(35x PE) than developed country's ( <25x PE) ?!!!

The real estate investors or even you and me would call equity market ballooned @ PE 25x and may thereafter it would crash / bubble will burst. Real estate today is above 35x PE. Here I am taking about physical real estate not real estate stocks.

Which ever locality of Bangalore you may be living, I am sure this holds good. Consider the rent from property as the earning. Think of the price of that property. I am sure you will arrive at 35 PE. The situation is worse in Mumbai and Delhi NCR (May be more than 40x). Even if the capital appreciation is factored in (may be incorrect to do so on PE based calculation), it still be at 27-30x.

This is highest in the WORLD!!
More than even Tokyo or London or Paris... few of the costliest cities of the world.

Interestingly look at the real estate stocks... Take any big name... They are quoting dirt cheap. Many are @ half their Book Value. If the real estate is such an awesome investment same should reflect in their stocks... Well that's common sense.

Most of the buyers are "investing" to sell for huge profit. Thanks to cash and black / grey money, real estate deals have become 'speculative' transactions. Greater fool theory perfectly at work.

The person who can buy when majority can not, then he has easy money or wealthy man greedily & foolishly "investing" without caring the fundamentals of economics.  He buys it for selling later. He should find another similar person (greater fool) to liquidate. Because the price was already out of reach of of genuine buyer for consumption. So that genuine buyer ends up being tenant (renting from) of that 'smart' (self proclaimed) investor.

As tenant's income is limited and hard earned, rent can not be irrational. That's why rents do not increase at the same pace at which property prices do.

It has been rolling for long time now and cannot keep rolling forever. Just it's a matter of time...
Reasonable levels were breached loooong ago.

Now only there are 2 possibilities
First, obviously it should crash.
Second, it should hang on at these levels until earnings catch up; i.e., income levels of genuine buyers (not so called investors, who are in fact speculators) go up to the level at which they can afford it. Second option is good for the whole of economy.
First one will have ripple effect that will spill out to every other sector starting from banking. Remember the subprime crisis in US followed by great global recession.

Last point: any asset ultimately should have direct or indirect consumption backing. Homes are ultimately built for people to live in. There is a huge demand for affordable housing but in reality most of the people can't find one. For them 'Realty' has become mirage. 

How Right to Information Act Came in to Existence in India

Every time I heard of some groundbreaking truth uncovered using the tool "RTI Act", as much I admired the people who sought, got and publicized that information, so much I appreciated the power of RTI Act itself.

I also wondered how such a powerful tool was given to citizens of India? How come or law makers and executors were so generous about empowering the public against themselves?

I was not aware of any strong demand or movement of public (like what we see for Jan Lok Pal) before it was enacted. Today,  I did some online search to find that there was more than decade long fight to push & corner the Govt to bring such a law. 

Mazdoor Kisan Shakti Sangathan (MKSS), lead by Aruna Roy, was the pioneer to start and most instrumental in the RTI Movement.

Interestingly, before the national level RTI Act was enacted by the Parliament (Year 2005), several state level  RTI Acts were brought by Tamil Nadu, Rajashtan, Goa, Delhi and Karnataka, as early as year 2001

Rajasthan, where the actual RTI movement was started and was rigorously activie, was not the first state to bring it. Tamil Nadu was the first state to enact RTI Act (though not a powerful one), without any notable public movement within the Tamil Nadu state. Goa & Karnataka were the next states which brought RTI almost on their own without public movement. Later in few more states like Delhi and Maharashtra, RTI enactment followed the public movement by Parivarthan NGO (in Delhi, with mentoring & support by MKSS) (Parivrthan NGO <website not available> was founded by Aravind Kejriwal & Manish Sisodia) and Anna Hazare (in Mahrashtra).

It is notable that the enactments followed by the public movements were more powerful and practical ones.

Later more or less all RTI activists, movements and international institutions networked and came together to make the national level RTI Act 2005. "National Campaign for People's Right to Information" was the association of major RTI Movement Organizations.

Here are some more resources:

Commonwealth Human Rights Initiative (RTI India)

Wikipedia (RTI Act India)