New Delhi, September 4
According to CII’s quarterly Business Outlook Survey, the Business Confidence Index (CII-BCI) for the second quarter of 2011-12 has declined by 8.9 points compared to a decline of 4.2 points in the previous quarter.

The 77th Business Outlook Survey was carried out over a month ending mid-August 2011.

“The CII Survey reveals the impact of the global economic downturn as well as domestic factors that are generating uncertainty about the economic outlook,” said Chandrajit Banerjee, Director General, CII. “However, expectations for the second quarter indicate a modest recovery,” he added.

A major concern that emerges in the current survey is that most firms do not plan to increase investment plans in the second quarter of 2011-12.

While most firms were planning to increase their spending on capacity expansion in the previous survey, the current survey reveals that a majority of firms are expecting no change in their spending.

Capacity utilization of a majority of firms was 75-100% in the first quarter and a marginal increase is expected in the second quarter.

The top two business concerns revealed in the survey were high interest rate followed by high raw material cost.

Global economic/political instability, inadequate skilled labour and infrastructural and institutional shortages tied for the third rank.

On a brighter note, despite a fall in the overall Business Confidence Index, most firms expect sales, production and new orders to increase in the second quarter of 2011-12 after having witnessed stagnation in the first quarter.

A majority of exporters are optimistic that volume of exports will increase in the second quarter of 2011-12 despite signs of global slowdown.

The CII survey, which is based on a large sample size of 250 companies, revealed that the majority (29.0%) of the respondents expect GDP growth rate to moderate to 7.5-8.0%, while 23.7%, expect it to be in the range of 8.0-8.5%.

Tehran, September 4
India has paid off all oil debts to Iran accumulated this year due to a sanctions-related problem, Iran's Central Bank Governor Mahmoud Bahmani told the official IRNA news agency on Sunday.

"Although all the $5 billion of India's oil debt has been cleared, because of selling oil again Iran will always be a creditor of that country," Bahmani said, adding the payment was received in cash and not in kind through a bartering system.

"So far, Iran has not had a bartering system with India for receiving oil debts but if it happens it would be for those products which are of a high quality and are needed by Iran," he said.

India, Asia's third-largest economy and Iran's second oil buyer after China, racked up the debt after the Reserve Bank of India scrapped a clearing house system last December — a move welcomed by the United States which is trying to isolate the Islamic Republic over its nuclear program. Indian companies are making the payments in euros via Turkish state-owned Halkbank, Indian officials have said.— Reuters

New Delhi, September 4
State-run Steel Authority of India (SAIL) today said it will appoint 1,000 new dealers in rural areas to increase the market penetration of its products, adding that it will offer incentives to these dealerships irrespective of the quantities sold.

"SAIL plans to appoint 1,000 rural dealers in taluka, blocks and panchayats under this scheme during the current financial year with the aim of increasing consumption of steel in rural India," the company said in a statement.

According to steel industry data, per capita steel consumption in rural India is estimated at only 9.78 kg, compared to around 140 kg in urban areas of the country. The steel major has decided to extend attractive financial terms and conditions and incentives in order to popularise its newly launched Rural Dealership Scheme.

"Firstly, dealers will not have to bear the burden of a monthly commitment for offtake of material from SAIL. This would encourage small retailers in the hinterland to reach SAIL's materials to remote locations," the company said.— PTI

New Delhi, September 4
The World Trade Organisations (WTO) Director-General Pascal Lamy, on a two-day visit to India starting on Monday, will seek the country’s help in bridging the gaps on Doha trade negotiations, ahead of a key ministerial meeting in Geneva in December.

The WTO chief is expected to meet Prime Minister Manmohan Singh.

Besides bilateral talks with Commerce and Industry Minister Anand Sharma, Lamy would hold consultations with different industry chambers, an official said.

The Doha round of negotiations, launched in 2001, is aimed at liberalising the global trade. However, wide differences persist among the developed and developing countries on the level of market opening and protection to their domestic constituents, like industry and farmers.— PTI

New Delhi, September 4
Leading Indian healthcare firms, including Fortis Healthcare and Apollo Hospitals, are eyeing up to 80 per cent increase in the number of foreign patient arrivals this financial year.

The top three healthcare chains, Fortis Healthcare, Apollo Hospitals and Max Healthcare that together had treated about nearly 90,000 foreign patients last year, are banking on their cost effective and specialised services in areas like cardiology, organ transplants and oncology to drive foreign patient inflows into the country.

"We expect a 70 to 80 per cent increase in the number of patients this fiscal on the back of segments, including oncology, cardiac, or thopaedics, organ transplants and neuro," a Fortis Healthcare spokesperson told PTI.

Fortis Healthcare, which has a network of 66 hospitals across the country, treated 4,700 foreign patients in 2010-11.

Out of the total foreign patients treated by Fortis in 2010-11, 32 per cent came from Africa, 28 per cent from the Middle-East, 18 per cent from SAARC region, 19 per cent from the US and Europe and 3 per cent from the CIS region.

The country's largest hospital group Apollo Hospitals treated more than 50,000 foreign patients last fiscal.

While the company did not spell out exactly the number of expected foreign patients, it said that therapeutic areas like cardiology, cancer treatment and organ transplants among others will drive its growth in medical tourism.

"These are the areas which will remain drivers in future as well," a company spokesperson said.

Last year, foreign patients from as many as 55 countries, including all SAARC countries, Middle East, CIS countries, Africa and US, UK and Canada came for treatment at Apollo.

Max Hospitals said it is also expecting a growth in the inflow of foreign patients but did not specify numbers. "At Max, we have treated more than 35,000 patients in the last two years. For the current calendar year it is at 9,000," Max Healthcare Division General Manager - International Sales and Hospitals Alok Khanna said.

The company had treated patients mainly from Afghanistan, Iraq, Bangladesh, Nepal, Pakistan, Oman, Qatar, Africa, Ethiopia, Tanzania, Congo, Zambia, Burundi, Kenya and UAE, he added.

According to a study by McKinsey and the CII, the medical tourism in India could become a $2-billion industry by 2012 from $350 million in 2006.

The key selling points of the medical tourism industry in India are its cost effectiveness and its combination with the attractions of tourism, according to the study.— PTI

Q I request you to kindly tell from which financial year, the new rules of Income-tax passed in Parliament in March, 2011 will be applicable. Under Section 80C how much savings are allowed for rebate and which saving schemes are admissible also for senior citizen. I have been told that a person having less than 5 lakhs income from salary/pension and other sources is not requested to fill in Income-tax return. This may kindly be guided in detail and from which financial year. — Satinder Vir Singh

A a) Normally amendments brought in by a Finance Act are prospective and applicable to financial year beginning next April. However, in some cases retrospective amendments are also brought in which are specifically stated in the Act. The amendments brought in by Finance Act 2011 are also mostly applicable for assessment year 2012-13 i.e. financial year 2011-12.

b) The deduction for savings is limited to Rs. 1,20,000 including Rs. 20,000 towards amount paid for the purchase of long term infrastructure bonds. The deduction of Rs. 20,000 is covered under section 80CCF of the Act. There are large number of saving schemes which are covered for the purposes of deduction of Rs 1,00,000 allowable under section 80C of the Act.

It is therefore not possible to enumerate all of those on account of paucity of space. However, a few important schemes covered are contribution to a Recognised and Public Provident Fund, contribution for Life Insurance Premium, Payment of fee for education of children etc.

c) The scheme for non-filing of return for personal earning salary income not exceeding Rs 5,00,000 has been notified recently. The requirements of such schemes are as under: -

(i) The assessee's income arises from the salary and by way of income from other sources in the shape of interest in savings bank not exceeding Rs. 10,000

(ii) The assessee:

a) has reported to his employer his Permanent Account Number (PAN);

b) has reported to his employer, the incomes mentioned in (c)(i) above and the employer has deducted the tax thereon;

c) has received a certificate of tax deduction in Form 16 from his employer which mentions the PAN, details of income and the tax deducted at source and deposited to the credit of the Central Government;

d) has discharged his total tax liability for the assessment year through tax deduction at source and its deposit by the employer to the Central Government;

e) has no claim of refund of taxes due to him for the income of the assessment year; and

How to invest in mutual funds

There are number of ways to invest in any scheme of Mutual Funds, which are:

n Direct investment

n Through Banks

n Through Brokers

n Through marketing intermediaries or agents

A Systematic Investment Plan (SIP) provides an opportunity to retail investors to invest in small amounts rather than putting in a lump sum amount. As such, it involves parking money in the equity market on a monthly basis so that holding costs can be averaged out. One can get the benefit from this strategy only if the investment horizon is between 3-5 years.

The market is volatile and before taking any investment decision, proper analysis is required. The golden rule is “When in doubt, dont’t buy, stay in cash as cash is king”. Patience and the ability to take informed and calculated risks is the demand of the market. One can build a portfolio thorugh proper Mutual Fund investment as the MF offers a comparatively lower risk profile compared to direct investment in equity.

What are mutual funds?

If we break the phrase 'mutual funds' and analyze the words, we realize that it refers to funds that are raised and invested mutually, i.e. on behalf of everyone participating in the scheme. If you and your friend both pool your money and invest it jointly, you have created your own mutual fund. People are not interested in the day-to-day management of the funds but are interested in the final outcome of the investment.

The week ended September 2 was a great week in many ways. The rain god appears to have been extremely kind and we seem to now have had a really decent monsoon almost in the entire country.

After five consecutive weekly losses on the BSE SENSEX and NSE NIFTY where we lost close to 2,874 points in the SENSEX in five weeks, we had a really strong and positive week. The week had two holidays on account of EID and Ganesh Chaturthi and the religious fervour and festivities associated with the same were helped with the mood in the market place turning positive.

Foreign Institutional Investors too chipped in with their big bit and against sales of over $2.2 billion so far in the month actually bought in the three day week roughly $0.5 billion and reduced the net sale to roughly $1.8 billion for the month.

The BSE SENSEX gained a staggering 973.03 points or 6.14% to close at 16,821.46 points while the NSE NIFTY gained a similar 292.20 points or 6.15% to close at 5,040 points.

This was the first gain after five weeks of losses and was most welcome. I believe that the worst maybe over, but the road to recovery is long and we will see many ups and downs in the next few months.

The short 3-day week was expected to see a recovery but the magnitude of recovery was unexpected. This rally could be described as a pullback, a cheater’s rally or a technical rebound but to say that this was a bottom looks a little out of place.

Everybody expecting a correction on Tuesday afternoon, which never came it was easy for the bulls to take charge. The issues affecting US and Europe continue affecting them and there is no change or resolve to address the issues.

In India, cost pressures, commodity prices and price increases coupled with rising interest rates are affecting the performance of companies across the board.

In such a scenario the mid-September meeting of RBI where probably the last of the rate hikes will happen is a key event and will be watched by the market place keenly.

One should brace for a volatile week and sharp two sided movements. The BSE SENSEX has support at 16,676 points, then at 16,374 points, then at 16,263 points, then at 16,068 points and finally at 15,765 points. It has resistance at 16,978 points, then at 17,184 points, then at 17,239 points, then at 17,359 points and finally at 17,665 points.

Unlike what we have seen in the last few weeks, the market will move in a more complex manner and the two sided moves will make even seasoned players unsure of the direction. The really good news will come post the harvest, around Diwali.

Arun Kejriwal is founder of KRIS, an investment advisory firm . Views expressed are his own

New Delhi, September 2
With interest rates rising continuously, investors who are risk averse and are looking for fixed returns may want to look at fixed deposits for investments as several banks have hiked deposit rates.

Harish Sabharwal, COO, Bajaj Capital says that with interest rates at their peak, it is a good time for investors who want to park their surplus money in debt with the benefit of double digit & safe returns, to invest in fixed deposit schemes.

State Bank of India has revised upwards the deposit Rates by 50 basis points in the 180 days to 240 days maturity, effective from August to 7 per cent.

Banks are offering close to 8 per cent for deposits of less than 1 year and more than 9 per cent for deposits of 1-2 years. Senior citizens get higher rates of 0.5 per cent in all the deposit slabs. The other option for fixed deposits is companies, but adequate due diligence should be exercised in terms for their ratings, reputation and safety.

Sabharwal says apart from bank deposits which are offering good returns, the fixed deposit schemes of various companies are also offering interest rates between 10.5 per cent to 12 per cent per annum. He says that company FDs have an edge by 0.5 per cent to 2 per cent interest over bank deposits.

On creating a debt portfolio, Sabharwal says that investors should ideally hold a diversified portfolio consisting of different fixed income securities like FDs, bonds, PPF, etc.

He says that in the case of NBFC & Housing Finance companies, one should look at rating of company as it gives a fair idea about company’s financial strength & its debt repaying capability.