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		<img align="" alt="Grappling with demonetisation windfall" class="imgCont" height="464" src="http://bsmedia.business-standard.com/_media/bs/img/article/2016-11/23/full/1479920937-3713.jpg" style="border: 1px solid #DDD; margin-right: 10px; padding: 1px; float: left; z-index: 0;" title="Grappling with demonetisation windfall" width="620" />
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			Faced with a tight liquidity scenario in the wake of demonetisation and Real Estate (Regulation & Development) Act, 2016, or Rera, kicking in, property developers are looking to cut costs on all fronts to save cash and maintain bottom line. And, they are looking at cutting down on everything &mdash; from salaries and marketing expenses to the number of jobs in their companies.&nbsp;</div>
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			&ldquo;We are in the worst phase of the industry with demonetisation, Rera, and a general slowdown. We have to gear up for these tough times for the next six months to a year,&rdquo; said Vijay Wadhwa, chairman of Wadhwa Group, one of the biggest developers in Mumbai.&nbsp;</div>
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			The Wadhwa Group, according to him, is looking to slash excess staff by 10-15 per cent and rethink top salaries to save cash.&nbsp;</div>
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			&ldquo;People and the whole organisation have to be very efficient. Otherwise, we will not survive,&rdquo; Wadhwa added.&nbsp;</div>
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			Wadhwa said prominent developers in Mumbai were informally discussing ways to cut costs, save cash and how to brace for tough times.&nbsp;</div>
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			Another developer in Mumbai said they were looking to put 30 per cent of the salaries drawn by people who earn Rs 1 lakh and above in escrow accounts and release the same when things get better.&nbsp;</div>
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			&ldquo;We do not want to take their money. We just want to make our company stay afloat in tough times,&rdquo; said the chairman of a company, asking not to be identified.&nbsp;</div>
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			Sandeep Runwal, director at Runwal Group, said his company would look to rationalise all costs and run a more efficient operation, with much lower overheads. He said for the time being, the company would not look at any new land acquisitions.</div>
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			Rating firm Fitch Ratings recently said that residential property sales of most residential developers to come down by at least 20-30 per cent in 2017, because of the government&rsquo;s move to demonetise certain currency notes.&nbsp;</div>
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			&ldquo;The government&rsquo;s move in November 2016 to curtail undeclared wealth by demonetising certain currency notes is likely to take a toll on demand. Property and gold are popular instruments for investing undeclared income in India&rsquo;s large cash-based economy,&rdquo; it said.&nbsp;</div>
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			Fitch expects the credit profiles of most residential developers to weaken, as slower sales could mean cash collections will lag construction commitments.&nbsp;</div>
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			&ldquo;This would be particularly true for companies that have aggressively expanded their land banks in the past two years, using cash collections from previously sold properties,&rdquo; said Fitch.&nbsp;</div>
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			The recent Reserve Bank of India (RBI) move to keep rates unchanged also comes as a dampener for developers. They were expecting 25 to 50-basis point cut.&nbsp;</div>
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			&ldquo;It is a disappointment for all industries, including real estate. For developers to cut prices, their cost of funding should come down first,&rdquo; said Rajeev Talwar, chief executive officer at DLF, the country&rsquo;s largest developer.&nbsp;</div>
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			Talwar said RBI&rsquo;s decision (of not cutting rates) would accentuate the liquidity conditions of property developers barring a few such as DLF.&nbsp;</div>
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			&ldquo;Most of the small and medium sized firms have already asked for restructuring of loans,&rdquo; he added.&nbsp;</div>
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			Nitesh Shetty, chairman and managing director at Bengaluru-based Nitesh Estates, said one should reduce all costs when residential sales are slow.&nbsp;</div>
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They are looking at cutting down on everything - from salaries and marketing expenses to the number of jobs in their companies

Grappling with demonetisation windfall

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		<strong>Who is doing what&nbsp;</strong></div>
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		* Wadhwa Group is looking to slash excess staff by 10-15% and rethink top salaries&nbsp;</div>
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		* Another Mumbai developer plans to keep a percentage of those earning above Rs 1 lakh in an escrow account</div>
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		* Runwal Group is not buying new land</div>
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		* Nitesh Estates to reduce input costs by 10-15%</div>
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Layoffs, salary cuts: Realtors on cost-cutting spree to save cash

They are looking at cutting down on everything - from salaries and marketing expenses to the number of jobs in their companies

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