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BSNL may scrap Rs 5,000 cr line order
Basu for lowering interest rates to tame inflation
Seven of top-10 cos add
Rs 31K cr in M-cap
Popular China company structure under threat
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Arrears of pension received cannot be split for 2008-09
Sharp dips could be used for purchases
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BSNL may scrap Rs 5,000 cr line order
New Delhi, September 18 “The 15 million GSM tender floated by state-run BSNL is likely to be scrapped as only two or three private vendors have shown interest in the e-tender process,” a Department of Telecommunications (DoT) official said. According to telecom market experts, the 15 million GSM line tender is estimated to be worth around Rs 5,000-6,000 crore. “One of the reasons for the low interest shown by the private parties could be that BSNL divided the whole country into six zones for this tender... (and interested parties) will bid for this in a segregate manner, rather than for pan-India,” the source said. However, when contacted, BSNL CMD R K Upadhyay said, “As of now, there is no such plan to scrap the tender... The process is evolving,” BSNL had floated this tender in July on an e-tendering reverse auction basis. A reverse auction is a type of auction in which the company that floats the tender fixes the upper limit of the contract and interested parties participate in a series of rounds in which they submit offers lower than the ceiling contract value and those of the previous round until a single party emerges as the lowest (L-1) bidder. This is not the first time that a BSNL tender for GSM lines would be cancelled, if it happens. Earlier, BSNL had cancelled a tender for 5.5 million GSM lines. It had cancelled a 93 million line tender worth Rs 35,000 crore prior to that, amid controversies over the lack of competition in the bidding process and complaints from various quarters that the capacity addition was too high for the company. The BSNL tender process was referred to a committee headed by Sam Pitroda for review after a number of controversies — ranging from Home Ministry objections to participation by Chinese equipment firms to legal battles with disqualified vendors — arose. Due to repeated scrapping of the tender, BSNL has been facing an acute shortage of new lines to meet demand. In 2009-10, the company reported a 7.4 per cent decline in total revenue to Rs 27,913.44 crore from Rs 30,169.42 crore. The PSU reported its first-ever loss of Rs 2,197.48 crore in the same fiscal.— PTI
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Basu for lowering interest rates to tame inflation
New Delhi, September 18 “... I believe that is something (reduction of interest rate) which ought to be considered. When you have high inflation, the central bank's standard response is to increase the interest rate and my view is that we have done it. It had some impact, but not at the level which we had expected,” Basu said . "So try something different, on which we are beginning to get evidence," he said. Basu's comments came within days of the Reserve Bank of India (RBI) raising key interest rates by 25 basis points, the 12th increase in the last 18 months, to contain inflation, which has remained stubbornly close to 10 per cent. "We are in a new world. Many countries are facing this problem. We have to try a different policy, because we don't want to damage India's growth story," Basu added.— PTI
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Seven of top-10 cos add Rs 31K cr in M-cap
State-run oil & gas explorer ONGC was the top gainer with its market value surging by Rs 10,993.8 crore during the week to Rs 2,35,019.04 crore, as on last Friday's trade on the BSE. During the week, shares of the company jumped nearly 5 per cent to close at Rs 274.70. Software exporters TCS and Infosys Technologies, together added Rs 9,609.77 crore to their combined market valuations. The M-cap of TCS stood at Rs 2,01,435.02 crore, while that of Infosys was at Rs 1,37,424.24 crore.— PTI
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Popular China company structure under threat
Hong Kong/Beijing,
September 18 Lawyers at four different firms in China and Hong Kong said they have seen an internal report, dated August 17, said to come from the China Securities Regulatory Commission (CSRC) which asks China's State Council, or cabinet, to take action against the structures known as Variable Interest Entities (VIEs). The CSRC did not respond to a Reuters request to confirm whether or not the report is genuine. But lawyers say they are taking it seriously and that if the government were to accept the CSRC's view it could jeopardise the way in which Chinese companies list overseas or receive foreign investment. In particular, any change could hurt China's booming private equity market, with relies heavily on VIE "If this structure is prohibited, you're going to see a shrinkage on a massive scale in terms of the number of potential foreign investors in China. It will send shockwaves through the financial industries sector," said one lawyer at a foreign law firm in China who has seen the report but asked not to be identified given the sensitive nature of the document.— Reuters
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Arrears of pension received cannot be split for 2008-09 Q I am a Punjab government pensioner. In June 2011, I received a big amount of arrears for 01.01.2006 to 31.05.2011 on the recommendation of the Fifth Punjab Pay Commission-Revision of pension of pre 01-01-2006 pensioners/family pensioners. Please advise whether these arrears can be split year-wise to which these pertain. If yes, I shall be grateful if you let me know the exemption limit (the maximum amount on which tax is not payable by a senior citizen) for the financial years 2005-06, 2006-07, 2007-08, 2008-09 & 2009-10. You have stated in your reply captioned I-T return (Tribune dated June 20) that the exemption limit for senior citizens for the assessment year 2011-12 is Rs 2.40 lakh. Please confirm. Has it not been raised to Rs 2.50 lakh? — SK Sharma A The arrears of pension received by you in this year for the period 01.01.2006 can not be split for the financial years 2005-06, 2006-07, 2007-08 & 2008-09 as the time limit for filing of revised return for these years has expired. The revision can take place for financial year 2009-10 i.e. assessment year 2010-11 as the return for such an assessment year can be revised up to March 31, 2012. It would be advisable to seek relief under Section 89 of the Income-tax Act, 1961 (The Act) in respect of the additional amount received during the year. The relief can be sought in the return for the assessment year 2012-13. (i) The exemption limit applicable to senior citizens, for assessment year 2011-12 is Rs 2.4 lakh. Higher limit Rs 2.5 lakh is applicable for assessment year 2012-13. Maximum Income Tax rebate
Q Please answer the following: a) You have advised on the question asked by Sh. Ramesh published in the Tribune dated 27.06.2011 that u/s 80C, the maximum income tax rebate is Rs 1.50 lakh. The amount 1.50 lakh is comprised of two parts, one lakh for the contribution of provident fund, gratuity fund etc. and amount of Rs 50,000 for insurance premium i.e. life, health, medical and tuition fees of children. Kindly advise from which financial year that Rs 50,000 has been enhanced. b) Also advise regarding infrastructure bond of Rs 20,000 whether the total rebate now is Rs 1.70 lakh i.e. one lakh for provident fund etc, Rs. 50,000/- for insurance and Rs. 20,000/- for infrastructure bond. — CP Aggarwal A Your queries are replied hereunder: a) The limit of Rs 1.50 lakh is contained in Direct Taxes Code, which is yet to be made effective. b) The limit for deduction under 80C of the Income-tax Act 1961 (The Act) remains at Rs 1 lakh. The allowable deduction is Rs 1.2 lakh, which includes Rs 20,000 towards the purchase of infrastructure bonds. Form to be filled
Q My income for 2010-11 (1) Pension. (2) Interest on FDR and (3) STCG (shares sale) is more than the threshold limit of a senior citizen. Kindly advise me ITR Form which should be used by me for filing my IT return? — K Singh A The applicable Form in your case would be ITR 2. |
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personal
finance Financial planning brings in fiscal discipline in one’s life, which is the key to success and helps in achieving your future goals, when they arrive. Financial planning, essentially, is a six-step process and is about looking at one’s finances with an analytical frame of mind.
The first step is that we must clearly know our financial goals, which normally include education our children, their marriage, buying a house, planning for our retirement, planning an around-the-world trip post retirement, etc. Thus, we must first make a list of all such goals.
The second step is to find out details like what is our current net worth/ current earning, how much are we spending on a monthly basis and what is the amount we are saving. Assumptions are crucial
Thus, in 2021, when he would be ready to go to a senior college for his higher studies, then to arrive at the amount of money that will be required at that time, we should keep in mind not only the college fee, but we have to also add inflation to this amount. Therefore, inflation plays a very important role in the financial planning process. We must factor in inflation while arriving at our future expenses. In the present scenario, inflation in our economy is high, at approximately 9 per cent. However, it would be difficult for financial planners to assume the rate of inflation as 9 per cent for the next 10-15 years, since it very high and it would be difficult to achieve the goals if such high inflation continues in the economy for such a long period. Therefore, in my opinion, inflation assumption will have to be brought down to 6%, or may be 6.5%, and the return assumption, ie, how much one will earn from Equity as an asset class or diversified equity funds will have to be again kept in the range of about 15-18%, assuming that our economy would grow at 8% and the corporate world normally grows at double the speed, at about 15-18%. Hence, these assumptions are important for financial planners to arrive at the amount which one needs to save today, to achieve our future goals. For instance, if your son’s education costs Rs 10 lakh today, it would probably cost, let's say, Rs 20 lakh after 10 years. Assuming Returns to be 15%, we must calculate the amount we need to save from today onwards on a per-month basis, to be ready to pay the fee comfortably . The saved money can be invested and put into various schemes. For example, you can put this money into Systematic Investment Plans (SIPs) of various mutual funds. What is your appetite
for risk?
On the other hand, there are others who are a little conservative in matters of investment and would not be comfortable investing high amounts in equity. Therefore, one of the important expectations from financial planners is to find out the risk profile of the prospective clients by asking some key relevant questions. Calculate montly savings needed to achieve goals
You might need to save more or cut down on your current lifestyle, etc in order to achieve your financial goals. For example, a young couple earning Rs 40,000 per month may be spending Rs 30,000 in maintaining a particular lifestyle by going for a movie every weekend, eating out thrice a week, etc, They usually end up saving Rs 10,000 per month only. However, after undergoing the financial planning process, and discussing their future aspirations with their financial planner, they are suggested to save Rs 15,000 per month, instead of Rs 10,000 only. Definitely, in order to do that, they would have to sacrifice on a few things which can be eating out, buying expensive clothes and accessories, etc. Earmark investments
for specific goals
So, for example, if your son has finished his studies and wants to experiment with some business which would require money, you should not break your PPF account to meet the needs, since your PPF amount is supposed to meet your retirement needs only, as earmarked, and not for any other experiments. Similarly, if you have four mutual fund Simple Investment Plans (SIPs) of Rs 5,000 each to meet the education needs of your children, you should not break/ stop those SIPs in between, even if there are market fluctuations. You must wait till the maturity of these SIPs, so that your children's education need is properly fulfilled. Similarly, you could also invest in, let’s say, two Unit Linked Insurance Plans (ULIPs) of some good life insurance companies and these may be earmarked to your daughter’s marriage. Therefore, if you earmark each of your investments to one or more goals in your life, the chances of your getting success in achieving those goals automatically become high. Views expressed are author’s own.
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No pre-payment CHARGE on Floating rate loans Harsh Roongta The Reserve Bank of India’s press release on September 6, regarding the ten action points finalised in the Banking Ombudsman Conference created a storm in the tea-cup with one of the action points mentioning “Banks must not recover pre-payment charges in floating rate loans”. There is considerable merit in this suggestion since this will reduce costs dramatically for consumers, if they wish to switch loan providers. Allowing easier and cheaper portability to consumers ensures that existing consumers get good service and the same rates as the new consumers. The fact that all lenders discriminate against existing borrowers is well-known and many RBI committees have already pointed this out (including the Damodaran Committee on Customer Service in Banks). Of course, bankers have been quick to shrug off the press release on action points as not being a regulation and hence not binding. Clearly, it will require much more than just a Minutes of the meeting kind of press release for this rule to be actually enforced on the ground. RBI has been seized of this issue and one of the steps in this direction has already been taken with the introduction of Base rates. However, in the increasing interest rate scenario, we have already seen how even Base rates have failed to protect existing borrowers. Hence, a practical and cheap portability option is a must for protecting the interests of the existing borrowers. Given the increasingly loud voices from the regulator on this score, it is possible that this may be addressed by a specific regulation. Assuming that such a regulation is implemented, it must be applied to all exisiting loans to have any meaningful impact. There have been many cases where banks demand and get a fee to shift to a lower ‘floating rate’ loan from an existing higher ‘floating rate’ loan. Given the hassles of shifting from one lender to another, quite a few borrowers are forced to agree to take the new offer from the existing lender even though it may not be as good as the offer made by the new lender. RBI should get an industry body like Indian Banks’ Association (IBA) to come up with a standardised loan transfer process within a reasonable time frame. This will ensure that there are no non-tariff barriers to loan portability. I hope that soon, we will soon get regulations to enable the existing 80 lakh home loan borrowers to get the same treatment as the new 10 lakh home loan borrowers added every year. The author is CEO Apnapaisa.com, a leading price & features comparison engine on personal finance products - loans, insurance and investments. Views expressed are his own.
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Sharp dips could be used for purchases
It was a wild and eventful week at the bourses with sharp intra-day moves on a daily basis. The week opened on an extremely weak note. As expected and by the end of the week we recovered what was lost and a tad more to close in positive territory. The BSE SENSEX gained a mere 66.86 points or 0.40% to close at 16,933.83 points. The NSE NIFTY gained 24.80 points or 0.49% to close at 5084.25 points. This is the third consecutive week, when the markets have risen but the rate of change has certainly slowed down. The eventful week saw inflation refusing to go down, IIP numbers for August showed a lot of disappointment, RBI increased CRR and Repo rates by 25 basis points and the selling shareholder, the Government of India decided to put the sale of shares of ONGC on hold. ONGC was to begin the share sale from Tuesday the September 20. Petrol prices were raised by a significant Rs 3.14 per litre with no change or even talk of rationalising diesel prices on Thursday midnight. In international news, the default of Greece continues to be a matter of concern and the recovery in global markets, however fragile is continuing. The broader indices like the BSEMIDCAP and BSESMALLCAP were losers and incurred losses of 0.70% and 1.25% respectively. The rupee continued to be under pressure and though there was some recovery on Friday, we still closed weak at Rs 47.27 to the US Dollar. On Friday, the BSE SENSEX made an intra-day high of 17,122.54 points but closed at 16933.83 points, a fall of 188.71 points. Besides this sharp fall, there were a number of occasions during the day when the index rose and fell by more than 100 points in a span of a few minutes. The markets fell for five consecutive weeks and have since risen for the next three consecutive weeks. It appears that from this week, we may see the continuation of the fall. Global events are likely to rule the way markets move in the near future and these movements look not only worrisome, but could cause sharp movements and increase volatility. For week beginning September 19, the BSESENSEX has support at 16,841, then at 16,608, then at 16,498, then at 16,378 points and finally at 16,068 points. It has resistance at 17,074, then at 17,246, then at 17,307, then at 17,358 and finally at 17,664 points. The NSENIFTY has support at 5,053 points, then at 4,978 points, then at 4,911, then at 4,806 and finally at 4,735 points. It has resistance at 5,129 points, then at 5,181 points, then at 5,204 points, then at 5,229 points and finally at 5,323 points. The week ahead will continue to be driven by global cues and with the US markets having gained for the last few days they are also due for a correction. Europe crisis seems never ending and there is no resolution to the Greece default issue. With such an uncertain scenario, one needs to be cautious but any sharp dips could be used to make selective purchases.
Arun Kejriwal is founder of KRIS, an investment advisory firm . Views expressed are his own
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UBS head not resigning over $2 bn fraud
Govt panel for zero duty on LNG Ricoh targets `250 crore revenue Starwood plans 100 hotels by 2015 India-China CEOs forum
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New Delhi, September 18
Chief Economic Advisor Kaushik Basu has pitched for a reduction in interest rates to maintain growth, saying the RBI’s tight monetary policy has had limited impact and the time has come to try something different.
Mumbai, September 18
Have you prepared a financial plan? Anil Chopra, Group CEO, Bajaj Capital, says planning brightens the chances of success in achieving your goals and is especially helpful in today’s high-inflation environment
Know your Goals
Find out your savings and expenses
To reach these pre-defined goals, as and when they will appear, we need to make some key assumptions, which is the third step, such as what will be the inflation in our economy at the point of time, when our goals might arrive. For eg, Let's say, your son's higher education is due 10 years from now, since he is just 6-years-old currently. 
Another integral part of financial planning, which is the fourth step of the process, is risk-profiling. Every individual has different perceived risks for the same investment, ie, there are some individuals who are open to taking high risks and are therefore willing to put higher amounts into equity. 
Once the goals and the risk profile is known, the fifth step is to calculate the monthly saving amount required to accomplish the goals , after which the financial plan or a Roadmap would be presented to the client. After submitting the plan, implementation becomes very important, since it requires your budget to be reallocated.
Another important noteworthy point, which would be the sixth and last step in the financial planning process is that all your investments must be clearly earmarked to each of your goals. For example, if you have a Public Provident Fund (PPF) account, you may earmark it your retirement, which means that you would not be using that amount for any other purpose except your retirement. 
New LIC chairman within 10 days