With no interest, deposits with BDA rot

With no interest, deposits with BDA rot while stocks yield rich returns
New Indian Express

BANGALORE: It is a year since the Bangalore Development Authority (BDA) invited applications for allotment of 20,000 sites. In all, 2.32 lakh people responded and paid Rs. 938 crore in deposits.

The applicants have no clue as to when they will get either the site or their money back. That the BDA does not pay interest on their deposits is even more agonising to them.

This website's newspaper picked a few Nifty stocks as quoted on February 3 to estimate the profits an investor would have made from his investments in February last. There are some stocks that have reported mind-boggling returns.

Take for instance KCP Sugar. It has returned Rs. 24,025 on every Rs. 3,115 invested. That translates into a Rs. 7.71-lakh return on Rs. 1 lakh invested. On a much lesser scale, an investment of Rs. 1 lakh in companies like Nagarjuna Constructions has returned three times the money invested. The BDA has collected close to Rs. 1 lakh for a 50X80 site as deposit.

There are, however, stable scrips like SAIL, HDFC, ABB, Gujarat Ambuja, Tata Chemicals etc., that have earned reasonable returns. SAIL's stock, for instance, rose to Rs. 6,565 from Rs. 4,205 invested, while ABB quoted Rs. 1,057 on Rs. 685 invested.

The year 2004, without a doubt, belonged to investors with robust corporate profits keeping indices high. Even a modest bank rate would earn an interest of Rs. 5,250 on a deposit of Rs. 1 lakh. There are also a bulk of applicants who borrowed from banks to pay their deposits. The banks charge 14 percent interest on such loans. God save those who borrowed from private money lenders.

The BDA has collected Rs. 94,500 for a 50X80 ft site, Rs. 56,700 for a 60X40 ft site, Rs. 28,500 for a 30X40 ft site and Rs. 14,200 for a 20X30 ft site.